Industry and government are getting an education about the tallest hurdle in the way of Canadian plans for new Asian energy export channels: aboriginal communities that occupy or claim vast tracts of northern Alberta and British Columbia (BC).
The lessons are being taught by emerging commercial relationships and parallel regulatory cases on oil and liquefied natural gas (LNG).
Native relations are central elements of the Northern Gateway oil pipeline scheme sponsored by Enbridge Inc., now under scrutiny in prolonged hearings across both provinces by a “joint review panel” of the National Energy Board (NEB) and Canadian Environmental Assessment Agency. That extended process contrasts with the quick trip through the NEB for BC LNG Export Co-operative LLC, which just received a 20-year export permit (see related story).
Northern reality is turning out to be far more complicated than the David-and-Goliath caricature, drawn by Canadian and U.S. environmental protest publicity, of innocent aboriginal bystanders or victims single-mindedly standing up against corporate energy power.
The authentic picture includes communities simultaneously challenging industrial projects to satisfy high expectations and preparing to participate in the developments that emerge from the cases. A case in point is the Haisla Nation, which is leasing land near Kitimat for one large LNG export project and participating as 50% owner in the smaller cooperative project which just received its export permit.
The Haisla Nation has stepped forward to clarify the Aboriginal stance as the pivotal native community of the grand economic design’s designated energy export port, Kitimat on the north Pacific coast of BC. In an open letter circulated after the January opening of the Gateway hearings in Kitimat, Haisla Chief Councilor Ellis Ross said the reception industry receives depends on the type of project proposed.
At the hearings, Ross wrote, “The views from every Haisla speaker were consistent and clear: We absolutely do not want Gateway or its huge oil tankers in our territory. Different routes and options are available for the export of Alberta oil.”
But that negative take on Gateway must not be mistaken for a message that Canadian natives dogmatically oppose northern industrialization or even all tankers, Ellis added. “We agree with Prime Minister Stephen Harper that diversifying our energy exports is in Canada’s national interest. Our belief is that the export of liquefied natural gas can offer Gateway-like economic benefits that can be realized much more quickly and with considerably less risk than the Enbridge proposal.”
Ellis pointed to native community facts that have been obscured by environmental protest against the spread of fossil fuel development across northern BC and Alberta.
The Haisla granted moral support and a coastal property lease for a new LNG export tanker terminal to KM LNG, a C$4.5-billion (U.S. dollar at par) project by Apache Canada, EOG Resources Canada and Encana Corp., which is negotiating sales contracts in China, Japan and South Korea after obtaining a 20-year license from the NEB late last fall for exports of up to 1.4 Bcf/d of LNG.
Partly with proceeds of deals with KM LNG the Haisla are also part-owners, partnered with LNG Partners LLC of Houston, of the BC LNG Export Co-operative. Also known as Douglas Channel Gas Services after the fjord that connects Kitimat to the open Pacific Ocean, the half-aboriginal enterprise plans to build a C$600 million entry by 2014 into the global LNG tanker trade at an initial rate of 250 MMcf/d.
LNG is a “much more positive” environmental story than oil, Ellis wrote. “In the unlikely event of a leak in an LNG pipeline, or an incident loading LNG onto a carrier, or in a collision between an LNG carrier and another vessel, or one of these vessels running aground in the Douglas Channel, we would see the LNG disperse into the atmosphere. There would be no cargo of heavy oil saturating the land, despoiling the beaches and sea bed, killing thousands of fish and wildlife or staining our territory for generations to come.”
But environmental protection is not the only factor in the Canadian energy export cases. From the perspective on the Pacific Coast in Kitimat, Ellis described LNG and oil as competitors over limited room for industry. “Royal Dutch Shell plc, the world’s largest LNG handler, is also investigating a Douglas Channel facility that may be a C$10 billion-plus investment. Many other energy companies have met with us to express their interest in additional LNG projects.”
Ellis wrote, “The Douglas Channel only has a few sites where a major export terminal can be built. The area has limited infrastructure, power, pipeline routes and human resources to build these mega projects. Building an oil terminal in the channel would displace the opportunity to build an additional LNG terminal.”
In northern Alberta, the Aboriginal perspective on industrialization is likewise a matter of choosing the most beneficial projects rather than opposing all development on principle.
At Gateway hearings in Edmonton, the Driftpile Cree First Nation demanded meaningful consultation and revenue-sharing for its reserve on the southern shore of Lesser Slave Lake. After testifying before the review panel, Chief Rose Laboucan made it plain that the community is open for business by making a joint announcement with PTI Group Inc., a supplier of industrial accommodation and catering from Alberta to Texas.
The company and the native community unveiled an “exclusive business relationship and strategic alliance agreement” on work camp development that includes native training, jobs and contracting. Laboucan issued a statement saying that “employment and economic development are priorities” and predicting that “opportunities will be created for our membership.”
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