TransCanada chief executive officer Russ Girling says the length of the Energy East pipeline would make it hard to divvy up equity.JEFF McINTOSH/The Globe and Mail
The dozens of First Nations along the route of TransCanada Corp.'s Energy East pipeline should not expect offers for equity stakes in the $12-billion project as the company seeks approval, although a host of other economic benefits would accrue to the communities, TransCanada's chief executive officer said.
The sheer size of the Energy East pipeline, 4,500 kilometres to New Brunswick from Alberta, and differences in degree of impact among the native communities along the route make that option too complicated for the project, which is aimed at moving oil-sands-derived crude to Eastern Canadian and export markets, TransCanada's Russ Girling said in a year-end interview.
Rival Enbridge Inc., which expects a regulatory decision for its Northern Gateway pipeline to the West Coast in the coming days, offered 10-per-cent ownership in the project to First Nations along the route, along with community development funds. Despite that, it still faces stiff opposition from numerous aboriginal groups, which worry about the risks of oil spills and loss of traditional culture.
"There are other ways to achieve similar economic benefit without the complications of equity," Mr. Girling said. "I think what these communities are looking for is sustainable employment, which they can operate and control. And we've come up with numerous ways of achieving that and I think those have proved to be the best path to achieving both parties' objectives."
The 1.1-million-barrel-a-day pipeline, which would be a combination of converted gas line from TransCanada's Canadian mainline and new facilities in Quebec and points east, will pass through and near 180 native communities, and benefits will vary based on which part of the line people live near, he said.
"This isn't new business for us. About 3,000 kilometres of this pipe is already in the ground, so in a lot of these communities … there is already road access, they're are familiar with where we're at," he said. "We're going to be changing the product in the line. We need to educate them and they need to understand the impacts of that. We need to understand how they feel about those impacts."
Canada's First Nations have often felt short-changed in major energy and resource development deals. Now, they have taken on an increasingly important economic role as industry seeks to build pipelines to major export markets that would pass through their territories. In British Columbia, where two major oil pipelines are planned, issues are complicated by the lack of treaties in most cases.
That is not the case in most of Eastern Canada, and as a result, Mr. Girling said he expects there to be less of a need for the federal and provincial governments to be involved in the Energy East project to dissect project-specific issues from larger issues of aboriginal rights and title.
The Assembly of First Nations warned that that does not lessen the company's need to engage and consult, which was spelled out in the recent report by Vancouver lawyer Doug Eyford, appointed by Prime Minister Stephen Harper to examine aboriginal attitudes to resource development.
"The reality is that there are different kinds of treaties or agreements – pre-Confederation treaties, numbered treaties, Robinson-Huron treaties, etc., and places where there are no treaties – in different areas of the country and it is incumbent upon TransCanada to do its due diligence in ensuring it is conducting its work in the right way," the AFN said in a statement to The Globe and Mail.
Mr. Girling said TransCanada will be meeting with all of the affected First Nations to describe various benefits, such as the employment that might be generated, as well as offering opportunities for input.
The company plans to file its regulatory applications for the project around the middle of 2014.
Jeffrey Jones