Mailing address:
3536 - 106 Street
Edmonton, Alberta T6J 1A4
Phone: 403-436-5652
Fax: 403-437-0719
May 01, 1995
On February 23rd the Provincial agency charged with supposedly
regulating the energy industry in Alberta -- the Energy Resources
Conservation Board (ERCB) -- reaffirmed its earlier decision to
approve construction and operation of Unocal's sour gas processing
plant at Lubicon Lake. The new Unocal sour gas processing plant is
located less than 3 kms. from the area where the Lubicons have been
seeking for over 50 years to establish a Lubicon reserve. Enclosed
for your information is a copy of a "news release" and "executive
summary" on the ERCB decision which, among other things, incorrectly
states that the Unocal plant is located "about 4 kilometres" from the
proposed Lubicon reserve. (A copy of the full 28 page ERCB decision
plus attachments can be obtained by contacting either the Lubicon
office in Edmonton or the new Alberta Energy and Utilities Board
(AEUB) at the address indicated on the back page of the attached
"news release".)
Although informed of Lubicon opposition to the Unocal sour gas
processing plant before commencement of plant construction, the ERCB
didn't decide to reconsider its earlier approval of the plant until
after the plant had already been built -- significantly biasing the
eventual decision. Similarly reaffirmation of its earlier decision
was then announced after the ERCB had already been amalgamated into a
new and even more political super Provincial "regulatory" agency
called the Alberta Energy and Utilities Board (AEUB). In other words
you can't complain to ERCB about its decision. Conveniently by the
time the decision was issued the ERCB no longer existed.
The new AEUB was created in the midst of considerable controversy
last fall when Alberta Premier Ralph Klein simultaneously dumped
Deputy Premier Ken Kowalski from the Provincial Cabinet and appointed
him head of the soon to be established AEUB. At the time Kowalski
was arguably the second most powerful man in the Provincial
government and was widely regarded to be reigning Provincial pork
barrel king. One of Kowalski's claims to fame came from calling
environmentalists "pot smoking anarchists". Another of Mr.
Kowalski's claims to fame came from saying people who support pay
equity for women are communists since, he explained, it "means
everyone in society will get the same amount of money". Those are of
course not normally the kind of credentials or public persona one
would expect in the head of a supposedly "independent, non-partisan,
quasi-judicial Provincial regulatory body".
Kowalski's appointment as head of the new AEUB predictably triggered
widespread protest from opposition political parties and
environmentalists. Not so predictable was criticism by the Calgary-
based Alberta oil industry -- especially since Premier Klein is
acutely attuned to the views of the Calgary-based Alberta oil
industry and it's most improbable that he would have appointed
Kowalski to head the new Provincial oil and gas "regulatory" super
agency without first seeking and obtaining oil industry approval of
the appointment. Oil industry criticism of the appointment was
therefore likely an integral part of Kowalski's carefully
orchestrated political assassination specifically intended to
undercut Kowalski's considerable political support among Conservative
back-benchers who predictably would be little inclined to challenge
the views of the powerful Calgary-based oil industry.
Normally publicity-shy oil industry spokesmen came out of the
woodwork and publicly charged that Kowalski's appointment threatened
the ERCB's "worldwide reputation...(for)...competent and impartial
regulation of the Province's energy resources". Phooey. That's a
self-serving deception carefully fashioned and maintained by the
Alberta government and the Calgary-based oil industry about an agency
which essentially provides a facade of regulation and public sanction
for just about anything the oil industry wants to do in Alberta.
Before Kowalski's appointment was cynically used to discredit and
knock him off politically the person considered to have an inside
track on the job was man named Sherrold Moore. Mr. Moore is a close
associate of Premier Klein, a bag man for the ruling Provincial
Conservative Party and an ex-senior vice president of Amoco Canada
Petroleum Company -- which is a wholly owned subsidiary of a major,
multi-national oil company headquartered in Chicago called Amoco
Corporation. At last notice Mr. Moore was still a member of the
Amoco Board of Directors. The possibility of Mr. Moore's equally
questionable appointment wasn't criticized by the Calgary-based oil
industry but was heralded as being in the fine tradition of the
supposedly "independent, non-partisan, quasi-judicial ERCB".
The Lubicons of course knew about all of these cosy relationships in
advance and therefore didn't expect a fair and impartial hearing
before the ERCB. What they did hope to achieve was full public
disclosure of Unocal's slick dealing and vetting of the issues --
something which they only partially achieved due to a notable lack of
media coverage. The concluding remarks of those attending the
hearing made clear that they were not deceived by Unocal's elaborate
efforts to convince people that Unocal had not deliberately misled
the Lubicons. Unfortunately those not attending the hearing missed
Unocal's enlightening explanation of why Unocal officials didn't
mention sour gas in any of the written materials they gave the
Lubicons because they were supposedly relying upon predictably
disputed verbal communications. (One would have thought mention of
sour gas would have snuck into the written materials at least once --
if only by accident.)
Why the media didn't cover the hearing is an interesting question. It
was not for lack of interest on the part of the working press --
several of whom specifically asked to cover the hearing and were not
allowed to do so.
The media situation in Alberta, historically always problematic, has
taken an even more disturbing turn since the election of the media-
wise Klein government. And not only with regard to coverage of the
Lubicon issue but with regard to news coverage in Alberta generally -
- the masterful job of publicly setting-up and discrediting the high-
flying Kowalski in a brief ten day flurry of obviously planted media
stories being only one case in point. Reporters sympathetic to the
Provincial government are regularly fed pre-digested "inside"
information which they use to promote both the government's agenda
and their own careers. Reporters who've historically covered the
Lubicon issue have been squeezed out, transferred to other beats or
variously censored. The Calgary Herald, which in the past has
provided good coverage of the Lubicon issue despite continuing howls
of protest from powerful Calgary interests, has now made a policy
decision not to cover anything north of a town in central Alberta
called Red Deer -- even when the story involves a generic
environmental issue like sour gas and a major Calgary-based company
like Unocal. Taken together these things have resulted in a
situation where reporters in Alberta essentially serving as conduits
for government propaganda get the vast majority of newspaper space
and air time -- to the point where almost nothing else is covered
(and anything else which is covered is effectively buried and its
significance lost or at least obscured.)
The ERCB hearing lasted 10 ten days over a three week period in
November and December and was the scene of almost continuous high
drama. A number of prominent personalities made submissions and gave
evidence. Unocal was charged with defrauding and deceiving not only
the Lubicons but also the ERCB.
Tension was high and sparks flew from the first day of the hearing
when Unocal unsuccessfully tried to disqualify all intervenors but
the Lubicons to the last day of the hearing when Unocal lawyer Brian
O'Ferrell -- who is coincidentally a law partner of ex-Alberta
Provincial Premier Peter Lougheed -- threatened that an adverse ERCB
decision would "negatively affect the way Unocal views Alberta as a
place to invest". The reaction of those attending the hearing to the
evidence presented and to Unocal tactics at the hearing was made
crystal clear during the last day of the hearing when speaker after
speaker indicated that the more they saw and heard from Unocal the
more they believed Lubicon charges of duplicity, deceit, fraud and
deception.
The President of Unocal Canada Fritz Perschon attended the hearing
throughout glad-handing anybody who'd listen to him -- very much like
an eternally optimistic and endlessly persistent shoe salesman trying
to sell "one size fits everybody" shoes to increasingly dubious
customers. Mr. Perschon was supported by several other senior Unocal
officials, an ex-senior Provincial government native affairs official
hired by Unocal on contract, current senior Provincial government
native affairs officials backing up Unocal lawyers and the ex-senior
Provincial government official hired by Unocal on contract, an ex-
Provincial government wildlife officer hired by Unocal on contract
and representatives of a so-called environmental consulting firm
hired by Unocal which is coincidentally partners with the Provincial
government in a controversial toxic waste disposal plant where the
Province guarantees the company a profit costing $25 million a year
in public funds. (If there seems to be an inordinate amount of
overlap between Unocal and the Alberta government it's because
there's an inordinate amount of overlap between Unocal and the
Alberta government. To paraphrase a comment made by satirist Lenny
Bruce about the forces of good and evil in Chicago, in most places
there's continual tension between the private and public sectors; in
Alberta, it's nice, the oil companies and the Provincial government
all get along and you can't tell the difference.)
The Lubicons including Chief Ominayak and his Council also attended
the hearing throughout. They were supported by a variety of local,
Provincial, national and international environmental organizations;
by Indian Nations and organizations; by organized labour; by human
rights organizations; by civil rights organizations; by aboriginal
rights organizations; by church representatives; by concerned
individuals; by the Lubicon Settlement Commission of Review and by
both Provincial opposition political parties.
Regarding Lubicon charges of fraud the ERCB concluded that there "was
a misunderstanding between the parties in the discussion of this
project prior to the issuance of the plant approval". That wasn't
the evidence. The Lubicon evidence was that Unocal did not tell them
about plans to build a sour gas processing plant. Unocal evidence
was that Unocal did tell the Lubicons about plans to build a sour gas
processing plant. That was the evidence. One party or the other is
lying. There is no basis for a conclusion of "misunderstanding"
based on the evidence.
The ERCB decision goes on to say "While there is some onus on the
applicant (Unocal) to present the proposed development in a fair way
there is also an obligation on the affected parties (the Lubicons) to
make efforts to understand the implications of a project". It says
"It is not evident that such efforts were made by the Lubicons in
securing advice from those that may be in a position to provide it".
The decision does not say how one exercises one's responsibility to
"understand the implications of a project" which one has no way of
knowing is being planned. Moreover the evidence is that the Lubicons
did in fact seek advise "from those that may be in a position to
provide it" immediately upon learning from others that Unocal was
planning to build a sour gas processing plant -- they just weren't
interested in hearing the views of people bought and paid for by
Unocal to try and convince them that sour gas is good for children
and other living things.
On the question of whether the Lubicons retain unceded aboriginal
land rights over traditional Lubicon territory, and consequently
whether the ERCB as an agency of the Alberta Provincial government
legally had the right to approve construction of a sour gas
processing plant on unceded Lubicon territory, the ERCB concluded
both that "the Board...has no authority to enter into such issues"
(as aboriginal land rights) and also that "The Board believes it has
full statutory authority to regulate energy related activities on
this disputed land and holds the view that the mineral and land
surface leases were properly obtained by Unocal from the (Provincial)
Crown". You can't have it both ways. By proclaiming that it has
"full statutory authority to regulate energy related activities on
this disputed land and...that the mineral and land surface leases
were properly obtained by Unocal from the (Provincial) Crown", the
ERCB -- a Provincial government "regulatory" agency which clearly
"has no authority to enter into such issues" under Canadian law -- is
effectively denying the existence of Lubicon land rights over the
unceded traditional Lubicon territory and is forcibly asserting
Provincial government jurisdiction over "this disputed land". (The
question of course again becomes one of effective redress given that
Lubicon experience with the Canadian courts is no different than
Lubicon experience with the ERCB; i.e., judges who are ex-head oil
company lawyers, judges who are ex-partners of head oil company
lawyers on the case, judges who retire from the bench and are
appointed to oil company boards and so on.)
Going beyond the issue of the Unocal sour gas processing plant the
ERCB also decided to cancel a "notification agreement" negotiated
between the Lubicons and the ERCB in 1986 after several serious
disputes -- one of which involved Unocal. At that time the ERCB was
taking the position that aboriginal land rights weren't an interest
they needed to take into account. The Lubicons threatened to tie up
ERCB approvals by taking the ERCB to court over interpretation of its
very general mandate. In this context the ERCB agreed to ask
companies to check with the Lubicons before making application to the
ERCB and to hopefully obtain Lubicon agreement not to oppose an
application to the ERCB.
The primary purpose of the 1986 "notification" agreement between the
Lubicons and the ERCB was to protect particularly sensitive sites
like burial grounds from resource exploitation activity. As long as
the proposed project didn't threaten such a sensitive site, and the
company agreed to respect Lubicon wildlife and environmental
concerns, the Lubicons typically agreed not to oppose an application
by the company to the ERCB for approval of the project.
It was in the context of this "notification agreement" with the ERCB
that Unocal first contacted the Lubicons to discuss expansion of
their existing battery station. In retrospect it's clear that Unocal
knew the Lubicons would never in hell agree to construction of a sour
gas plant adjacent to the area where the Lubicons have been planning
for over 50 years to establish their reserve. So Unocal officials
misrepresented their plans to the Lubicons and deliberately created
an ambiguous paper trail enabling them to tell the Lubicons that they
were talking about expanding an existing oil battery station and to
tell the ERCB that the Lubicons had agreed not to oppose a sour gas
processing plant. (Unocal officials undoubtedly believed that they
could build their sour gas plant at the site of the existing battery
station and the Lubicons would be none the wiser. They might have
pulled it off too had others with knowledge of their plans to build a
sour gas processing plant not alerted the Lubicons.)
After Unocal got caught trying to slip their sour gas processing
plant past the Lubicons they first tried to argue that they didn't
need to obtain Lubicon agreement not to oppose their application to
the ERCB because, they said, their plant was located outside of the
95 square mile proposed reserve area around Lubicon Lake and was
therefore supposedly outside of the so-called ERCB "notification
area". They knew better and were bluffing -- as is made clear from
their original letter to the Lubicons on this matter which states
explicitly "We have been advised by the Energy Resources Conservation
Board that the consent of the Lubicon Lake Nation must be obtained in
support of the referenced plant expansion". It was just that denying
that they were required to consult with the Lubicons was the best
they could do when they were first charged with not consulting the
Lubicons. (It's also a typical Unocal bully boy tactic when
challenged or questioned about anything.)
Told that their sour gas plant was well within a much larger 900
square mile ERCB "notification area" Unocal officials reacted
indignantly that the "notification area" shouldn't be any bigger than
the 95 square mile proposed reserve area. They then carried this
argument into the hearing asking that the "notification area" be
unilaterally defined by the ERCB to include only the 95 square mile
proposed reserve area because, according to Unocal, the original
agreement provided for a larger area only because nobody knew in 1986
how big an eventual Lubicon reserve would be or where it would be
located. The ERCB adopted this Unocal argument holus-bolus and
unilaterally redefined the so-called "notification area" as demanded
by Unocal despite the fact that the original agreement had nothing at
all to do with an eventual reserve area but rather with protecting
particularly sensitive sites scattered throughout the traditional
Lubicon territory like 19 burial grounds. (Redefining the
"notification area" likely serves a bigger oil
company/ERCB/AEUB/Provincial government purpose as well. Natural gas
has become the fuel of choice for the huge U.S. utilities. It has
therefore become an attractive natural resource to exploit -- after
oil in the late 70s and timber in the mid-80s. There is apparently
abundant natural gas in the unceded Lubicon territory. The natural
gas in the immediate vicinity of Lubicon Lake is apparently sour gas.
It's clear that the Lubicons will oppose a proliferation of sour gas
plants ringing the area where they raise their children. By re-
defining the size of the "notification area" the oil
companies/ERCB/AEUB/Provincial government are largely relieving
themselves of the negotiated requirement to give the Lubicons advance
notice of their plans to exploit the sour gas resources in the
immediate vicinity of Lubicon Lake. Needless to say effectively
pushing things back to before the hard-won 1986 "notification
agreement" -- especially at a time when it appears that the oil
companies are gearing-up for another massive and particularly
worrisome run at Lubicon natural resources -- doesn't bode well for
the embattled and already seriously damaged Lubicon society.)
Regarding the impact of resource exploitation activity upon the
traditional Lubicon society and way of life the ERCB decision says
"The Board recognized there has been some social impacts brought
about by industry, but it must also be cognizant of its
responsibility to regulate the energy industry in the overall
provincial public interest". What we're of course taking about here
is a euphemistic way of referring to destruction of the traditional
Lubicon economy and way of life resulting in what many knowledgable
independent observers have concluded is genocide of the Lubicon
people in the name of oil company profits and related Provincial
government royalty payments.
The ERCB decision says "The Board concluded that the plant would have
no undue impact on the people or the environment of the area" --
primarily because the plant has been built "adjacent to an existing
oil battery site" and consequently would not disrupt anything that
hasn't already been disrupted. This is an argument which the
Lubicons have been hearing from the Provincial government and the oil
companies for years. Basically the way the argument goes is don't
worry about this project -- it's small and won't disturb very much.
The argument for the next project is then that the area has already
been disturbed by the first project and so on. Often the individual
projects do seem relatively innocuous in the context of the
relatively vast traditional Lubicon territory. However the cumulative
impact of all of these projects has been devastating upon the
traditional Lubicon economy and way of life to the point where the
very survival of the Lubicon people as a distinct society is now
seriously imperiled.
The ERCB decision says "The Board believes that considerable economic
benefit could be gained and the social structure of the band
stabilized if a measure of co-existence could be mediated" --
whatever the hell that means. All of the available evidence is that
massive resource exploitation activity in the unceded traditional
Lubicon territory is in fact tearing Lubicon society to pieces. At
best the Unocal plant is expected to produce only one or perhaps two
technical jobs -- neither of which any Lubicon would likely qualify
for even if one were interested in working at a plant considered by
most Lubicons to represent a deadly threat to the health and well-
being of their children. As for a "so-called measure of co-existence
being mediated" -- well that's what the notification agreement which
the ERCB has now effectively cancelled was all about.
On the question of Lubicon health and environmental concerns the ERCB
essentially discounts the evidence of the Lubicons and others living
in the vicinity of existing sour gas plants as unscientific,
undocumented and unsubstantiated choosing instead to rely on the
self-serving charts, graphs and statistics produced by an
environmental consulting firm hired by Unocal called Bovar-Concord.
The ERCB decision describes Bovar-Concord stuff as "compelling
evidence that this sour gas plant is no threat to any community". The
Board makes no mention or comment about the well known fact that
Bovar-Concord is a division of company called Bovar Inc., or that
Bovar Inc. is a partner of the Alberta provincial government in
ownership of a highly controversial toxic waste disposal plant, or
that Bovar Inc. has a sweetheart deal with the Alberta Provincial
government which guarantees it a profit on a plant which has lost
money every year since its construction, or that this sweetheart deal
between Bovar Inc. and the Alberta government has cost Alberta
taxpayers $250 million in construction and operating costs since
1987, or that this sweetheart deal between Bovar Inc. and the Alberta
government is currently costing $25 million a year in public funds,
or that it is estimated that this sweetheart deal between Bovar Inc.
and the Alberta government will cost Alberta taxpayers $800 million
by the year 2008, or that the ubiquitous ex-Alberta Premier Peter
Lougheed is a consultant to Bovar Inc., or that all of these
relationships and vast sums of money raise a very real question about
whether Bovar-Concord's shiny charts should be given more weight and
credibility than the evidence of an otherwise disinterested Alberta
dairy farmer whose cattle have sickened, died, had spontaneous
abortions, delivered calves with birth defects and so on since
construction of a sour gas processing plant in his area.
During the ERCB hearing, and as a result of the controversy generated
by the hearing, a Catholic religious order with shares in Unocal
called the School Sisters of St. Francis became concerned about
Unocal's sour gas processing plant at Lubicon Lake and attempted to
have a resolution asking Unocal management for information on the
situation included on the agenda of Unocal's Annual Shareholders
Meeting. Unocal management responded by asking for a meeting with
the School Sisters to try and talk the School Sisters out of pursuing
the matter at Unocal's AGM. The School Sisters agreed to a meeting
but only if representatives of the Lubicons could also be involved.
After some discussion a meeting was agreed in Little Buffalo on
January 21st. Notes on that meeting are attached and are recommended
reading for anyone seeking to understand the dispute between Unocal
and the Lubicons.
After Sister Laurie Michelowski of the School Sisters of St. Francis
left Chicago on her way to Little Buffalo for the January 21st
meeting Unocal management challenged the School Sisters resolution
with the Securities and Exchange Commission. Sister Michelowski was
not informed about the Unocal challenge until after the January 21st
meeting. Normally such meetings are held to discuss proposed
resolutions and the School Sisters don't agree to meet if a challenge
has already been filed. Typical Unocal tactics.
The School Sisters subsequently successfully argued their resolution
with the Securities Exchange Commission and won the right to have it
included on the proxy statement provided to all Unocal shareholders.
Unocal responded by moving the AGM from Los Angeles where concerned
environmental groups were gearing-up to lobby Unocal shareholders to
Houston, Texas, where there are fewer environmentalists to worry
about.
In a replay of rushing construction of the plant to completion before
the ERCB hearing, Unocal put its new sour gas processing plant at
Lubicon Lake into operation in mid-April -- effectively preempting
prior shareholder consideration of the matter. Putting the plant
into operation was accompanied by a show of force by the RCMP in the
Lubicon area presumably intended to let Lubicon parents know that
there's nothing they can do to protect their children from the feared
consequences of Unocal's sour gas processing plant. How the Lubicons
will respond to this RCMP-delivered message and the fact that the
plant has now been put into operation isn't yet known.
The Unocal AGM is scheduled for Houston on May 22nd. Letters sent to
the Alberta Provincial government protesting the ERCB decision will
only elicit a form response indicating that the AEUB/ERCB is "an
independent, quasi-judicial body" and that it would therefore be
"inappropriate for the Alberta Government to attempt to interfere
with the recent decision of the AEUB to approve the Unocal plant".
Letters to Unocal protesting operation of the plant will only elicit
a form response summarizing the ERCB decision and expressing
willingness to work with the Lubicons "if allowed to do so by Chief
Ominayak". Concerned people should therefore write to the School
Sisters of St. Francis letting them know that people across Canada
and around the world oppose the operation of Unocal's sour gas
processing plant at its current location, are monitoring the
situation, are monitoring how Unocal shareholders respond to the
situation and are prepared to participate in a boycott of Unocal
products if the Unocal sour gas processing plant at Lubicon Lake
isn't shut down.
Having Unocal shareholders decide that operation of the Unocal sour
gas processing plant at Lubicon Lake is a bad idea is the easy way to
do it. If Unocal shuts down the plant other oil companies will think
twice about moving into the controversial Lubicon territory at least
over Lubicon objections this fall. If the Unocal sour gas processing
plant at Lubicon Lake continues to operate over Lubicon protests it's
likely that the other oil companies will conclude that they can
basically do what they please in the Lubicon territory without
concern for adverse Lubicon reaction.
The mailing address for the School Sisters of St. Francis is:
Sister Laurie Michalowski, SSSF
Chair, SSSF Corporate Responsibility Committee
4127 N. Central Park
Chicago, Illinois USA 60618
Fax: 312-463-6806
** ** ** ** ** ** ** ** ** **
Attachments:
ERCB February 23, 1995 News Release and Executive Summary
Miscellaneous newspaper articles on Ken Kowalski
November 11, 1994, letter from the SSSF to Unocal enclosing
Shareholders Resolution
January 21, 1995, Unocal/SSSF/Lubicon meeting minutes
February 26, 1995, Edmonton Journal article entitled "Sour gas plant
cleared for start-up near Little Buffalo"
March 26, 1995, Edmonton Journal article entitled "Lubicon, Catholic
order force debate on start-up of Unocal sour gas plant"
Transcript of March 29, 1995, CBC Radio interview with Sister Laurie
Michalowski, SSSF
April 19, 1995, Edmonton Journal article entitled "Lubicon-opposed plant runs"
Sample letters from Lubicon supporters to the SSSF