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Construction at the Fort McKay First Nation outdoor amphitheatre, which will seat 1,800 people at completion next year. (Kelly Cryderman/The Globe and Mail)
Construction at the Fort McKay First Nation outdoor amphitheatre, which will seat 1,800 people at completion next year. (Kelly Cryderman/The Globe and Mail)

The dispute the entire oil industry is watching Add to ...

Like most firms breaking ground on new oil sands operations today, Brion Energy will use steam-assisted gravity drainage (SAGD) technology, which sees bitumen extracted through steam injection and oil recovery at well sites, and doesn’t require the land to be dug up and disturbed the same way oil sands mining does. Brion has also committed to a number of environmental measures, including minimizing light pollution, and helping to reclaim caribou habitat outside of its lease zone.

In its decision report released in August, the Alberta Energy Regulator agreed that there could be a negative impact on wildlife, and traditional land uses in the area, but said given that cabins on Moose Lake are more than eight kilometres away from Dover’s industrial activities, community members are unlikely to hear, smell or see project-related activities. The regulator came down in favour of the project.

“The economic benefits are so significant that despite the social and environmental impacts described by the parties, the positive aspects of the project outweigh the negative impacts,” the energy regulator said in its decision.

Brion Energy said it’s continuing to work to find a resolution that’s acceptable to both parties.

“We have been in extensive discussions with Fort McKay to more fully understand their concerns and want to develop a long-term relationship based on mutual respect,” Brion spokeswoman Kristi Baron said in an e-mail.

The regulatory hearing and legal manoeuvring around the project has hurt the stock price of Athabasca Oil, which owns 40 per cent of the Dover project. PetroChina owns 60 per cent of Dover and is expected to take full control through an option arrangement once the project clears regulatory hurdles.

“The Alberta Court of Appeal’s decision granting the Fort McKay First Nation (FMFN) the right to challenge the AER on constitutional grounds is significantly negative for Athabasca and potentially sets a concerning precedent for the industry, increasing the risk of project approvals or delays in the regulatory process,” wrote RBC Dominion Securities Inc. analyst Mark Friesen when the court made its decision in October to hear the case.



Many band members struggle with the fact that over the decades, the people of Fort McKay have gone from berry picking, hunting and trapping to being boxed in by oil sands projects – and enjoying great financial rewards while being a part of the industrial apparatus.

“We are what we are,” Chief Boucher says. “Of course you’re going to be conflicted.”

But the wealth in the community is a significant point of pride, and Fort McKay has progressed quickly in recent decades.

Former Chief Dorothy McDonald-Hyde – one of the first women to lead an Alberta reserve – had the foresight to establish the Fort McKay Group of Companies in 1986. The 100-per-cent First Nation-owned group of companies is now involved in construction, road maintenance, fuel supply and hauling, industrial parks, and in conjunction with Syncrude Canada Ltd., operates the Beaver Creek Wood Bison Ranch, where buffalo have roamed on reclaimed oil sands land for 20 years.

The First Nation has backed its housing and community-building boom with funds from the Group of Companies, with revenue Chief Boucher pegs at around $120-million last year, and joint ventures. The band also receives money from long-term agreements – up for negotiation every five years – with nearby oil sands operators for their presence in traditional territory, although those funds have to be directed toward community facilities. Transfers from the Department of Aboriginal Affairs now make up less than 4 per cent of the Fort McKay’s total budget, according to reserve officials.

Fort McKay is now in a similar position to the oil sands companies themselves – facing a labour shortage. To help with that dilemma, the First Nation has flown in dozens of construction workers from the Blood tribe – a large, southern Alberta band with high unemployment – and plans to make similar arrangements with other aboriginal communities.

The Fort McKay First Nation already has a close relationship with its Métis neighbours. Just steps outside the First Nation reserve boundaries sit the Fort McKay Métis Community office, the centre of the community for 83 Métis members. The two communities are closely linked with both familial relationships and finances.

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