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Although the first oil strikes in Canada took place in Ontario as early as the 1850s, the federal government did not recognize until the mid 1880s that it was in their best interest to reserve the title to surface and to subsurface petroleum and natural gas. With the settlement of much of western Canada still in its nascent stages at this time, the federal government reserved title to subsurface lands on all land sales occurring after 1887, with these rights eventually being transferred to Alberta, Saskatchewan and Manitoba in 1930.

As a result, mineral rights for over 80 per cent of the land mass of present day Alberta became crown-owned.

However, with the Hudson's Bay Company and Canadian Pacific Railway acquiring significant land holdings in deals with the federal government prior to 1887, they were able to maintain domain over sub-surface rights on land they held up to this point.

This meant that settlers who were purchasing land from the HBC and CPR, also acquired the title to subsurface petroleum and natural gas as part of the sale.

These were the first freehold landowners.

According to Brad Murray, board member for the Freehold Owners Association (FHOA), the HBC and the CPR began to realize that this might not be such a good idea around the time Alberta was experiencing its first major influx of settlers in 1905.

"As they moved into Alberta the railways caught on that maybe they should save the coal rights for our trains, and then they thought maybe they should save them all," said Murray.

"In the early 1900s, homesteaders were getting all the rights, and by 1915, they weren't getting any."

By 1908, both the HBC and the CPR also decided to reserve title to subsurface petroleum and natural gas, and title to petroleum and natural gas.

This meant that mineral rights for over 95 per cent of the province's land mass would be owned either by the province, or by Encana, who first came into being when the CPR created Canadian Pacific Oil and Gas Company (CPOG), later to become PanCanadian Petroleum in 1971.

Encana, which was created in 2002 following the merger of PanCanadian Petroleum with Alberta Energy Company, currently holds subsurface rights to approximately 10 million acres of the province's surface area, much of high natural gas concentrations along the CPR mainline in southern and eastern Alberta. With Encana holding such a major stake in the province's oil and gas industry, it is no surprise that they are in the middle of another controversy, this time surrounding the production of coal bed methane (CBM).

Part Three of "Holding Their Own" will appear in the June 25 edition of the Mountain View Gazette.