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‘This shall be not solely a monetary funding, but additionally a return for our Nation . . . This is a chance for us to handle prosperity, versus managing poverty’
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Greater than 5 years in the past, after then-Suncor Vitality CEO Steve Williams opened the corporate’s long-awaited $17-billion Fort Hills mine, he instructed reporters the corporate wasn’t carried out constructing main oilsands tasks in Alberta.
Loads has modified since then, together with the collapse and restoration in oil costs, rising local weather issues, prognostications of peak demand and the approaching completion of the Trans Mountain enlargement.
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Throughout that point, not a single greenfield oilsands mine has moved ahead.
However Fort McKay First Nation Chief Raymond Powder hopes which may change.
The First Nation has signed a memorandum of understanding to look at “a potential oilsands mine growth on our reserve,” Powder mentioned Thursday in an interview.
And it inked the cope with Suncor.
“Fort McKay First Nation needs to proceed rising, identical to every other First Nation or different communities proper throughout Canada,” he mentioned Thursday.
“This shall be not solely a monetary funding, but additionally a return for our Nation . . . This is a chance for us to handle prosperity, versus managing poverty.”
The settlement is a preliminary step that will discover a potential growth on an oilsands lease about 20 kilometres northeast of Fort McKay.
The property is smack dab in the midst of a number of oilsands developments within the neighborhood. It was thought-about for potential joint growth by Shell Canada in 2006, though that enterprise didn’t proceed.
As a part of the brand new settlement, Suncor will conduct early stage technical and feasibility assessments, together with a drilling program, to look at the dimensions and high quality of the recoverable bitumen.
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Suncor govt vice-president of oilsands Peter Zebedee mentioned the settlement may probably present the corporate’s present operations — together with the close by Fort Hills mine, together with Syncrude’s Aurora operations — with bitumen provide choices previous 2040.
(Suncor owns 58 per cent of Syncrude and is the operator of the three way partnership.)
Zebedee mentioned the corporate remains to be within the early levels of assessing the useful resource and accomplished its first drilling season, with extra work developing subsequent yr. That can present mandatory technical data to the companions by the top of 2025.
“It’s actually too early to say what the business alternatives are,” Zebedee mentioned.
“However given the proximity of this lease to each the Syncrude Aurora operations, in addition to our Fort Hills belongings, there are some synergies we’d be trying to extract which can be promising from an financial standpoint.”
Powder famous Nation members held a referendum on the usage of the land as a part of its treaty land entitlement settlement in 2003, and so they supported it being earmarked for oilsands growth.
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He mentioned the settlement is a strategic partnership with Suncor, one of many nation’s largest oilsands producers.
“Fort McKay wouldn’t have the ability to do that independently as a result of we don’t have the sources, nor the expertise. And so we’re using and capitalizing on that relationship we’ve got with Suncor,” he added.
In 2017, Fort McKay and the Mikisew Cree First Nation independently financed $545 million to purchase a 49 per cent stake in Suncor’s oilsands storage amenities.
Fort McKay, which has 900 band members, has constructed up a number of profitable firms which can be energetic within the vitality business.
Nonetheless, growing an oilsands venture would give the Nation direct management over the sector’s growth and environmental requirements.
“It might leverage the alternatives to really be within the driver’s place,” Powder mentioned.
“We are able to have that authority and that sovereignty, asserting our positions with respect to stewardship of the land and the water and the air.”
Greg Stringham, former vice-president of oilsands on the Canadian Affiliation of Petroleum Producers, mentioned the Fort McKay lease has been mentioned as a possible growth courting again greater than a decade.
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“I’m glad to see that is shifting forward,” he mentioned.
“It might give them a way more detailed degree of management over their very own mine.”
It gained’t be easy, nonetheless.
Apart from the large upfront capital prices to develop a mine and questions on future oil demand within the coming years, the political hurdles seem monumental.
The ill-fated Frontier oilsands mining venture was pitched by Vancouver-based Teck Sources and accepted by a joint federal-provincial evaluation panel.
After spending greater than $1 billion advancing the venture, Teck gave up on getting federal approval in 2020, lower than one week earlier than the Trudeau authorities was anticipated to make a remaining determination.
The $20.6-billion venture had signed assist agreements with all 14 Indigenous teams within the space.
Don Lindsay, Teck’s CEO on the time, mentioned it had turn into clear there was no path ahead for the venture.
Advancing a brand new oilsands mine in Canada at this time can be a “important uphill battle,” given federal coverage, mentioned oilsands knowledgeable Ben Brunnen, a companion with Garrison Technique.
“When Frontier was set to be finalized, it had the most effective emissions profile and an exceptionally robust First Nations relationship,” he mentioned.
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“If Frontier can’t advance, what can? That basically is the query right here.”
Alvaro Pinto, CEO of the Fort McKay Oilsands Improvement Challenge, famous the federal authorities lately amended the 2007 Fort McKay First Nations oilsands laws.
The venture, if accepted, may start working by round 2036.
Premier Danielle Smith mentioned the settlement and potential for a brand new oilsands venture is one which the provincial authorities helps, noting it could generate further revenues for the Fort McKay First Nation.
“To see a proposal the place a band goes to be in on the bottom flooring of manufacturing, it simply warms my coronary heart,” Smith instructed reporters Thursday.
“I might hope that the federal authorities wouldn’t stand in the best way of the aspiration of a First Nation to develop their very own supply income . . . I do hope we do see extra of it.”
Chris Varcoe is a Calgary Herald columnist.
cvarcoe@postmedia.com
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