Turns out the Spatsizi will be wild for a little longer
Klappan region permanently off-limits to gas exploration, B.C. announces
BY SCOTT SIMPSON, VANCOUVER SUNDECEMBER 18, 2012
Photograph by: Brian Huntington, Vancouver Sun
It was a day to celebrate, to forget the bitter confrontations and to look to the future Tuesday as Shell Canada announced it is relinquishing its gas tenures in the Klappan region of northwestern British Columbia and the B.C. government declared the Klappan permanently off-limits to gas development.
"Today is a huge milestone," said Anita McPhee, president of the Tahltan Central Council, which governs the Tahltan First Nation. "I am just beyond words about how deeply moved I am about Shell giving up its tenures in the Klappan."
Tuesday's joint announcement is the culmination of "years and years of resistance by the Tahltan people and our allies," McPhee said, a reference to blockades by the First Nation and to the environmental groups who had brought international pressure to bear on the Klappan. The 4,000-square-kilometre region southeast of Telegraph Creek is also known as the Sacred Headwaters because it is the source of three major rivers of the northwest — the Skeena, Nass and Stikine.
The Klappan is coal-rich and Shell Canada had been exploring opportunities to develop coalbed methane there since 2004. Activity was halted, first by a blockade of Tahltan elders and then by an exploration moratorium imposed by the province in 2008. That moratorium was to expire Tuesday.
The Tahltan consider the Klappan to be Earth's birthplace. However, it is also one of the province's richest coal deposits, containing an estimated eight trillion cubic feet of methane.
The government ended the prospect of natural gas development in the region as part of a tripartite agreement with the Tahltan and Shell. It acknowledged that the Klappan has been identified by the Tahltan as having significant cultural, spiritual and social values, and also includes the vital salmon-bearing Skeena, Nass and Stikine rivers.
Shell Canada president Lorraine Mitchelmore said the company will be focusing its B.C. development strategy in the province's northeast, where the company has gas reserves and access to the existing pipeline infrastructure.
"I am very pleased with the decision we have made today," she said. "We listened and we evaluated the prospectivity of Klappan in our portfolio. It's all a part of how we made this decision to exit for the good of all.
"It also shows a shift in our portfolio — Klappan being a part of it — but shifting to northeastern B.C."
In exchange for giving up its gas tenures, the government has reached a second deal with Shell where the energy company is to receive $20 million in royalty credits that it intends to use to develop a water recycling plant in its Gundy gas tenure near Fort St. John.
Energy, Mines and Natural Gas Minister Rich Coleman said both the Tahltan Central Council and Shell had worked to reach the best solution.
Shell could have pushed to maintain its tenure, he said, but recognized its focus was the province's northeast.
"Shell said 'Let's talk' and the First Nations were happy to have us find a solution and not have drilling permits go ahead in that area," he said. "Together, we have put agreements in place that respect the interests of all three major parties."
The issue in the Klappan involved environmental impacts of the extraction of coalbed methane. Coalbed methane extraction does not necessarily involve fracking. However, it involves the removal of large volumes of briny and potentially toxic water from underground coal deposits before the gas can flow, and opponents — including municipalities in the region — were concerned that the discarded waste water would eventually contaminate salmon-bearing streams and drinking water supplies.
The geographic remoteness of the region and the absence of developed infrastructure made Shell's decision to leave easier. Further, unlike Shell's northeastern B.C. tenures, the Klappan coalbed methane is what is known as dry gas — it contains no liquids that have value in making plastics.
Shell has invested about $30 million in the Klappan, having developed three wells and a drilling platform for a fourth well. The company intends to remove the four structures and restore the sites.
At ForestEthics Advocacy, one of the environmental groups that spearheaded the international campaign over the Sacred Headwaters, campaigner Karen Tam Woo said Tuesday was a day to celebrate.
"Days like today are few and far between," she said. "It's a big deal when small communities can stand up to one of the biggest corporations in the world and win.
"For the province, this announcement is quite significant coming out of the Clark government, which has been quite focused on developing natural gas."
McPhee described Tuesday's announcement as only the start of what the Tahltan hope will be a broader ban on mining the coal deposits of the Klappan. She said the Tahltan are already engaged with the province over the future of coal mining. Fortune Minerals, an Ontario mining company, and Korean steelmaker POSCO hold 16,000 hectares of coal exploration licences though a joint venture company, Arctos Anthracite (Fortune owns 80 per cent, POSCO 20 per cent).
Fortune president Robin Goad said in a Thursday news release that the project is still on.
"Fortune will continue working toward development of the Arctos project and will continue consultation with local communities and aboriginal groups to address concerns related to our project," Goad said.
Coleman said he is not prepared to prejudge the Fortune Minerals project.
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