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Haisla Chief Councillor Ellis Ross is with the Haisla First Nation, which has embraced and profited from oil industry, particularly liquefied natural gas (LNG), which has already generated more than $60-million for the 1,500-person first nation. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)
Haisla Chief Councillor Ellis Ross is with the Haisla First Nation, which has embraced and profited from oil industry, particularly liquefied natural gas (LNG), which has already generated more than $60-million for the 1,500-person first nation. (John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail)

Oil-sands pipeline hits its highest hurdle Add to ...

The struggle to transport the harvest of Alberta’s vast oil sands enters a new arena this week – a village on the rugged British Columbia coast where the hopes of Canada’s biggest pipeline operator will meet a business-savvy first nation with little appetite for black gold.

Public vetting of Enbridge’s proposed $6.6-billion Northern Gateway oil-sands pipeline begins Tuesday. The arguments concerning aboriginal land rights and environmental impact promise a regulatory fight that could travel all the way to the Supreme Court of Canada.

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Reflecting the high stakes, the Harper government prepared a new warning, to be made public on Monday, that regulatory reviews for major energy projects should be accelerated and protected from interference by “radical environmental groups financed from the United States.”

Oil-sands operators have already watched one route for mass transport of their product, the proposed Keystone XL pipeline south to Texas, become bogged down in American domestic politics and opposition to a route over ecologically sensitive areas.

But as hearings begin for the alternative Northern Gateway route, over the mountains to the Pacific, the greatest danger to the pipeline project seems to be made in Canada.

The first review meetings will be hosted by the Haisla First Nation at its recently renovated Recreation Centre – as modern as any found in Vancouver, 700 kilometres to the south. The Haisla present a complex challenge to pipeline backer Enbridge: they are a business-canny first nation already active in resource industries, and they appear to be resolutely opposed to Gateway.

The constitutional question of aboriginal rights and title looms over the Gateway proceedings, above the contentious issues of market access for oil and the environment. Gateway would be built on B.C. land never ceded to Canada by treaty, and legal precedents appear to support the position of first nations against Gateway.

Opponents of the pipeline are being characterized in some circles as broadly anti-development, or as puppets of the U.S. environmental movement. But the Haisla have embraced and profited from industry, particularly liquefied natural gas (LNG), which has already generated more than $60-million for the 1,500-person first nation. The problem with Gateway, they say, isn’t the pipeline – it’s the oil it would carry. From Kitamaat Village and all along the proposed route, many first nations oppose the pipeline, asserting no amount of money can buy support because the environmental peril from oil spills is too great.

On the question of environment versus business, Haisla chief councillor Ellis Ross recalls a rupture of a small natural-gas pipeline that comes into his village from nearby Kitimat.

“It did rupture, and it was due to human error. We’re still here,” said Mr. Ross in an interview at the band office across from the recreation centre. “Everyone saw it, everyone heard it, and it was fixed. But compare that to crude oil. The priority for the natural-gas industry is safety No. 1. Crude oil, I don’t know, I don’t know what their priority is. I think it’s the almighty dollar. I can’t see Gateway being in the national interest.”

The question of national interest is the one to be weighed by the National Energy Board, the independent federal body that will vet Gateway and has approved almost every single application it has ever received. The NEB decision then would go to Prime Minister Stephen Harper’s cabinet.

Almost all of Canada’s oil exports go to the United States. Gateway would connect Edmonton with Kitimat, linking the oil sands with a port that could theoretically ship oil to customers in Asia. Although oil-sands products can already be exported to Asia on an existing Edmonton-Vancouver pipeline, the industry says Gateway is essential and invokes the spectre of a valuable resource trapped in Northern Alberta, particularly given the uncertain future of the Keystone pipeline.

At stake, industry believes, are billions of dollars in revenue for oil companies, and potential tax revenue for provincial and federal treasuries.

The Haisla have their own view.

They spent half a century watching white men make millions on their land. Alcan, the Montreal aluminum maker, arrived in the 1950s and carved a smelter and the company town of Kitimat from the wilderness, ignoring the Haisla in Kitamaat Village. But over the past decade, the Haisla have rebuilt their economy, which thrived before the arrival of Alcan on trading fish and other natural resources, to win their piece of the industrial action around the Douglas Channel.

The Haisla have reached two key deals with outside interests in recent years. Rio Tinto Alcan is starting a $3.3-billion overhaul of its aluminum smelter, and in 2010 agreed on an extensive deal involving money, jobs and other benefits. And across the channel from Kitamaat Village is the area that is slated to become a major $5-billion-plus LNG export plant, to be built by Apache Corp. The LNG plan involves transporting natural gas via pipeline, liquefying it at the plant and shipping it out of the channel by tanker.

“It would be an unfair characterization to say the Haisla, or first nations in general, are anti-business,” said Allan Donovan, head of Donovan & Co., a Vancouver law firm that specializes in aboriginal law, and long-time counsel to the Haisla.

The Haisla are also trying to rebuild the fishery for eulachon (a slender, oil-rich fish whose coastal population has crashed in recent decades) but they don’t insist on a completely unspoiled environment.

“They’re open for business,” said George Burke, one of the top corporate lawyers in Canada, a partner at Blakes in Vancouver, and counsel to the Haisla for deal-making. “They are keenly aware of business exigencies.”

Business has paid off for all Haisla people. A quarter of $50-million made from one LNG deal was divided among some 1,500 people, who received $8,000 apiece in December, 2010. The rest, along with other cash, is in long-term investments.

If the Apache export plant is built, the Haisla will collect at least $3.3-million a year in rent for the land, and probably $5-million a year in taxes, if not more. That would exceed the $6-million doled out annually by Aboriginal Affairs in Ottawa.

The Haisla are doing business as well as any oil company. But there remains one big-money deal they have zero interest in.

“We’re going to contest the national interest theory,” said Mr. Ross. “Rights and title are protected by the Constitution. And nowhere do we see that being overridden by national interest or economic development. At the core of it, to make a couple bucks, Enbridge wants to push an oil pipeline through Kitimat. We don’t think that’s in the national interest.”

With a report from John Ibbitson

Follow on Twitter: @davidebner

 
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