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Canadian Supreme Court Ruling Throws Major Pipeline into Doubt

By Nick Cunningham | Mon, 30 June 2014 22:12 | 0

Business for oil companies operating in Canada just got more complicated because of a Supreme Court ruling that significantly expands the ability of a native tribe’s ability to potentially veto proposed land use plans.

The June 26 ruling represents a major victory for First Nations tribes, in that it gives them much more leverage in decisions over how certain territory can be used. But it could also jeopardize a major oil pipeline to transport oil from Alberta to the Pacific Coast

The ruling came down in favor of the First Nation tribe of Tsilhqot'in in their fight against a logging company that began in 1983, when the government of British Columbia approved a logging license in territory where the Tsilhqot'in traditionally hunt and fish.

The tribe insisted that they had title over the land, but the government and lower courts disagreed. Now the Supreme Court has settled the case in favor of the nomadic tribe, granting it title over some 656 square miles of territory, including land that lies outside of traditional reservations.

The court stated that the Tsilhqot'in had the right to determine “the uses to which the land is put and to enjoy its economic fruits.”

That power could prove to be a major obstacle for industrial companies seeking to build major infrastructure projects like roads, bridges, power plants, and pipelines.

Oil companies are already required to consult with native tribes during the pipeline construction process. This ruling could require consent from native peoples. Lacking consent, major construction projects could potentially be blocked. Overruling First Nations after they have rejected a plan can only happen if the government proves it is justified under the constitution.

The Tsilhqot'in celebrated the decision, but the effects could reverberate much wider than their immediate territory.  

Just one example is the hotly contested Northern Gateway pipeline, which could face new hurdles as a result of the Supreme Court’s ruling. Enbridge, the pipeline’s owner, says that it will carry 525,000 barrels of bitumen oil from the Alberta oil sands to a port in British Columbia when completed. From there, it will be exported to China.

Related Article: Canada’s Indigenous First Nations Threaten $600 Billion in Energy Deals

The Northern Gateway pipeline has gained prominence as a critical project for oil sands producers due to the huge question mark surrounding the Keystone XL pipeline, which has been in limbo for the past five years. The conservative government of Canadian Prime Minister Stephen Harper approved Northern Gateway on June 17. (Harper is a major ally of oil sands producers, so the move was generally expected.)

But the pipeline’s proposed route crosses at least four territories claimed by First Nations tribes. The court’s ruling significantly changes Enbridge’s ability to move forward unilaterally.

“The size of the boulder that Enbridge is rolling up the hill to get their pipeline built just got much bigger today, because the First Nations in that part of the country now have much, much bigger say in whether or not Enbridge can go ahead,” Garth Walbridge, a lawyer for the Metis people, told the CBC.

And it doesn’t stop there – the decision could affect infrastructure projects across the country. The ruling will raise expectations among First Nations tribes and empower them to defend their territory against major development on their ancestral land, according to Bill Gallagher, a former treaty rights negotiator in Canada. “It means that if you’re a miner or a forester or a B.C. hydro transmission company or a pipeliner, that the legal landscape … has shifted,” he said.

By Nick Cunningham of Oilprice.com

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