B.C. buys back disputed coal gas lease

Sign erected on Highway 37 in October marks 102nd anniversary of the 1910 Declaration of the Tahltan Tribe, affirming sovereign rights to more than 97,000 square kilometres of traditional territory in northwest British Columbia.

Tahltan Central Council

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The B.C. government has agreed to a $20 million compensation deal that will see Shell Canada give up a disputed coalbed gas tenure in the remote Klappan region of northwest B.C.

Shell's exploration of 4,000 square kilometres at the headwaters of the Skeena, Nass and Stikine Rivers has been opposed by the Tahltan Nation since the tenure was awarded by the province in 2004. The company drilled three exploration wells in the first year, which it now intends to decommission as it leaves the area.

The B.C. government has agreed to provide Shell $20 million in gas royalty credits to compensate for its investment in the Klappan region. That is to be put towards a water recycling project that Shell is building to supply hydraulic fracturing operations on its shale gas developments in the Peace River region of northeast B.C.

Coalbed gas extraction has additional hazards because of salt-contaminated water that often surfaces with natural gas when coal deposits are drilled. Hydraulic fracturing can be used in coalbed development, but it is more extensively used in drilling deeper shale formations to extract natural gas.

"The Klappan is one of the most sacred and important areas for our people," said Annita McPhee, president of the Tahltan Central Council. "It is a place of cultural, spiritual, historic and social importance. Our people do not want to see it developed, and we look forward to working with British Columbia on achieving that goal."

McPhee added that the Tahltan have received offers of support from local, provincial, national and international organizations in their opposition to the development.

Shell Canada president Lorraine Mitchelmore said the company's shale gas tenures in the northeastern B.C. offer "better commercial and geological prospects," and sustainable water use is important to that development.

Energy Minister Rich Coleman said shale deposits offer much greater gas volumes, in regions where roads and other infrastructure already exist.

Aboriginal Relations Minister Ida Chong said the government is looking forward to further "government-to-government" talks with the Tahltan over resource development in their entire traditional territory.

Doug Donaldson, NDP MLA for Stikine, said protests against coalbed gas drilling in the Klappan are similar to those directed against the Enbridge Northern Gateway oil pipeline proposal.

"People in the northwest understand the importance of resource industries, but they also understand that it's impossible to put a price tag on a clean environment," Donaldson said.