Woodland Cree First Nation (WCFN) has provided notice to the Alberta Energy Regulator (AER) that Obsidian Energy Ltd.’s planned expansion of wells on their territory cannot proceed.
WFCN became concerned about Obsidian’s oil development plans in its territory after the AER found that improper disposal of industrial waste had caused a serious earthquake, the First Nation said in a statement Wednesday.
The AER in March 2023 issued an environmental protection order against Obsidian after the Alberta Geological Survey found that Obsidian’s disposal operation induced a series of seismic events in the Peace River region. The disposal operation included a well authorized for the disposal of water via injection into the Leduc Formation, the regulator said in an earlier news release, adding that the unique geological features of the area also contributed to the seismic events.
“While there is no evidence of damages or injuries from these events, this Order and subsequent investigation reflects our commitment to Albertans to ensure safe, efficient, orderly, and environmentally responsible development. The Order is intended to prevent future events and protect Albertans”, the AER said.
WFCN Chief Isaac Laboucan-Avirom said, “CEO Stephen Loukas and Obsidian have not met the basic legal requirements necessary to proceed with development on our territory. They refuse to address any of our environmental, health or safety concerns”.
“This is some of the poorest behavior from a resource company I have ever seen”, he continued.
"The Supreme Court of Canada has been extremely clear. If a company wants to develop resources on Indigenous land, it has a duty to consult and a duty to address the impacts upon Indigenous communities. Our rights under Section 35 of the constitution and under Treaty 8 are not ambiguous", Laboucan-Avirom noted.
In an earlier statement this week, Laboucam-Avirom said that Obsidian “has refused to meaningfully meet or work with Woodland Cree First Nation to address our concerns”.
"We are one of the most industry-friendly Nations in Canada. We support responsible, respectful, and collaborative production of oil and gas, and want to see this resource used to create prosperity for all Albertans and all Treaty peoples. However, disrespect by companies like Obsidian puts the entire sector at risk", Laboucan-Avirom concluded.
Obsidian has denied the allegations of the WFCN leadership, calling the statements “misleading”.
In a separate statement, Obsidian said negotiations regarding a new economic relationship agreement started in the second quarter of last year, but the WFCN cancelled a November 2023 meeting between the parties at the last minute. According to the company, WFCN postponed the meeting until early 2024, but the First Nation had not rescheduled it yet.
Obsidian said it complied and continues to comply with the AER’s environmental protection order regarding a produced water disposal well by establishing seismic monitoring and accelerometers at its operations near Peace River, although it “continues to disagree with the conclusions of the order”. The company noted that the AER on February 7 scheduled a hearing to begin on November 27 to review the order.
“We have unfortunately reached a negotiating impasse with WCFN’s senior leadership”, Obsidian President and CEO Stephen Loukas said in the statement. “Obsidian Energy has informed WCFN’s senior leadership that we cannot accept their unrealistic terms that amount to a monopolistic relationship as our sole provider of certain services and as a collector of commissions for incremental services already provided to us by other companies. In addition to limiting our ability to operate independently in the area, their proposal is not beneficial to our stakeholders, including our shareholders, local communities and other Indigenous groups”.
“Obsidian Energy has had long-standing positive relationships with multiple Indigenous groups, including the WCFN”, Loukas continued. “While WCFN senior leadership rejected our most recently proposed economic relationship agreement, we are open to meeting with WCFN senior leadership to further discuss the potential for an agreement. Regardless, Obsidian Energy has the ability to pursue existing regulatory processes to obtain the required permits and licenses to execute on our three-year growth plan. Additionally, we have the flexibility to accelerate other Peace River locations within our extensive portfolio to achieve our growth objectives.”
Obsidian said it “encourages the WCFN senior leadership to resume negotiations towards a mutually beneficial economic relationship agreement that builds on a revenue stream for WCFN-owned businesses”.
According to Obsidian’s website, Peace River is a “high-quality stable, cold-flow heavy oil Bluesky resource with Clearwater upside within the heart of the Peace River Oilsands region”. The company has full ownership in a large, contiguous section area of land at Peace River, “providing substantial opportunity for future development with supportive commodity prices and recent well results”. As of the third quarter of 2023, production at the core area was measured at 5,920 barrels of oil equivalent per day.
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