Providing coverage of Alaska and northern Canada's oil and gas industry
October 2018

Vol. 23, No.41 Week of October 14, 2018

Pipeline talks rebooted

Trudeau government starts new round of Trans Mtn talks with indigenous communities

Gary Park

for Petroleum News

The Canadian government won’t appeal a federal court decision that quashed its approval of the Trans Mountain pipeline expansion, opting instead to reopen negotiations with First Nations.

In the process it has insisted that those communities will not be able to block the project.

Natural Resources Minister Amarjeet Sohi said the government “understands that there might be groups that will still oppose this project” once the 22-week consultation period expires.

“That’s fine; that’s their right to do so,” he said. “But that does not mean that if we fulfill our constitutional obligation to consult, that those groups may have (the power) of veto.”

To put a stamp of credibility on the consultation process, the government hired former Supreme Court of Canada Justice Frank Iacobucci, known for his fairness, to oversee the discussions in concert with First Nations and Metis leaders.

Sohi said there is no “stop clock” on how long this new phase will take.

Squamish Nation Councilor Dustin Rivers Khelsilem said his community expects “an honorable consultation process that upholds our indigenous rights.”

He said the government of Prime Minister Justin Trudeau “tried to ram (the Trans Mountain) project through our territory with a predetermined outcome and this was not acceptable to the Squamish Nation or the court.”

Khelsilem said artificial timelines would not be acceptable to his community which faces the prospect of almost daily crude tankers sailing through its waters.

A spokesman for the Tsleil-Waututh Nation, that has a land claim covering the tanker terminal site, warned the Trudeau administration will end up back in court if it does not address his community’s demands to kill or relocate the project.

Chief Michael LeBourdais, of the Whispering Pines Clinton Indian Band near Kamloops, in central British Columbia, said the new consultation is “extraordinarily ambitious.”

Whispering Pines endorsed the pipeline and was the first to sign a benefits agreement on the pipeline, but LeBourdais said the consultation is an opportunity for all First Nations to push for improved benefits.

The appeal issue

Alberta Premier Rachel Notley was riled by the Trudeau government’s refusal to challenge the Federal Court of Appeal ruling.

“We understand that pursuing an appeal is a longer-term path towards a solution,” she said. “Nonetheless until that path succeeds ... their job is to keep all options open,” she said.

Notley said a “tremendous amount of work” has already been done on the consultation front, so it should be possible to conclude the next round in “a fairly timely way.”

She said Alberta wants to see construction resume next year “at some point. At this point we have to let the process play out.”

Notley noted that for now the oil industry and her government are losing millions of dollars a day from a shortage of pipeline capacity.

Jason Kennedy, leader of Alberta’s United Conservative Party, said Notley has failed to deliver on her promise to “hold Justin Trudeau’s feet to the fire,” including pushing for federal legislation to override the federal court.

Notley said the approval of the LNG Canada project in northern British Columbia suggests Alberta energy projects such as Trans Mountain are being held to a different standard.

“Albertans can be forgiven for being extremely frustrated with the way (the Canadian) federation is working right now because there is a high-level of jaw-dropping hypocrisy that is being demonstrated.”

Chris Bloomer, chief executive officer of the Canadian Energy Pipeline Association, said the extra consultation will “not be a short process,” despite the lack of pipeline capacity out of Alberta that has widened the gap between Brent crude and Western Canada Select prices to about US$40 a barrel.

Tim Pickering, chief investment officer with Auspice Capital, was unwilling to make any concessions to the Trudeau government, adding “I can’t think of any other situation in life or in business where you put no timeline in place and it turns out well.”

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