Equity stake in the pipeline is key for landowners, Indigenous and non-Indigenous

“It is time for industry and government to recognize private landowners’ rights to protect and manage their own lands.”

By Dale Swampy

Over the past decade, Canada has faced more challenges against economically crucial pipeline development than any country in the world.

Canadians who are not involved in the oil and gas industry tend to believe there is no real need for the TransMountain expansion project (TMX).

However, if you speak directly to affected stakeholders of this pipeline — including Indigenous leaders, government representatives, leaders of the oil and gas industry, and private landowners — most of them will tell you that building TMX is not only good for Canada, but good for Indigenous communities.

They will also tell you that they want two things from TMX: to maximize their benefits from the project, and to maintain some level of control over the project to ensure that integrity issues and environmental protections are properly dealt with and maintained.

“In order for landowners and Indigenous leaders to maintain a reasonable level of control, they will need to own part of the project.”

Government officials will count on regulations to maintain their need for control. But in order for industry leaders, landowners and Indigenous leaders to maintain a reasonable level of control, they will need to own part of the project.

I believe the only way to successfully proceed with the construction and operation of TMX is to have all three of these stakeholders involved in owning the pipe. It may seem like an exercise in futility to suggest that a model can be created that will satisfy all stakeholders, but leaders like those within the National Coalition of Chiefs (NCC) not only believe it is possible, they are also willing to lead the successful implementation of the final model.

Indigenous leaders and private landowners have similar interests: they both feel they have an inherent responsibility for the long-term safe-keeping of their lands. So, when a pipeline or other major infrastructure is developed on their lands and territory, they feel helpless when all they get from the project is a one-time payment and they have to stand by for the rest of the 30 years of operations without a say in how the project functions.

Ownership in the project will allow them to have a say and to better understand how the project operates and protects all of our lands.

In order to acquire ownership, Indigenous communities and private landowners need a helping hand. Most do not have the 30 or 40 percent cash down-payment needed to finance their equity share in the project. This is where government and private industry can provide solid financial consideration. The Northern Gateway pipeline model showed us how major oil producers and major pipeline companies, like Enbridge, can work together to arrange the financing for Indigenous communities to purchase 33 percent of the Northern Gateway Pipeline.

In the case of TMX, major oil producers can come together with a major pipeline company, like Kinder Morgan, to develop a financing package that will enable the Indigenous communities to own as much as 33 to 50 percent of TMX while the remaining shares will be owned by the landowners, oil producers and the major pipeline proponent. The financing package will include equity grants from both the oil producers and contributions from Alberta’s Indigenous Opportunity Corporation.

Share ownership for Indigenous communities will be allotted based on their levels of impact. For example, the share offering can be divided into four groups or levels. Level 1 will be given the largest proportion of ownership. This level will be offered to First Nations and Métis communities whose lands are crossed by the pipeline. Level 2 will be given to those communities whose reserves and lands lie within an 80-kilometre radius of the pipeline route. Level 3 shares will be offered to First Nations and Métis communities within Alberta and B.C., and the final Level 4 shares will be offered to First Nations and Métis communities who wish to participate from across Canada.

Indigenous communities that participate can be involved in a newly established TMX Indigenous community ownership group. Annual meetings will be scheduled to discuss the operation of the pipeline along with other initiatives that may include an annual community investment fund, and annual contributions for community training and employment. The proposed funding for these types of initiatives on the Northern Gateway project was $400 million over 30 years. Other funds that the Indigenous ownership group could manage over the lifetime of the project may include a marine and coastal environmental protection plan, and a management training program that will ensure that one or more Indigenous community members obtain management level positions within TMX, including CEO.

A similar community group could be established for private landowners along the TMX corridor. It is time for industry and government to recognize private landowners’ rights to protect and manage their own lands.

Dale Swampy is president of the Calgary-based National Coalition of Chiefs and a member of the Samson Cree Nation. A University of Alberta economics graduate, he has worked in the oil and gas industry and with First Nations on economic development initiatives his entire career.

Published in PIPELINE OBSERVER FALL 2019