A Northern Alberta First Nation is planning to develop an oil sands project after sitting on a lease for two decades, counting on a continued global appetite for crude and improved market conditions to bolster the proposal.
Fort McKay First Nation has been waiting for the right time to develop the land about 20 kilometres north of the community, and that time is now, Chief Mel Grandjamb told The Globe and Mail.
He said he’s “very confident” the project will go ahead, even at a time of energy sector turmoil with flattened demand for crude, some investors pulling out of the oil sands and the world eyeing greener energy solutions.
Mr. Grandjamb said the global pivot toward renewables means the First Nation must take advantage of the lease while it can. Plus, he doesn’t see demand for oil disappearing any time soon.
“There’s a lot of talk about doing away with the oil sands, but I believe in terms of the world perspective, we’re not ready yet,” he said. “Fort McKay has always been an active player [in the oil sector], and adding our products in the market will just reinforce the Canadian economy.”
In the Alberta oil sands, parcels of land are leased by energy companies to explore for and develop crude production facilities.
Developing Fort McKay’s oil sands project has been floated for years. The idea has undergone numerous studies, but the First Nation this week went one step further, creating a new role to hasten the project along.
Alvaro Pinto was installed as Fort McKay’s chief executive of oil sands development and sustainability. He will develop the next steps for a project that Mr. Grandjamb says could be a boon for the community and help build much-needed infrastructure.
Fort McKay, located at the heart of the oil sands region about 60 kilometres north of Fort McMurray, is pragmatic about resource development.
The First Nation is surrounded by eight mines and three in-situ operations, and the vast majority of its income is derived from its own business activities, including a dozen companies that service the oil industry. Those companies employed more than 1,400 people and generated $500-million in revenue in 2018.
Friendly as it is toward the oil sands industry, Fort McKay also advocates for operations that are as sustainable as possible.
That’s why it lodged a complaint with the Alberta Energy Regulator when the industry watchdog suspended a swath of environmental monitoring requirements citing the COVID-19 pandemic. It’s also why Fort McKay is in negotiations with the province to finalize a land-preservation plan for the area around Moose Lake, the last relatively undisturbed wilderness in the territory where community members can practise their treaty rights including hunting and harvesting traditional food and medicines.
Mr. Grandjamb said the principles in the Moose Lake plan – namely, higher environmental standards – will apply to any new oil sands development run by the First Nation.
Dr. Pinto didn’t have specifics about how much oil the project could produce, but told The Globe he believes Fort McKay could be a leader in resource development and demonstrate it “can be done in a better way than it’s being done today.”
That means designing more energy-efficient buildings, he said, and using equipment and technology that minimize emissions and environmental effects.
“In every component of environmental performance – land, air, water, wildlife – we would look for opportunities to do things differently and take it to the next level, from the very beginning of the design, through construction, through operations and then to close out of the project until full reclamation,” he said.
“All of those opportunities are out there.”
Over the next few months, Dr. Pinto will go through the previous lease studies and figure out whether more assessments are necessary. He said he hopes to have that information to the chief and council by the end of the year, along with recommendations for the project’s next steps.
The question of whether to go ahead with the development will then be put to the Fort McKay community in a referendum, he said.
Fort McKay’s chief and council also appointed Chris Johnson as the administration’s new CEO this week. He has been tasked with creating a growth and diversification strategy for the First Nation’s business development arm in his first 100 days.
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