May 27, 2005
Friday

Fort Simpson, Northwest Territories - This town on a bend in the Mackenzie River has a general store and little else besides endless forests and distant blue mountains. Not an oil derrick is to be seen. But its angry Native tribe is standing in the way of what could be the biggest energy boom in North America's history.

The tribe, the Deh Cho First Nation, is blocking an 800-mile pipeline that would pass through its lands carrying natural gas from the Arctic Ocean to the booming oil-sands mines of Alberta. The tribe says the money and development brought by the pipeline could destroy its culture while leaving little lasting economic benefit.

"We have lived in these lands since time immemorial," said the Deh Cho grand chief, Herb Norwegian. "We are the rightful owners, and this pipeline should not be pushed in against our will."

The Deh Cho anti-pipeline stance is spreading through Native tribes in northwest Canada, putting at risk the development of Arctic natural gas in both Canada and Alaska as well as expansion of Canada's oil sands, which are widely considered the most promising source of foreign oil for the United States in the coming decades.

The oil sands need natural gas to help steam-heat oil out of the sands. With natural gas reserves and production shrinking elsewhere in Alberta and North America, a new supply from the Mackenzie River is needed to fill the gap and keep the oil sands pumping ever-increasing amounts of petroleum south to the United States.

But as the Deh Cho have deftly used the Canadian courts and regulatory process to block the pipeline, their demands have had a domino effect among other tribes that own a one-third share in the project. Grassroots pressure has forced the leaders of those tribes - the Inuvialuit, Gwich'in and Sahtu Dene - to demand broad taxation powers and $40 million in additional payments from their partners in the pipeline.

On April 29, the oil companies stopped all engineering work on the pipeline and threatened to call off the entire project. Michael Yeager, senior vice president of Shell, one of the pipeline partners, accused the Deh Cho and the other tribes of making excessive compensation demands for a pipeline right- of-way and payments for social benefits.

"We're talking about something here that is many, many fold from what we were expecting, and into the hundreds of millions of dollars," Yeager said.

He said Shell and its partners in the consortium - ExxonMobil, Conoco Phillips and Imperial Oil, a Canadian company in which ExxonMobil has a majority stake - had already spent $300 million on preparatory work, yet were way behind schedule and could no longer cope with "more and more months of slippage."

The Deh Cho have held up environmental and planning approvals for the pipeline route, about 40 percent of which crosses Deh Cho lands, by filing regulatory appeals and public information requests. Yeager said his consortium has filed more than 6,500 pages of documents in response to queries from the Deh Cho, the other tribes and the government, with thousands more pages expected to be necessary.

The center of the resistance is Fort Simpson, a longtime trading post that functions as the capital of the Deh Cho region. About 2,500 people live in the town, about two-thirds of them Natives. The pipeline route passes about 10 miles to the east.

Many residents say they feel a special destiny to uphold the rights of Canada's indigenous minority, which has long been hobbled by poverty and social ills.

Since being elected grand chief in 2001, Norwegian has blocked progress on the pipeline while insisting that he is not against the project itself.

"Some people say that if this pipeline never gets built, Herb Norwegian is to blame for it," he said. "And I'm fine with that. But if it does get built, I want my people to get real benefits."

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