Kinder Morgan may still offer pipeline ownership to Indigenous groups
CEO says he tried to strike a deal for an equity stake in the Trans Mountain expansion project
The chief executive of Kinder Morgan Canada said Wednesday he tried behind the scenes to allow Indigenous groups in British Columbia to have an ownership stake in a new multibillion-dollar oil export pipeline, but such a deal never came together.
Ian Anderson was discussing the company's proposed Trans Mountain expansion project, which would transport oil and other products from Edmonton to Vancouver. Construction is slated to begin in September, although some Indigenous and political leaders want to delay the project.
When we get Indigenous communities totally on a project and part of it, the last thing we are going to do is protest against ourselves.- JP Gladu, Canadian Council for Aboriginal Business
Some Indigenous leaders have pushed for an ownership stake in major projects as one way of benefiting economically from oil and gas development, something Anderson said he always considered.
"I worked for a long time quietly to try and assemble support for that on this project and it didn't come to fruition. I've never ruled it out," said Anderson, during a panel discussion at the Global Petroleum Show in Calgary that focused on the relationship between Indigenous communities and the energy industry.
"We're a private company now, our stock is traded. I would welcome the opportunity to have some First Nation investment in that."
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Anderson did not explain the reason why Indigenous groups weren't able to strike a deal for an ownership stake, although he did say those communities lack the wealth needed to invest in multibillion-dollar projects. Anderson did not speak to journalists before or after the speaking engagement.
"For that kind of ownership and for that kind of meaningful investment in resource development, the nations need capacity," he said to the crowd.
Anderson said some Indigenous groups in Alberta began generating wealth decades ago by getting jobs and contracts in the oil and gas sector, and now some groups, like the Fort McKay First Nation near Fort McMurray, have the financial resources to invest in energy development.
"That's what it comes down to is where [does] the financial capacity come from in order to make those kind of investments in the projects that we are undertaking," said Anderson.
Value in an equity stake
A federal government representative at the event said Ottawa would consider providing Indigenous groups with loan guarantees or other financial assistance if there is interest in a pipeline-ownership stake.
"If there is an interest by Indigenous communities and groups to invest that way, in terms of taking a stake, I think that's one way to ... get an economic benefit from development that occurs near or on their land," said Philip Jennings, associate deputy minister at Natural Resources Canada.
The economic benefits of the oil and gas sector can't be overlooked, he said, just like environmental and Indigenous concerns.
"In Alberta, we've essentially created an entire Indigenous middle class out of the development that has happened there," said Jennings.
The federal government is setting up a pair of Indigenous advisory monitoring committees to oversee the Trans Mountain expansion pipeline and Enbridge's Line 3 replacement project.
In Alberta, we've essentially created an entire Indigenous middle class out of the development that has happened there.- Philip Jennings, associate deputy minister at Natural Resources Canada
An equity stake in a pipeline could convince more Indigenous communities to support the project.
Opponents want to stop pipeline
While some groups along the route of the proposed pipeline support the project, others oppose it, including B.C.'s grand chief, who said this month that, "The Trans Mountain pipeline expansion project will never see the light of day."
Some Indigenous groups are concerned about the risks of an oil spill and how that could harm their environment and threaten their ability to practise traditional customs.
The Squamish Nation along with the Tsleil-Waututh Nation and Coldwater Band in B.C. have filed court actions challenging the pipeline's approval.
Anderson said his company has "momentum" in getting more and more Indigenous communities on side with the project, but admits it isn't easy and there are complex situations with each group.
"I can't tell you the number of times I've had conversations with chiefs who are my friends and we debate, we argue, and we fight, and like with your wife or your husband or your partner, not every fight ends up in divorce," he said.
"You solve it, you work through it, you come back the next day and find different solutions. And that has to be a pursuit we all have to recognize."
Indigenous ownership in a pipeline is not unheard of. Previously, 31 First Nations communities formed the Aboriginal Equity Partners group, and collectively owned a 33 per cent stake in Enbridge's failed Northern Gateway pipeline project.