The B.C. government announced Tuesday that an agreement had been reached to ban gas extraction* in the Sacred Headwaters. The ban will take effect on the day that a four-year moratorium on all activity related to coalbed methane extraction was set to expire.

Shell Canada has relinquished its tenure on the area, after a prolonged battle that dates back nearly a decade. In 2004, Shell was first granted the rights to the land, which is estimated to contain some 8.1 trillion cubic feet (230 km3) of methane gas, in the northern B.C. Tahltan First Nation territory.

In 2005, nine Tahltan elders were arrested while blockading the road. Since then, several environmental groups have joined in the fight to protect the area, and in recent weeks there has been growing anxiety about the expiry of the moratorium. Talks have been under way, but no details were released until Tuesday.

"The government of British Columbia would like to thank the Tahltan Central Council and Shell for their commitment to positive communications during the last few years," said Energy Minister Rich Coleman in a press release issued jointly by the government, Shell, and the Tahltan Central Council. "Together, we have put agreements in place that respect the interest of all three major parties and have tangible benefits for British Columbians."

In exchange for giving up on the project, in which Shell has already spent money preparing for gas extraction, the company received $20-million in royalty credits to build a water recycling project. Royalty credits are deductions against future royalties owed to the provincial government, not upfront cash.

"Good water management is central to sustainable operations," said Lorraine Mitchelmore, president of Shell Canada, in the same press release. "We now focus on growth opportunities with better commercial and geological prospects in Northeast British Columbia."

The environmental groups involved in the protest are counting the ban as a win.

"Taking on big-energy giants like Shell is no easy feat," said Karen Tam Wu of Forest Ethics in an email to supporters. "Wins like this take patience and determination."

While this project has been cancelled, the province has yet to issue a permanent ban on oil and gas development in the Sacred Headwaters (also known as the Klappan Valley).

"Our people do not want to see it developed," said Anita McPhee, president of the Tahltan Tribal Council in the joint press release, "and we look forward to working with B.C. on achieving permanent protection of the Klappan."

Jimmy Thomson is completing a practicum at The Tyee.

*Story updated at 12:30 p.m. on Dec. 18, 2012.