Alberta Sweetgrass Banner Image

Share this with friends

Innovative approach to oil, gas development

Chief Gerry Ermineskin signs the agreement as the other signatories Blaine Favel
Author: 
By Shari Narine, Sweetgrass Writer, Edmonton
Volume: 
17
Issue: 
6
Year: 
2010

The Ermineskin Cree Nation has signed an agreement with a fledgling oil and gas company that both partners are hoping is the start of doing energy business on First Nations’ land in a new way. After six months of negotiations, Ermineskin Chief Gerry Ermineskin signed the 50/50 joint venture partnership agreement with Blaine Favel, president and chief executive officer of One Earth Oil and Gas Inc. One Earth Oil and Gas is in discussion with other First Nations, but this is the first agreement that the company, part of the Sprott Resource Corp., has signed with a band council. “It’s a new and innovative way to pursue. . . energy develop-ments with First Nations. Our business model is predicated on the fact that we want partnership agreements with First Nations that are quite unique, quite different from the status quo,” said Favel. Common practice, he said, is for energy companies to lease the land from the First Nations, “making a soft commitment” to provide minimal employment, training and business opportunities, and limited transfer of skills and expertise. “(They’re) always leaving the First Nation in the position of not having an equity interest in development, not having ownership and really not generating the true economic potential of their lands,” said Favel. But One Earth will be working on land that will remain leased by Ermineskin Cree Nation and the result will be “the (First) Nation ends up having a greater piece of the pie.” With an equal partnership, Ermineskin Cree and One Earth will share development costs in the wells and receive a share in company profits. Ermineskin Cree Nation will still receive its royalties. But beyond that, prior to work beginning in the field, One Earth will work directly with Ermineskin Resource Development to identify needs and develop training programs. ERD will select both employees and service companies. Favel stressed that for the venture to be successful, local services had to be offered at competitive rates and performed according to industry standards. Money spent in the various aspects of the energy industry will be directed toward First Nation-owned enterprises. “The economic spinoffs that we’ll derive from this agreement . . . these are things we look forward to for our members for employment and training and the economic opportunities for our First Nation,” said Ermineskin. The chief stated that unemployment on the First Nation, which is one member of the Four Nations of Hobbema, sits at 80 per cent and has been high for quite some time. Favel expected One Earth to employ 10-25 people directly. “I would be most happy to have 100 per cent employees First Nation’s people,” said Favel, former chief of the Poundmaker Cree Nation, in Saskatchewan. Favel said both oil and gas sites have been identified on Ermineskin and there is close to 15,000 acres of land that is yet untapped on the main reserve. One Earth is looking to access both natural gas and oil resources, but the priority will be placed on oil at this time because of the low price natural gas is fetching. The land has remained untouched, said Ermineskin, largely because “the (energy company) deals were too one-sided and not favourable to us.” “We’re here for a long time because the product will be here for 20 years and we want to build a number of good projects with First Nations. This is the first one. We have a few others in the hopper. We could have 10, we could have 20. But the idea would be to put First Nations in a really fair position where they would have a chance to develop their resource, create expertise,” said Favel. Favel noted that One Earth Oil and Gas is also pursuing off-reserve lands and has committed to Ermineskin Cree Nation to provide them with the opportunity to invest in this further development. Last year Sprott Resource Corp. launched One Earth Farms, which Favel began, and is now leasing close to one million acres of land from First Nations in Manitoba through to Alberta. Based on the strength of this partnership, One Earth Oil and Gas was launched. One Earth Oil and Gas is based in Calgary. Favel said One Earth, whether corporate farming or corporate energy development, has set a “high water mark for what we thought corporate relations should be with First Nations.” “We look forward to the future to this day on to better our community and our members,” said Ermineskin

Related Content