‘This will probably be not solely a monetary funding, but in addition 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 advised reporters the corporate wasn’t achieved constructing main oilsands initiatives in Alberta.
Quite a bit has modified since then, together with the collapse and restoration in oil costs, rising local weather considerations, prognostications of peak demand and the upcoming 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 improvement on our reserve,” Powder stated Thursday in an interview.
And it inked the take care of Suncor.
“Fort McKay First Nation desires to proceed rising, identical to some other First Nation or different communities proper throughout Canada,” he stated Thursday.
“This will probably be not solely a monetary funding, but in addition a return for our Nation . . . This is a chance for us to handle prosperity, versus managing poverty.”
The settlement is a preliminary step that might discover a potential improvement 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 of for doable joint improvement 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 scale and high quality of the recoverable bitumen.
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Suncor government vice-president of oilsands Peter Zebedee stated 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 stated the corporate continues to be within the early levels of assessing the useful resource and accomplished its first drilling season, with extra work arising subsequent 12 months. That can present crucial technical info to the companions by the tip of 2025.
“It’s actually too early to say what the business alternatives are,” Zebedee stated.
“However given the proximity of this lease to each the Syncrude Aurora operations, in addition to our Fort Hills property, there are some synergies we’d be seeking to extract which are promising from an financial standpoint.”
Powder famous Nation members held a referendum on using the land as a part of its treaty land entitlement settlement in 2003, they usually supported it being earmarked for oilsands improvement.
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He stated the settlement is a strategic partnership with Suncor, one of many nation’s largest oilsands producers.
“Fort McKay wouldn’t be capable to do that independently as a result of we don’t have the assets, nor the expertise. And so we’re using and capitalizing on that relationship we’ve 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 are energetic within the vitality business.
Nonetheless, growing an oilsands challenge would give the Nation direct management over the sector’s improvement and environmental requirements.
“It will leverage the alternatives to really be within the driver’s place,” Powder stated.
“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, stated the Fort McKay lease has been mentioned as a possible improvement courting again greater than a decade.
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“I’m glad to see that is transferring forward,” he stated.
“It will give them a way more detailed stage of management over their very own mine.”
It received’t be easy, nevertheless.
Other than the massive upfront capital prices to develop a mine and questions on future oil demand within the coming years, the political hurdles seem huge.
The ill-fated Frontier oilsands mining challenge was pitched by Vancouver-based Teck Sources and permitted by a joint federal-provincial assessment panel.
After spending greater than $1 billion advancing the challenge, Teck gave up on getting federal approval in 2020, lower than one week earlier than the Trudeau authorities was anticipated to make a ultimate determination.
The $20.6-billion challenge had signed assist agreements with all 14 Indigenous teams within the space.
Don Lindsay, Teck’s CEO on the time, stated it had turn out to be clear there was no path ahead for the challenge.
Advancing a brand new oilsands mine in Canada at present could be a “vital uphill battle,” given federal coverage, stated oilsands professional Ben Brunnen, a associate 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 stated.
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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 Growth Undertaking, famous the federal authorities just lately amended the 2007 Fort McKay First Nations oilsands rules.
The challenge, if permitted, may start working by round 2036.
Premier Danielle Smith stated the settlement and potential for a brand new oilsands challenge is one which the provincial authorities helps, noting it will 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 advised 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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