Environmental group files lawsuit over 'expired' Shell Arctic oil permits

Environmentalists have asked a court to declare invalid a groupof Arctic offshore energy exploration permits that are delaying thecreation of Canada's third national marine protected area.

On Monday, the World Wildlife Fund filed a lawsuit in FederalCourt alleging that 30 permits held by Shell Canada at the easterngate of the Northwest Passage lapsed decades ago.

"There's no indication they've ever been renewed," said IanMiron, the group's lawyer.

The federal government and regional Inuit groups have been tryingfor a generation to protect the waters of Lancaster Sound, theeastern gate of the Northwest Passage and home to a wealth of Arcticseabirds and mammals. But talks on drawing the boundaries of thearea, off the north coast of Nunavut's Baffin Island, have beencomplicated by 30 exploration permits issued in 1971 to Shell.

Ottawa, under the previous Conservative administration, argued tokeep the permits outside the area, but Inuit and environmentalgroups wanted the protected area to include them. Most of the areacovered by the Shell permits is considered to have "high" or"very high" conservation value.

However, researchers for a number of environmental groups foundthe permits expired in 1979 with no record of renewal. The federalgovernment couldn't find such records either.

As well, Canada's offshore regulatory regime has changed twicesince the permits were issued. There is no record of those permitsbeing brought into compliance.

Miron said exploration rights are meant to encourage companies toget out and do some work. They are never intended to lastindefinitely.

"You can't just sit on them," said Miron.

In a series of emails, a government spokesman told anenvironmental researcher that the permits would be considered validbecause both the company and the government have acted as if theywere. Legal scholars familiar with the issue have suggested that maynot be enough.

'We have an obligation to act'

David Miller, president of World Wildlife Fund Canada, said thegroup felt it had to go to court.

"We have an obligation to act," he said.

Miller said the permits have been a major reason why LancasterSound still isn't a national marine conservation area. Local Inuithave been fighting for its establishment since the 1980s.

"They were certainly pretty significant under the previousgovernment. They seemed to stall any discussions."

In an email on Monday, Shell spokeswoman Tara Lemay said thecompany wouldn't comment yet on the lawsuit.

"We are aware of a court application filed by World WildlifeFund Canada and are currently assessing next steps," she said.

In minutes of a May 2014 meeting held to consider the protectedarea, Shell said it wouldn't discuss relinquishing the lease.

It said it would expect to be compensated for losing the leases. It also insisted on conducting seismic testing on the area beforeentering into negotiations on the fate of the leases.

Keeping seismic testing out of those waters is one of the reasonsInuit want the area protected. Inuit communities have twice gone tocourt to block seismic testing around Baffin Island.

In the same meeting, a Shell representative played down thelikely value of those leases and said they wouldn't be a highpriority for the company for at least 15 years.