Indigenous-owned Natural Law Energy Inc. has signed a deal allowing it to make an equity investment of up to $1-billion in the Keystone XL pipeline, in a move it also hopes can help persuade opponents to support the project.
The deal with TC Energy Corp. gives Natural Law until September, 2021, to secure financing to buy into the pipeline. It builds on a memorandum of understanding signed two months ago. TC Energy TC Energy says it will use similar ownership models for additional Indigenous communities along the Keystone XL corridor in Canada and the United States.
Natural Law Energy is an alliance of First Nations from lands that span Alberta and Saskatchewan.
Tuesday’s agreement includes the Nekaneet and Little Pine First Nations in Saskatchewan, and the Ermineskin Cree Nation, Montana First Nation and Louis Bull Tribe in Alberta.
The company’s chief executive, Travis Meguinis, told The Globe and Mail that the billion-dollar deal is one of the largest ever made between an energy company and First Nations.
But completion of the pipeline – which will ship 830,000 barrels of crude a day to Steele City, Neb., from Hardisty, Alta. – is far from guaranteed.
Keystone XL is still the subject of numerous legal disputes in the United States, and president-elect Joe Biden promised during the recent election campaign that he would tear up a key presidential permit for the project.
Still, Mr. Meguinis believes the deal is a solid investment that will bring much-needed wealth to First Nation communities and play a key role in helping secure support for the project, particularly south of the border.
That’s because the group has “a lot in common” with Mr. Biden, Mr. Meguinis said, and will bring its experience and traditional knowledge of environmental protection to the table, in both improving regulatory compliance and helping alleviate the concerns of those fighting the pipeline.
"We can be more responsible stewards of the land and bring more efficiency to the transition from carbon [fuels] to renewables,” he said.
“It’s not an overnight transition. In all the free world, everybody is relying on fossil fuel.”
Natural Law hasn’t settled on where it will procure up to $1-billion to secure its stake in the pipeline, but Mr. Meguinis said numerous banks and private finance companies have already reached out. He said all options will be assessed by the company’s legal team.
Revenue from Natural Law’s stake in Keystone will be split evenly between the five nations if and when crude starts flowing through the 1,947-kilometre pipeline.
That tactic differs from that of the Alberta government, which announced a $1.5-billion equity buy-in earlier this year that it plans to sell off once the line is operational. The province will also provide a loan guarantee backstop of up to $6-billion. It estimates the investment will bring a net return to the provincial treasury of $30-billion through royalties and higher oil prices over two decades.
Alberta Premier Jason Kenney trumpeted the Natural Law deal in a statement Tuesday as a “historic agreement” and a model of how to build “strong and trusted partnerships between industry and Indigenous groups” that bring jobs and wealth into their communities.
“As stewards of the land, air and water, First Nations project partners will help ensure that Keystone XL – and projects like it – continue to be built with the protection of the environment at the forefront of every decision,” he said.
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