Robert Tuttle and Esteban Duarte
Wed, August 9, 2023
(Bloomberg) -- Canada plans to sell a stake in the Trans Mountain oil pipeline to individual indigenous communities through a special-purpose vehicle, allowing the government to balance competing groups’ requests to own a piece of the controversial project.
The groups will be provided with access to capital so they don’t have to risk their own money to participate, according to a letter from Deputy Prime Minister Chrystia Freeland’s office seen by Bloomberg. The communities’ equity interest in Trans Mountain will provide them with cash flows and allow them to jointly exercise governing rights, according to the letter, which was dated Aug. 2.
The plan partly clears up how Prime Minister Justin Trudeau’s government will handle the sale of the pipeline that his administration saved from cancellation by buying it for C$4.5 billion ($3.3 billion) in 2018. While some indigenous groups have opposed the Trans Mountain expansion, which crosses through many of their territories, others have banded together into bidding groups to pursue stakes in the pipeline to generate revenue for their communities.
Indigenous groups that take part in the special-purpose vehicle won’t be excluded from participating in later rounds offering additional equity in Trans Mountain, the letter said. The government will soon begin discussions with indigenous groups along the pipeline’s route and shipping corridor, according to the letter.
“The Government of Canada first announced its intention to explore the possibility of Indigenous economic participation in the Trans Mountain Expansion Project in March 2019,” Katherine Cuplinskas, a spokesperson for Freeland, said in an emailed statement. “The letter sent last week represents the next step in the federal government’s commitment that Indigenous communities share in the economic benefits derived from Trans Mountain.”
The Trans Mountain expansion project was first proposed about a decade ago, back when the pipeline was owned by Kinder Morgan Inc. The project twins an existing pipeline running from Edmonton to a shipping hub near Vancouver, nearly tripling the conduit’s capacity from 300,000 barrels a day to 890,000 barrels a day.
Canada’s oil-sands industry lauded the project as a key new outlet for its crude and a way to ship more production to Asia, reducing its dependence on US markets. But a series of regulatory and legal setbacks, driven by environmental and indigenous groups, prompted the government to step in and buy the line after Kinder Morgan threatened to cancel the project.
Even after the government purchase, the cost of the Trans Mountain expansion project has more than quadrupled to C$30.9 billion amid repeated delays and construction setbacks. While some of the swelling costs may be passed onto the oil producers who will use the line, analysts say taxpayers also may be left to bear a hefty writedown on the project.
The government has long floated the possibility of selling some of the project to indigenous groups, a politically expedient move in keeping with Canada’s push to reconcile with its colonial past. Several groups representing indigenous communities emerged to seek ownership of the system.
Among those groups are Project Reconciliation, which is seeking a 100% stake in the line. Another, the Western Indigenous Pipeline Group, is a 50-50 partnership between Pembina Pipeline Corp. and many of the British Columbia communities along the line.
Due to the cost increases, Pembina is no longer seeking a 50% stake in the pipeline, but rather a 20% to 30% stake, Chief Executive Officer Scott Burrows said on an earnings call on Friday.
“When we do think about that asset in light of a larger potential gross investment size, we do think about keeping things largely similar from Pembina’s net investment,” he said. “So when you talk about sort of a smaller than 50% investment, I would say that’s where our heads are at.”
--With assistance from Brian Platt.
Bloomberg Businessweek
First Nations oil and gas sector blasts Guilbeault for lack of consultation on new subsidies framework
Local Journalism Initiative
Wed, August 9, 2023
Stephen Buffalo, president and CEO of the Indian Resource Council of Canada (IRC), is not applauding the federal government’s recent announcement that subsidies will continue to flow to First Nations to support their economic participation in fossil fuel activities.
The continuation of those particular subsidies was one of six exemptions outlined in Canada’s framework for eliminating inefficient fossil fuel subsidies. The framework was released July 24 by Environment and Climate Change Minister Steven Guilbeault. Also identified as an exemption are subsidies that provide an essential energy service to remote communities.
The framework is in response to Canada’s 2009 commitment to phase out inefficient fossil fuel subsidies as part of a commitment with other G20 countries. Such subsidies, says the 2009 G20 communique, “encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.”
Starting in 2028, the federal government will eliminate tax breaks, financing and loan guarantees for fossil fuel projects that don’t reduce emissions.
Indigenous economic participation will continue to receive federal program and expenditure support (or measures), says the framework, as long as “the main beneficiary of the funding or measures are Indigenous peoples.”
The announcement allowing those continued subsidies “scared me more than anything,” said Buffalo. “You never know what the federal government's going to do and, for the most part, they're doing this without consultation with First Nations.”
IRC was founded in 1987 by chiefs representing oil and gas producing First Nations. Its mandate is to advocate for federal policies that improve and increase economic development opportunities for its 130-plus members. While the organization has representation from across the country, the majority of its members are located in western Canada. The organization is headquartered at Tsuut’ina Nation in southern Alberta.
The government’s actions contradict the United Nations Declaration on the Rights of Indigenous Peoples and Canada’s own United Nations Declaration Act (UNDA), which mandates Canada to consult and cooperate with Indigenous peoples, said Buffalo.
UNDA also commits the federal government to review all new legislation through an Indigenous lens.
“(This framework) is just being put before us and then that's the fear, because the government is really trying to implement policies without talking to the actual grassroots people,” said Buffalo. “It just seems we keep having these arguments over and over again.”
Larry Kaida, an IRC advisor and assistant to Buffalo, says the framework is an example of Canada’s continued patriarchal approach to interacting with First Nations.
“If asked, we could have told them that when they punish the fossil fuel industry, there will be ripple effects on Indigenous folks who have many joint ventures with industry,” said Kaida.
Buffalo points out that First Nations now have “better relationships with industry more than ever” and are benefitting beyond the usual opportunities of employment, spinoff companies, and contracts.
Deeper relationships have been realized in equity ownership in numerous oil and gas projects, as well as ownership in infrastructure, such as pipelines, he says.
At the end of July, the Alberta Indigenous Opportunities Corporation (AIOC) announced a loan guarantee of $103 million to Northern Lakeland Indigenous Alliance (consisting of Buffalo Lake and Kikino Métis settlements and Saddle Lake Cree, Heart Lake and Whitefish Lake First Nations) to acquire approximately 43 per cent interest in Access NGL Pipeline System operated by Wolf Midstream Canada.
“(These are) revenue streams that nations never had before…This is self-sustaining,” said Buffalo. “Those are going to get some sort of an impact,” from the framework.
Both Buffalo and Kaida also express concern with the lack of details that accompanied Guilbeault’s announcement.
“The hard part is what's the real action behind a lot of these things? They're trying to make it sound like everything's going to be good when it's going to be very difficult to access certain things,” said Buffalo.
For instance, he says, it is unclear if allowing subsidies that benefit Indigenous economic participation will give Indigenous-led groups an upper hand in ownership of the Trans Mountain Pipeline expansion. The federal government bought Trans Mountain in 2018 for $4.5 billion with the intention of selling it.
A number of First Nations and Métis-led groups have expressed interest in purchasing Trans Mountain pipeline, which is presently undergoing a 1,150-km expansion. The Trans Mountain pipeline is Canada's only pipeline system that carries oil from Alberta to the West Coast.
“We have to pursue these opportunities to meet the needs of our people and to meet the needs that the federal government doesn't want to touch,” said Buffalo.
If Canada is serious about economic opportunities for Indigenous peoples, he adds, then the federal government would consider establishing something similar to AIOC, which recently doubled its commitment to $2 billion to backstop loan guarantees for Indigenous-led projects in natural resources and other areas like agriculture in Alberta.
“I know there's a few of us that are planting the seeds of that type of…initiative or policy that the federal government can do,” said Buffalo.
Much of Canada’s support to the fossil fuel sector comes from Crown corporations and commercially viable loans. These are not included in the new framework.
Kaida is concerned about the future of the Site Rehabilitation Program, which saw federal funding of $1.72 billion funneled through the provinces through to the oil field service contractors to undertake well, pipeline, and oil and gas site closure and reclamation work at abandoned and orphaned well sites.
“Some in Ottawa still believe this was a subsidy. We saw this as land stewardship and job creation. If industry benefited, so be it,” he said.
Buffalo said the program had First Nations “in the driver’s seat,” able to set priorities and direct companies to where they wanted land reclaimed. Approximately $131 million was spent by First Nations for work on abandoned well sites and to clean up reserve lands.
“Yes, you saw industry see some benefit as it took liability off of their balance sheet, but I think the most important thing is that the First Nations were cleaning the land themselves,” he said.
As First Nations populations are growing, more land is needed, Buffalo says, and the rehabilitation program provides for some of that additional land.
Kaida is concerned that subsidies earmarked for Indigenous projects and for remote communities that still rely on diesel and gas to power their generators will end up going to bureaucracy “as they normally do. Very little trickle down to those that need it the most.”
Buffalo views the new framework as Canada’s move to get rid of the oil and gas sector.
“No one can tell First Nations about environmentalism and protection of Mother Earth. We know. But in the same sense, we have to find ways to balance protecting Mother Earth and yet having an opportunity to make our lives better as First Nations,” said Buffalo.
Windspeaker.com
By Shari Narine, Local Journalism Initiative Reporter, Windspeaker.com, Windspeaker.com
Local Journalism Initiative
Wed, August 9, 2023
Stephen Buffalo, president and CEO of the Indian Resource Council of Canada (IRC), is not applauding the federal government’s recent announcement that subsidies will continue to flow to First Nations to support their economic participation in fossil fuel activities.
The continuation of those particular subsidies was one of six exemptions outlined in Canada’s framework for eliminating inefficient fossil fuel subsidies. The framework was released July 24 by Environment and Climate Change Minister Steven Guilbeault. Also identified as an exemption are subsidies that provide an essential energy service to remote communities.
The framework is in response to Canada’s 2009 commitment to phase out inefficient fossil fuel subsidies as part of a commitment with other G20 countries. Such subsidies, says the 2009 G20 communique, “encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.”
Starting in 2028, the federal government will eliminate tax breaks, financing and loan guarantees for fossil fuel projects that don’t reduce emissions.
Indigenous economic participation will continue to receive federal program and expenditure support (or measures), says the framework, as long as “the main beneficiary of the funding or measures are Indigenous peoples.”
The announcement allowing those continued subsidies “scared me more than anything,” said Buffalo. “You never know what the federal government's going to do and, for the most part, they're doing this without consultation with First Nations.”
IRC was founded in 1987 by chiefs representing oil and gas producing First Nations. Its mandate is to advocate for federal policies that improve and increase economic development opportunities for its 130-plus members. While the organization has representation from across the country, the majority of its members are located in western Canada. The organization is headquartered at Tsuut’ina Nation in southern Alberta.
The government’s actions contradict the United Nations Declaration on the Rights of Indigenous Peoples and Canada’s own United Nations Declaration Act (UNDA), which mandates Canada to consult and cooperate with Indigenous peoples, said Buffalo.
UNDA also commits the federal government to review all new legislation through an Indigenous lens.
“(This framework) is just being put before us and then that's the fear, because the government is really trying to implement policies without talking to the actual grassroots people,” said Buffalo. “It just seems we keep having these arguments over and over again.”
Larry Kaida, an IRC advisor and assistant to Buffalo, says the framework is an example of Canada’s continued patriarchal approach to interacting with First Nations.
“If asked, we could have told them that when they punish the fossil fuel industry, there will be ripple effects on Indigenous folks who have many joint ventures with industry,” said Kaida.
Buffalo points out that First Nations now have “better relationships with industry more than ever” and are benefitting beyond the usual opportunities of employment, spinoff companies, and contracts.
Deeper relationships have been realized in equity ownership in numerous oil and gas projects, as well as ownership in infrastructure, such as pipelines, he says.
At the end of July, the Alberta Indigenous Opportunities Corporation (AIOC) announced a loan guarantee of $103 million to Northern Lakeland Indigenous Alliance (consisting of Buffalo Lake and Kikino Métis settlements and Saddle Lake Cree, Heart Lake and Whitefish Lake First Nations) to acquire approximately 43 per cent interest in Access NGL Pipeline System operated by Wolf Midstream Canada.
“(These are) revenue streams that nations never had before…This is self-sustaining,” said Buffalo. “Those are going to get some sort of an impact,” from the framework.
Both Buffalo and Kaida also express concern with the lack of details that accompanied Guilbeault’s announcement.
“The hard part is what's the real action behind a lot of these things? They're trying to make it sound like everything's going to be good when it's going to be very difficult to access certain things,” said Buffalo.
For instance, he says, it is unclear if allowing subsidies that benefit Indigenous economic participation will give Indigenous-led groups an upper hand in ownership of the Trans Mountain Pipeline expansion. The federal government bought Trans Mountain in 2018 for $4.5 billion with the intention of selling it.
A number of First Nations and Métis-led groups have expressed interest in purchasing Trans Mountain pipeline, which is presently undergoing a 1,150-km expansion. The Trans Mountain pipeline is Canada's only pipeline system that carries oil from Alberta to the West Coast.
“We have to pursue these opportunities to meet the needs of our people and to meet the needs that the federal government doesn't want to touch,” said Buffalo.
If Canada is serious about economic opportunities for Indigenous peoples, he adds, then the federal government would consider establishing something similar to AIOC, which recently doubled its commitment to $2 billion to backstop loan guarantees for Indigenous-led projects in natural resources and other areas like agriculture in Alberta.
“I know there's a few of us that are planting the seeds of that type of…initiative or policy that the federal government can do,” said Buffalo.
Much of Canada’s support to the fossil fuel sector comes from Crown corporations and commercially viable loans. These are not included in the new framework.
Kaida is concerned about the future of the Site Rehabilitation Program, which saw federal funding of $1.72 billion funneled through the provinces through to the oil field service contractors to undertake well, pipeline, and oil and gas site closure and reclamation work at abandoned and orphaned well sites.
“Some in Ottawa still believe this was a subsidy. We saw this as land stewardship and job creation. If industry benefited, so be it,” he said.
Buffalo said the program had First Nations “in the driver’s seat,” able to set priorities and direct companies to where they wanted land reclaimed. Approximately $131 million was spent by First Nations for work on abandoned well sites and to clean up reserve lands.
“Yes, you saw industry see some benefit as it took liability off of their balance sheet, but I think the most important thing is that the First Nations were cleaning the land themselves,” he said.
As First Nations populations are growing, more land is needed, Buffalo says, and the rehabilitation program provides for some of that additional land.
Kaida is concerned that subsidies earmarked for Indigenous projects and for remote communities that still rely on diesel and gas to power their generators will end up going to bureaucracy “as they normally do. Very little trickle down to those that need it the most.”
Buffalo views the new framework as Canada’s move to get rid of the oil and gas sector.
“No one can tell First Nations about environmentalism and protection of Mother Earth. We know. But in the same sense, we have to find ways to balance protecting Mother Earth and yet having an opportunity to make our lives better as First Nations,” said Buffalo.
Windspeaker.com
By Shari Narine, Local Journalism Initiative Reporter, Windspeaker.com, Windspeaker.com
No comments:
Post a Comment