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

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

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

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

The federal government and regional Inuit groups have been trying for a generation to protect the waters of Lancaster Sound, the eastern gate of the Northwest Passage and home to a wealth of Arctic seabirds and mammals. But talks on drawing the boundaries of the area, off the north coast of Nunavut's Baffin Island, have been complicated by 30 exploration permits issued in 1971 to Shell.

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

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

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

Miron said exploration rights are meant to encourage companies to get out and do some work. They are never intended to last indefinitely.

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

In a series of emails, a government spokesman told an environmental researcher that the permits would be considered valid because both the company and the government have acted as if they were. Legal scholars familiar with the issue have suggested that may not be enough.

'We have an obligation to act'

David Miller, president of World Wildlife Fund Canada, said the group 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 Lancaster Sound still isn't a national marine conservation area. Local Inuit have been fighting for its establishment since the 1980s.

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

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

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

In minutes of a May 2014 meeting held to consider the protected area, 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 before entering into negotiations on the fate of the leases.

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

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