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Seeking a social license Canadian government, pipeline companies, LNG proponents short on time to sell megaproject economic benefits to aboriginal communities Gary Park For Petroleum News
The Canadian petroleum industry enters 2014 faced with needing to make a complete and credible about-face in its dealings with First Nations.
Failure to act could sidetrack Enbridge’s Northern Gateway project beyond the point where it can remain economically viable.
And, unless industry leaders and governments can persuade the bulk of aboriginal communities that they stand to benefit from energy megaprojects without disruption to their lifestyles, Kinder Morgan’s Trans Mountain expansion, TransCanada’s Energy East push to Canada’s Atlantic coast and any number of LNG export plans could be in trouble.
When a federal government Joint Review Panel conditionally endorsed Northern Gateway on Dec. 18 it was no ordinary approval.
“It is the most important regulatory decision we have seen in modern times in this country,” said Jim Prentice, a former senior cabinet minister under Prime Minister Stephen Harper and now a leading bank executive. “That’s because the issues associated with West Coast access are so important to our future.”
Diana McQueen, Alberta’s newly appointed energy minister, welcomed the Northern Gateway report as “good for Alberta, British Columbia and the entire country” by setting the stage for accessing offshore markets.
Enbridge’s efforts saluted To the delight of some and the surprise of many, the JRP saluted Enbridge’s efforts to tackle the key challenges facing Northern Gateway, notably the preparation of a marine spill response plan and its engagement with First Nations.
It said that in some cases Enbridge went beyond what was required under present legislation. But, in the eyes of most Native leaders, that was nowhere near far enough and, for many of them, nothing Enbridge can offer will ever win them over.
The options before the federal cabinet are to accept or reject the JRP’s 209 conditions, or, as it did with the Mackenzie Gas Project ask the National Energy Board to make additions or deletions to the list.
But Enbridge and the industry have to assume that the cabinet will reach a decision within the required 180 days of the JRP’s report being made public — in other words, by mid-June.
Prentice said the JRP has clearly laid out a path for the Canadian government and Enbridge to “build a social license” for Northern Gateway, notably ensuring that First Nations “are meaningful participants in the economic benefits.
Issue sidestepped What the JRP sidestepped was an overriding issue — the lack of progress on aboriginal land rights and title in British Columbia.
Enbridge Chief Executive Officer Al Monaco has made no attempt to downplay the realities, observing that “the fact people see Gateway as controversial is not necessarily a bad thing. It has really helped the landscape because people understand what is at stake.”
His pledge to make an immediate start on building a new level of trust with First Nations came on the heels of a recent survey by the University of Calgary School of Public Policy that showed how fast the cloud of aboriginal opposition to Canada’s energy megaprojects is accumulating.
The concern among governments who count on the oil and natural gas sector for a large percentage of their revenues and the petroleum industry, which urgently needs to post a victory in the struggle to open new markets, is whether they have left it too late to reach an accommodation with First Nations.
The university survey, which canvassed the views of 300 Natives, showed 30 percent have “zero” trust in oil and gas companies, energy executives and the Canadian Association of Petroleum Producers, CAPP.
Study co-author Andre Turcotte said a “lot of resources ... have been put into trying to change the image of the industry,” but the results “show that whatever the industry is doing is not really working.”
The “zero trust” number means that aboriginal communities are “not ready to engage in a conversation, so it’s a real obstacle to start a dialogue,” Turcotte.
He said the obstacle faced by the industry is “inevitable” given that where future energy production will occur and where aboriginals live “is a fact you can’t overcome.”
However, Turcotte said aboriginals are prepared to accept resource development and pipelines being near their communities when the proposals are linked to benefits.
The economic benefits are “where you start the conversation,” he said.
Blunt reception But Ann Marie Sam, a councillor with the Nak’azdli First Nation, a member of the Yinka Dene Alliance in northwestern British Columbia, gave a blunt reception to the JRP verdict, underscoring that some aboriginals are not willing to talk under any circumstances.
“The message we want to send out from the Yinka Dene is that the Northern Gateway pipeline is banned from our territories,” she declared.
Gordon Christie, an associate professor of law and a First Nations legal expert at the University of British Columbia, said that view is shared by dozens of First Nations along the pipeline right of way, belief that the pipeline has “pretty far-reaching consequences.”
The burden on the Canadian government and Enbridge is “fairly onerous,” said Christie, questioning whether the government has enough time to meet the Supreme Court of Canada’s requirement for “meaningful consultation.”
Merie Alexander, an aboriginal law specialist the Vancouver firm of Gowlings, said the deep distrust within First Nations over projects like Northern Gateway could also “create a movement” against Kinder Morgan’s plan to triple capacity on its Trans Mountain system to Vancouver and Washington state.
Ellis Ross, chief councillor of the Haisla Nation in the Kitimat area, said mitigation will not satisfy the concerns above remediation in the event of an oil spill.
“We’ve already seen what happened in Prince William Sound” where the Exxon Valdez hit an undersea reef in 1989, dumping about 260,000 barrels of crude into the ocean.
“You cannot remediate an oil spill if it happens in a salt water environment,” he said.
CAPP understands Dave Collyer, president of CAPP, told the Globe and Mail his organization understands both the nuance and the need to move quickly.
He said a recent report by Douglas Eyford, who was appointed by Harper to gather First Nations’ views on resource development, presents some workable approaches for fostering inclusion of Native people in economic development.
“A lot of it is founded on relationships and trust and that has to be built over a period of time. One can certainly take the view that the foundation is not where we’d like it to be at the moment,” Collyer said.
“But I think it really does come down to the right people — government and industry and importantly First Nations — trying to see if there is a pragmatic way through this.”
Those looking for positives can find shreds in the LNG sector where the Haisla Nation is positioned to share ownership of the BC LNG Co-operative, the smallest of the province’s projects, while the Fort McKay First Nation in Alberta has profited from business partnerships in the oil sands.
Ross views the BC LNG deal as the first stepping stone to advance the Haisla from a depressed economy to permanent, skilled jobs, such as pipefitters, electricians and millwrights, in the Shell and Chevron LNG projects and the restructuring of the Rio Tinto aluminum smelter in the Kitimat area.
To that end he has organized an employment summit of First Nations, training institutes, governments, industries and labor unions to ensure the opportunities do not pass without long-term benefits.
He may have spoken for more than just the Haisla and provided industries with their best chance of closing the gulf with First Nations.
“If we don’t get enough people trained for jobs, the companies are going to have no choice but to look outside the region, outside the province and outside the country. We need a bigger strategy,” Ross said.
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