25 Feburay 2008
Pioneer Families Press for Gas Fortune
Edmonton Alberta - A rural sore spot has erupted into an
election issue as pioneer families demand support for claims to a fortune in natural gas under farms between Edmonton and Calgary.
"They're stealing our resources," Else Pedersen, president of the Alberta Freehold Mineral Owners Association, said last week
while distributing petitions and plotting strategy at a meeting in Premier Ed Stelmach's Fort Saskatchewan-Vegreville
riding.
Pedersen, a former chairwoman of the Ponoka Chamber of Commerce, is urging her peers to sound out candidates for all parties - and vote
against any who reject private mineral rights claims.
The contested gas fortune is currently worth up to $4 billion and its value will grow as production methods and energy prices improve,
said Calgary geologist David Speirs, an association director.
The dispute centres on who owns the gas in coal bed methane deposits that attracted a drilling flurry of about 11,000 wells between
Edmonton and Calgary after new technology became available five years ago.
The fortune remains beyond the reach of private mineral rights holders in the region, Pedersen said.
Provincial politicians are almost unanimously afraid to intervene in a dispute that has stalled family ownership and royalty claims in
marathon court cases while industry pumps out the wealth, she added in an interview.
Only one political ally has stepped forward. The 3,800-member association, representing an estimated 20,000 freehold
owners who are often old family pillars of rural communities, has won over prominent veteran Conservative Ty Lund.
"These people have the gas rights," said Lund, a former senior cabinet minister who has emerged as the private mineral rights
owners' political champion in his re-election campaign in Rocky Mountain House.
"Their ancestors paid for those rights," Lund said in an interview.
The freehold association's members are heirs to homesteaders who settled on land originally granted by the federal government to the
Canadian Pacific Railway as a construction subsidy.
Ottawa's aid included mineral rights. But the steam engine-era CPR "reserved" the coal, or kept it under the
property, when it divided the grants into farm parcels and transferred them to settlers in private titles to about 64,000 square
kilometres, or 10 percent of Alberta's land area.
EnCana Corp., Canada's leading gas producer, became heir to the coal rights when it was created about seven years ago in a merger
between former CPR subsidiary PanCanadian Energy and Alberta Energy Co.
EnCana lost an opening battle last year in the war over exclusive ownership of coal bed methane gas. A 10-day skirmish
involving 20 lawyers and 21 witnesses played out before the Energy Resources Conservation Board.
The board ruled coal bed methane well licences can be given to other firms because gas and coal are separate for practical purposes of
production.
But the property rights conflict continued. The board said "ultimate authority on ownership belongs to the courts" in private
disputes among landowners and companies.
The Alberta Court of Appeal last fall agreed to consider EnCana's claim to exclusive ownership of coal bed methane in its CPR legacy.
No date has been set for the appeal hearing.
The firm offered to pay royalties on contested gas while the issue is in court. EnCana also pledged not to demand royalty repayments
if it eventually wins the case.
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