Indigenous Partnerships A Growing Trend Of Increasing Importance On Major Energy Projects
This is the first in a series examining Indigenous participation in energy projects.
Indigenous participation in major energy projects is “absolutely key” to the success of those projects, says Steve Saddleback, director, National Energy Business Centre of Excellence, Indian Resource Council of Canada (IRC). Fortunately, industry is “starting to realize” the vital role First Nations as rights and title holders can play on projects.
“When you have [Indigenous] participation on it, they are going to advocate for it,” he told the Bulletin. “They will look to cut down costs in terms of using local content, local labour force, and you don’t have to worry about bringing in folks from far off places.”
He added: “When you’re investing into First Nations communities, it’s that ESG component and having that ‘I’ in there, that Indigenous component, included into the life cycle. It’s not simply hoisting Indigenous community into one of those buckets that ESG is recognizing. It’s spread across all [buckets], and it can be an absolutely vital piece of not only project design but how do you build that into the life cycle, using that life cycle approach.”
Stephen Buffalo, president and chief executive officer at the IRC, told the recent the 2022 Scotiabank-CAPP Energy Symposium that there is a huge global demand for Canadian energy, and it is better for industry to foster Indigenous partnerships than it is to foster Indigenous opponents.
In March, TC Energy Corporation signed option agreements to sell a 10-per-cent equity interest in the Coastal GasLink Pipeline Limited Partnership to Indigenous communities across the project corridor.
The company made available an opportunity to all 20 Nations holding existing agreements with Coastal GasLink to become business partners through equity ownership. These Nations have established two entities (CGL First Nations Limited Partnership and the FN CGL Pipeline Limited Partnership) that together represent 16 communities with confirmed support for the option agreement.
“Now, to be a sustainable business, we must also foster shared prosperity for our community stakeholders and Indigenous rights holders,” François Poirier, president and CEO, told TC Energy’s recent annual general meeting. He said the Coastal GasLink deal demonstrates the value First Nation partnerships bring on a project, and his company strives to “partner with Indigenous peoples to create opportunities that meet their individual community needs.”
Also in March, Tamarack Valley Energy Ltd. entered a strategic partnership with the Peavine Métis Settlement in the High Prairie area that covers 29.5 sections of land, which are prospective for the Clearwater formation. These lands offset competitor appraisal wells that have illustrated the potential of the play in the area.
Meanwhile, in February, First Nation Capital Investment Partnership (FNCIP), Wolf Midstream, Whitecap Resources Inc. and Heart Lake First Nation jointly proposed a Fort Saskatchewan-area saline aquifer sequestration hub to “transform the future of carbon reduction through the development of world-scale CO2 infrastructure.”
The sequestration hub will serve large facilities in Alberta’s Industrial Heartland that are seeking an independent and timely sequestration solution.
Last year, Pembina Pipeline Corporation and Haisla Nation announced a partnership to develop the proposed Cedar LNG project, with Pembina acquiring equity interests that PTE Cedar LP and Delfin Midstream Inc. owned, resulting in an approximate ownership of 50 per cent each between the Haisla Nation and Pembina. Further, Pembina assumed operatorship of the project going forward and has assembled accordingly a floating LNG team.
“Cedar is an Indigenous-led project,” Stu Taylor, senior vice-president, marketing and new ventures and corporate development for Pembina, told another 2022 Scotiabank-CAPP Energy Symposium panel discussion. “The Haisla community had the foresight some time ago with the negotiations and conversations with LNG Canada and [TC Energy] on Coastal GasLink to secure capacity on the pipeline.”
Resource development support
There is a common misconception that Indigenous communities oppose resource development, according to Robert Merasty, executive director, Indigenous Resource Network. In reality, he told the energy symposium, nothing could be further from the truth.
“We have strong business leaders understanding business. We have great business acumen in our portfolios. And so, we have to build that confidence within our relationships. We ask our industry partners to help us with that. We ask for our partners to reach out and look to build those relationships with our communities, one community at a time. That way, everyone will benefit.”
In the seven years since he started in his current role at the IRC, Saddleback has seen a sharp increase in equity ownership opportunities and equity ownership of First Nations in major energy projects, he told the DOB. “We’ve come a long way in how industry and Canada in general is looking to improve relationship opportunities with First Nations and Indigenous communities in the building of projects.”
First Nations have a history of prosperity “since time immemorial” that can benefit companies partnering on these major developments, he added. Saddleback is excited about the future and what Indigenous experience has to offer. “We were trading, and we have stories that go back all these years, recognizing that trade continues to exist, and you absolutely can have that balance between economic development and protection of the environment.”