10/26/2012 04:43 EDT | Updated 12/26/2012 05:12 EST

Jackpine constitutional challenge is probably headed to court

EDMONTON - A constitutional challenge to Shell's Jackpine oilsands mine expansion in northern Alberta seems headed for the courts after a regulatory panel refused to deal with it.

The Athabasca-Chipewyan First Nation filed the challenge with the joint federal-provincial regulatory panel reviewing the project. The band said both Shell Canada (TSX:SHC) and the Alberta government have failed to adequately consult with the First Nation in the project's design.

The band says that unless changes are made to the project's design, it will become difficult for its members to exercise their treaty rights to use the land for traditional activities — rights that are constitutionally guaranteed.

Arguments on the challenge were heard Wednesday.

The panel ruled Friday that it didn't have jurisdiction on questions of constitutional law. That leaves the Athabasca-Chipewyan with little choice other than the courts, said band spokeswoman Eriel Deranger.

"We will likely be going to court very soon on our questions," she said. "There are no options left."

The matter would go before the Alberta Court of Appeal.

Deranger said the band hadn't decided whether to ask the courts for a stay on the hearings until the constitutional question is resolved. Those hearings are to begin Monday in Fort McMurray.

The band says Shell's proposal would require the disturbance of 12,719 hectares of land and destroy 21 kilometres of the Muskeg River, which is considered culturally significant.

The hearings on the project, which would increase Shell's bitumen production by 100,000 barrels a day, come five years after the company originally started the regulatory process.