B.C. First Nation calls for natural-gas royalties amid frustration over fracking

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Taking a page from Premier Christy Clark's playbook, a First Nations leader in the heart of British Columbia's shale-gas fields is calling for a fair share of the benefits from natural gas as compensation for the environmental impact that development brings.

Conflict over indigenous rights and fracking has put the spotlight on the Elsipogtog First Nation in New Brunswick in recent weeks, and leaders of the Fort Nelson First Nation in B.C. say frustration is also brewing over fast-paced development in their territory.

The band wants a portion of shale gas royalties – echoing a condition Ms. Clark set for allowing new pipelines to take Alberta oil to the coast. The Premier has insisted that B.C. should get a greater share of the benefits because it carries most of the environmental risk.

Chief Sharlene Gale and lands manager Lana Lowe of the Fort Nelson First Nation, in an article submitted to The Globe and Mail, say their remote community in northeastern B.C. is, like Elsipogtog, paying "too high a price" for shale gas extraction that is already under way.

Ms. Gale said in an interview that her band is seeking a balanced, "solutions-based" approach between environmental protection and job creation. "We want world-class partnerships to go with those world-class resources," she said.

Ms. Lowe said the challenge is ensuring that the band is not forgotten in the rush to develop a liquefied natural gas industry. "It is frustrating for our community to see the huge economic benefit agreements going down to the pipelines and LNG facilities on the coast," Ms. Lowe said, "and for us to just be sitting here with all of the environmental impacts and not have any economic benefits."

The band's population is small, but its territory is about the size of New Brunswick and contains three of B.C.'s four shale-gas reserves – the Horn River, Liard and Cordova Basins. Those basins hold the key to B.C.'s LNG ambitions.

Ms. Gale expects a sixfold increase in exploration, drilling and fracking if even only a handful of the proposed LNG plants are built on B.C.'s west coast.

"To have peace, there must be sharing. This became clear to us as we watched the events unfold in Elsipogtog," the two women wrote.

The aboriginal community of 800 is seeking a share of the upstream royalties as compensation if environmental impact is unavoidable, and a role in helping mitigate damage.

Current environmental effects include loss of groundwater, air pollution from three gas plants and damage from nearly 80,000 kilometres of seismic cut lines – forest clearings that allow industry to read subsurface structures.

Rich Coleman, the B.C. minister responsible for natural-gas development, said his government has worked out economic benefit agreements around natural-gas development with a number of First Nations in the region. "First Nations have always been treated pretty well," he said in an interview.

But he suggested it is premature to start carving up potential benefits of LNG.

"They are all going to benefit one way or the other if this goes forward," he said. "But the reality is, it's fine to talk about it, but until we get final investment decisions, there is no flow of dollars taking place."

Geoff Morrison, a spokesman for the Canadian Association of Petroleum Producers, said consultation over royalty-sharing would have to be handled between First Nations and the Crown. But he said industry has a responsibility as well. "Individual companies need to have a relationship with First Nations, and they have to work to ensure there is an opportunity for economic benefits. That's part of the ongoing effort to ensure we are working co-operatively."

The Fort Nelson First Nation is part of the Treaty 8 settlement – one of the small number of aboriginal communities in B.C. to reach a treaty, which was signed in 1899. The Treaty 8 bands have oil and gas consultation agreements with the province, but that process does not provide a broad assessment of the impact of shale gas development, Ms. Lowe said.

Ms. Lowe noted just one of the seismic cut lines in the Fort Nelson territory is as long as a pipeline from Alberta to the coast, and the public knows little about the resulting loss of forest and wildlife habitat. Most clearings are about three metres wide, and she said they make it easier for wolves to hunt boreal caribou, a species at risk. "We've seen the wolf population explode," she said. "It creates an imbalance between predator and prey."