Trans Mountain equity deal requires united indigenous group, resource summit told

Photo: Kinder Morgan

Indigenous communities that want to invest in the Trans Mountain pipeline have been urged to unite behind a group that has invited the participation of First Nations and Métis communities in Alberta, Saskatchewan and British Columbia.

“If we [are] truly here about our children and our children’s children, it should be easy enough for us to connect, to come together and unify as one collective voice representing all nations here within Canada,” Delbert Wapass, executive chair and founder of Project Reconciliation, told a National Coalition of Chiefs Energy And Natural Resources Summit Monday in Calgary.

The Indigenous-led organization wants to buy a 51 per cent equity interest in the Trans Mountain pipeline and expansion for $4 billion or Trans Mountain pipeline for $2 billion, raising funds through bank loans and equity markets. At least two other Indigenous groups have indicated an interest in acquiring an interest in the pipeline from the federal government.

Alberta Premier Jason Kenney, a strong supporter of Indigenous participation in the pipeline, has talked about the need for the groups to come together as one unit to submit their bid, Wapass noted. “And we continue to reach out to do that as Project Reconciliation and we will continue to do that.”

Ownership of the Trans Mountain pipeline could provide an opportunity for Indigenous communities to take significant steps to meaningful economic sovereignty and reconciliation, he said. “Ownership would allow all of us to ensure a more prosperous future for our children and our children’s children.”

Wapass acknowledged that although First Nations along Trans Mountain expansion route would be the most affected by the pipeline expansion,  “it’s about sharing, not denying.”

While a percentage of the estimated $250 million annual proceeds would go to per-capital distribution from participating nations, Project Reconciliation also is proposing creation of a sovereign wealth fund, generating funds that could be invested in clean tech, infrastructure and green energy. “If the Norwegians can do it, we can as well.”

“When we talk about economic sovereignty and we see tribes now in Canada that are making more than what government gives in program and service delivery, that’s empowerment,” he said. “You start telling government what to do, rather than government telling you what to do.”

And that’s the aspiration of Indigenous nations, the summit heard. “It’s not to be dependent on, it’s not to be at the mercy of but to come together as a collective to realize a better future today and tomorrow for our children.”

Wapass said afterwards the federal government is continuing to do good work in consulting with First Nations along the pipeline route. “They want to make sure that through their engagement and consultation they are getting it right and I believe they have.”

As for the groups interested in pipeline ownership, other leaders attending the summit and listening “are going to force those groups to come together,” he suggested. Alternatively, governments may bring groups together, offering to act as mediators to help them hammer out an agreement, said Wapass.

The Project Reconciliation executive chair, though, is getting impatient waiting.  “I think we are squandering the opportunity.”

“Right now the appetite for Indigenous reconciliation is high,” he said. “I don’t know where it’s going to be in 30 months.”

While the federal government has said it wants to “risk proof” the Trans Mountain expansion before selling it, “that’s all the more reason there needs to be Indigenous ownership in order to help mitigate the risks,” said Wapass.

He said his group has been receiving a positive response from the communities it has been talking to and more groups want to learn more about the proposition. “Indigenous people want to own it. They don’t want to lose it.”

The summit also heard presentations about two greenfield pipeline projects. The $100 billion Eagle Spirit Energy Holdings Ltd. energy corridor from Fort McMurray to Hyder, Alaska would accommodate four 48-inch pipelines, two for partially upgraded bitumen and two NGL/LNG gas pipelines for exports to Asian markets.  

The $24 billion Montreal-based Canadian Prosperity Pipelines Corporation oil pipeline would transport western Canadian oil to Quebec and to the East Coast of Canada, to provide Canadian energy independence.

 Eagle Spirit

Eagle Spirit, which first and foremost has been a First Nations-led project, is beginning to make progress after what has been a seven-year challenge, said Calvin Helin, company president.

The initial plan was to use the Grassy Narrows port in British Columbia, the largest natural harbour on the West Coast. However, the company has had to move its planned pipeline terminus to an Alaskan port because of the federal government’s Bill C-48 which bans any oil tankers from the northern coast of B.C.

“By running the pipeline to a port which we are just securing in Hyder, Alaska, we will be able, under an American flag, to run a ship out the same route as Dixon Entrance as the ban applies to,” said Helin. That’s because the U.S. claims those waters.  

The two LNG/NGL pipelines would ship about six bcf/d, including natural gas liquids. Plans call for the liquids to be separated out on the coast and for a dehydrogenation feedstock plant.

The project will largely be owned by First Nations who would have just more than 75 per cent of ownership of the holding company that has the corridor. “The equity value of those shares held would be significant,” said Helin. “There will be economic development, long term employment and education.”

The pipelines within the corridor would be limited partnerships, likely owned mainly by the producers.

In the first 10 years, Eagle Spirit would provide about eight million person years of employment, creating prosperity not only for Indigenous communities but Canada as a whole, the summit heard.

The project will throw off enormous amounts of cash and it should be shared with First Nations in Alberta and B.C., said Helin. Eagle Spirit would like to get the support of all of those communities and has made formal letters of offer to a number of different groups and organizations.

There are about 400 First Nations and Eagle Spirit would like to work with all of those that are interested in energy and resource development to further the ends of the National Chiefs Coalition and the Indian Resources Council, he said.  

In Indigenous communities across Canada, the unemployment rate is 25 per cent, the same as that at the height of the Great Depression while in northern communities the rate is 90 per cent or higher and “it’s time for us as Indigenous people to do something about it.”

First Nations chiefs also want to protect the environment and if the federal government was really interested in greenhouse gas reductions it would encourage oil exports off the West Coast to Asia because that has a lower footprint than transporting oil from Alberta to the Gulf Coast and then to Asia via the Panama Canal, said Helin. Shipping LNG to Asia where it would replace coal also would significantly reduce GHGs, he said.

Canadian Prosperity Pipelines

Duane Lauritsen, the president and chief executive officer of privately held Canadian Prosperity Pipelines, told the summit he has been working on the CP3 pipeline project for most of the past year and that within the next month he expects to have word on funding.

A former Alberta resident now living in Quebec, Lauritsen started the pipeline because he believes Canada is stronger when it is united, both domestically and on the world stage and he was concerned about the apparent divide between Alberta and Quebec. “When Canada borrows less money, municipally, provincially and federally, it is because a lot of that money is derived from a healthy energy industry—manufacturing, logistics,” he said. “When the energy industry is healthy, Canada is healthy.”

After TC Energy Corporation and Enbridge Inc. told him they had other priorities than revisiting the idea of Energy East, Lauritsen, an engineer and former project manager in the oilsands, decided to launch his own pipeline company with its headquarters in Quebec.

 “It was a complete change in philosophical approach,” he said. “It’s not a western organization anymore coming in [to Quebec] and trying to do it in their sovereign province.”

Canadian Prosperity has satisfied itself the project works from a financial perspective and it can offer investors a 24 per cent (before tax) rate of return, said Lauritsen.  Based on the Canadian Association of Petroleum Producers’ (CAPP) forecast, there will be sufficient crude supply and additional pipeline capacity will be needed by 2030.

The company’s last required pillar is empowerment with Indigenous empowerment the primary focus, said Lauritsen. Anything above what it has guaranteed its shareholders will be available for disbursements,  “for sharing of legitimate prosperity.”

For Indigenous groups where the company can’t find a mechanism for them to invest on an equity basis, it will put in trust equity shares and “we are going to be gifting those equity shares to those Indigenous groups.”

The empowerment mechanism also supports an annual investment in research and development of technologies for reducing greenhouse gas intensities or perhaps in R&D for a more reliable transition to some level of green energy, such as solar or wind power.

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