For the Canadian energy industry desperate to pump oil and natural gas through British Columbia, the single greatest obstacle has been the dozens of first nations fighting to ensure pipelines are never built.
Now, some of the leading figures in Canada’s aboriginal business community are offering a bridge across the province’s difficult political landscape. They have formed Eagle Spirit Energy Holdings Ltd., a company quietly working to create a first nations-owned energy corridor across northern B.C. that could serve as a physical line across the province to move natural gas, electricity and oil.
It’s an idea that promises first nations a much greater involvement in moving Canada’s energy, from large equity stakes in pipelines to major construction contracts, tugboat work, and engagement in spill response. In exchange, it promises the energy industry a possible route to the B.C. coast with less of the opposition that has confronted major pipelines in B.C., such as Enbridge Inc.’s Northern Gateway.
At a time when Canada faces seemingly intractable conflict between first nations and a resurgent resource sector, Eagle Spirit also presents a shimmer of hope that a third way may be possible. And the company has some deep-pocketed backers, including the Aquilini family, which among other assets, owns the Vancouver Canucks.
Eagle Spirit’s path, however, is unlikely to be easy, given the tremendous complexity of negotiating with dozens of first nations, and the huge cost and expertise required to build pipelines and power lines.
Still, the work has already begun. Eagle is in talks with coastal first nations on whose land export terminals would be built, in the belief that gaining approval from groups like the Lax Kw’alaams is the critical first step in assembling broader support. And because a corridor will require gaining title to what is now Crown land, Eagle is launching talks with government, beginning with B.C. this week, and Ottawa in the next few weeks.
If first nations can take an active role in owning and managing new pipelines, “they will be a lot more conducive to wanting to see projects develop in their territory,” said Calvin Helin, a well-known author and B.C. first nations leader who is Eagle Spirit’s president. That’s especially true “when they know they’re going to get a fair share of what’s going on and be in a position of reasonable stewardship and control,” he said.
Eagle is not the first attempt to directly involve first nations in moving oil. A small company called G Seven Generations Ltd. has sought to assemble native involvement in an $8.4-billion plan to build an oil export railway to Alaska. In addition, First Nations Limited Partnership was formed so more than a dozen first nations could jointly negotiate for benefits from Pacific Trails’ pipeline proposal to carry natural gas to Kitimat, B.C., for export.
What sets Eagle apart is the stature of its partners. They include Dave Tuccaro, a northern Alberta aboriginal entrepreneur who has built a nine-figure empire on the oil sands; Mr. Helin, a lawyer who is president of the Native Investment & Trade Association and author of Dances With Dependency; and Aquilini Development and Construction Inc., run by the prominent Vancouver family which owns the Canucks.
Aquilini is North America’s largest producer of blueberries and cranberries, and owns and operates 44 hotels. It has no pipeline experience. It is, however, an important B.C. property developer, and has in recent years struck deals with first nations to develop on native land. For example, Aquilini is in the midst of building roughly 2,000 homes on 125 acres of land belonging to the Tsleil-Waututh Nation, located on the north shore of Vancouver. Under the terms of the $1.8-billion development, the Tsleil-Waututh provide the land, while Aquilini takes care of financing and construction. Profits are split, with 60 per cent going to the Tsleil-Waututh.
A similar model could be used for pipelines, with first nations owning the corridor outright and taking large stakes in anything that runs through it.
“We’re not here to hand out. We’re here to employ,” said David Negrin, president of Aquilini Development and Construction. Although an oil pipeline is not a first priority – a natural gas pipeline may come before – it’s clear the movement of crude oil across B.C. is fundamental to Eagle’s plans.
“For Canada we believe there will be an [oil] pipeline. We believe it’s inevitable,” Mr. Negrin said.
But unlike Enbridge, which has offered 10-per-cent ownership to first nations, Eagle might offer 50 per cent, with the remainder potentially going to Aquilini.
“Every nation along that route will have jobs in monitoring the pipeline, building the pipeline, working at the refinery if we build one, working at the ports,” Mr. Negrin said. “There’s numerous, numerous jobs.”
But with no treaties, land claims among B.C. first nations often overlap, creating a barrier to working together. And finding the right line on the map for an energy corridor is unlikely to be easy.
“Corridors like that tend to not work very well, and the reason is that pipeline corridors are different from power transmission corridors, which are different from highways,” said Roger Harris, a Vancouver consultant who has substantial experience with first nations and pipeline issues.
Still, those behind Eagle say it has been built on the kind of model that stands to make first nations participants, rather than naysayers, in Canada’s resource economy.
“I see us owning pipeline projects. I see us owning oil sands. I see us owning refineries,” said Mr. Tuccaro, the entrepreneur who grew up in Fort Chipewyan, Alta. “I see us owning a lot more than what we have now.”