OPINION | Indigenous ownership could be the key to reconciling oil industry and protesters
Avoiding more standoffs must be part of any economic recovery plan
This column is an opinion from Dr. Michelle Corfield, Jennifer Turner, Dr. Harrie Vredenburg and Liana Wolf Leg, all with Project Reconciliation.
Canada's energy industry, our largest export industry, has taken a serious hit during the COVID-19 pandemic due to the demand destruction caused by the worldwide lockdown combined with the Russia-Saudi Arabia oil price war.
Should Ottawa reach out with more help to the industry, beyond the programs that have thus far been made available? Should climate/environmental activists and their Indigenous community partners calling to shut down the industry win the day?
Or is there, perhaps, a third way?
Innovation is what Canada urgently needs to reconcile the oil and environmental/social justice dilemma. We need social innovation and business model innovation in the industry, as well as technical innovation to address emissions.
Social justice for Indigenous peoples, combined with transitioning to the low-carbon global energy future while monetizing Canada's natural oil resource wealth, is the way forward.
Addressing the root causes and avoiding a ratcheting up of the acrimonious environmental activist-Indigenous pipeline protest standoffs of earlier this year must be part of any economic recovery plan.
Prosperity linked to trade
Canada's prosperity — and our growing government assistance programs — is inextricably tied to international trade.
We are a country endowed with an abundance of natural resources but have a small domestic market. Canada is the world's fourth largest oil exporter. The industry is Canada's largest exporter (over 20 per cent of Canada's exports, followed by the auto industry at under 15 per cent), generating jobs and government tax revenues.
We believe that the most productive and cost-effective thing that the federal government can do to keep generating that revenue as we pivot to a new energy reality is to make a majority interest in the Trans Mountain pipeline available to a coalition of western Canadian First Nations.
Indigenous communities in Western Canada have been organizing to acquire 51 per cent of the Trans Mountain pipeline from the federal government.
Their objectives are:
- To give First Nations a real voice in major projects on their traditional territories to ensure that the highest environmental standards and Indigenous cultural protection measures are applied.
- To provide First Nations with income independent of government for current and future generations.
- To play a major role in the global energy transition to a low-carbon economy.
Discussions have been held with financial institutions, with the result that an Indigenous acquisition would be financed through a syndicated bond issue led by one of Canada's largest banks. The existing pipeline assets and long-term pipeline shipping contracts with Canada's largest oil companies would serve as collateral. The financing would be "nonrecourse," meaning that it is secured by the pledge of the collateral only.
Pipeline revenue would fund energy transition
It is proposed that part of the pipeline income would be paid out as regular disbursements to Indigenous communities, while most of the pipeline income would go to an Indigenous sovereign wealth fund. This fund would be professionally managed and invested in a portfolio focused on renewables and low-carbon global energy transition infrastructure projects and assets.
Many such infrastructure projects in Canada and abroad are situated on or adjacent to Indigenous traditional territories. The Indigenous sovereign wealth fund would be in a favourable position as financer of choice for these projects. The concept of such an Indigenous fund has already attracted interest around the world.
The fund would effectively repurpose the natural oil wealth of the traditional territories of Western Canada's Indigenous peoples to financial wealth in the low-carbon global economy. This would provide income, independent of government, for First Nation communities for many generations into the future.
What's driving this movement to acquire a majority stake in Trans Mountain is that Indigenous communities want a seat at the decision-making table to ensure that protection of the rivers, streams and the Salish Sea, especially of the salmon and the whales, is paramount.
Many marine species, including the southern resident killer whale, sacred to many coastal Indigenous peoples, are impacted by underwater vessel noise. Underwater noise pollution can reduce their ability to find prey, effectively navigate and communicate with each other, while also creating stress.
Discussions are now underway for an Indigenous coalition to become a partner in a venture to build and operate high-tech, low-noise tankers, fuelled by cleaner burning liquefied natural gas (LNG) designed to decrease underwater noise, which will help in the recovery of Canada's endangered, iconic whale populations.
The ships will reduce noise by up to 90 per cent and greenhouse gas emissions by 20 per cent.
Using cutting-edge science and Indigenous traditional marine knowledge, these ships will sail safely through British Columbia coastal waters and transport commodities to Asia.
Canada can lead the world
As part of acquiring a majority stake of Trans Mountain, Indigenous communities plan to implement the First Nations Fisheries Council's Marine and Environmental Response Program. It would be used to train and certify marine and environmental response workers in coastal First Nations communities, and to connect them to employment opportunities across the marine sector.
First Nations have an important environmental role to play, from operating the tugboats that accompany tankers through coastal waters, to monitoring and maintaining high-tech systems that ensure rigorous marine safety.
Indigenous ownership and decision-making throughout the value chain helps to weave Indigenous reconciliation further into Canadian society.
Today, Canada can lead the world in the highest environmental, social and governance (ESG) oil exports. Indigenous ownership of the Trans Mountain pipeline would be an important first step in reaching that goal.