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Bloomberg: Alberta Natives Sue to Block Shell Oil Sands Project (Update1)

By Joe Schneider

Oct. 2 (Bloomberg) — A native group in Alberta, Canada, sued the provincial government in a bid to block Royal Dutch Shell Plc’s multibillion-dollar expansion of an oil-extraction plant at Carmon Creek.

The Woodland Cree First Nation said it filed the complaint today in Alberta Court of Queen’s Bench in Calgary. The tribe seeks an order requiring the province to talk with natives before approving oil and gas development projects and halting Shell’s expansion. The group asked for an Oct. 31 hearing.

“The province has to consult with us about resource development in our territory that could have an effect on the environment,” Chief William Whitehead said in a statement.

Shell, based in The Hague, plans to boost production at Carmon Creek to 100,000 barrels a day from the current 12,500 barrels, at a cost estimated at “few billions” of dollars, the native group said. The Cree said Royal Dutch Shell hasn’t been more specific about the cost estimate.

Adrienne Lamb, spokeswoman for Shell’s Canadian unit, declined in a phone interview to disclose specific costs of the project.

The company still needs regulatory approval for the expansion, which may take two years, Lamb said. If approved, construction would take another 2 1/2 years, she said.

Lamb declined to comment on the suit. The company consults with native groups and attempts to minimize the environmental impacts of its projects, she said.

Water and Hunting

Carmon Creek is about 40 kilometers (25 miles) northeast of Peace River, which is about 500 kilometers (300 miles) by road northwest of Edmonton.

David Dear, a spokesman in Alberta’s Justice Department, wasn’t available to comment.

The Shell plant is 6 kilometers (4 miles) from the native territory and will affect residents there by diverting water from Carmon Creek and reducing the area’s hunting potential because animals will be scared off by the noise, the natives said in a statement.

Rising oil prices are spurring companies including Shell and Suncor Energy Inc. to spend billions to extract oil from Alberta’s tar sands.

The oil-soaked sand may hold 175 billion barrels of recoverable oil, second after Saudi Arabia’s reserves of 259 billion barrels, according to the Canadian Association of Petroleum Producers.

Alberta’s Production

Alberta produces about 68 percent of Canada’s daily oil output and 77 percent of gas production, according to the association.

Crude oil for November delivery fell 19 cents to $80.05 a barrel on the New York Mercantile Exchange. Prices are 30 percent higher than a year ago. Futures reached $83.90 a barrel on Sept. 20, the highest since the contract was introduced in 1983.

The case is Between Woodland Cree First Nation and Lieutenant Governor in Council of Alberta, Court of Queen’s Bench (Calgary).

To contact the reporter on this story: Joe Schneider in Toronto at [email protected] .

Last Updated: October 2, 2007 17:59 EDT

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