First Nations Buy Into Pipelines

From the Frontier Centre for Public Policy

“Meaningful Indigenous participation in our resource economy is maturing. At first, First Nations used to ask for compensation, the jobs, and then for the contracts that created those jobs, Now they seek purchase equity in the project itself. Soon they will create the project and seek others to invest in it. Then they will have real economic power.”

It’s taken years to get here, but there’s a new trend in Canada’s pipeline industry, and it couldn’t come soon enough. That’s because the path we’ve been on until now has been one to ruin.

On July 30, TC Energy announced it was in the process of selling 5.34 per cent of its Nova Gas Transmission Ltd. (NGTL) System and the Foothills Pipeline assets for a gross purchase price of $1 billion. “The Agreement is backed by the Alberta Indigenous Opportunities Corporation (AIOC) and was negotiated by a consortium committee (Consortium) representing specific Indigenous Communities (Communities) across Alberta, British Columbia and Saskatchewan. This results in an implied enterprise value of approximately $1.65 billion, inclusive of the proportionate share of the Partnership Assets’ collective debt,” TC Energy said.

This comes a few months after its March 14 announcement to sell “all outstanding shares in Prince Rupert Gas Transmission Holdings Ltd. and the limited partnership interests in Prince Rupert Gas Transmission Limited Partnership (collectively, PRGT). PRGT is a wholly owned subsidiary of TC Energy and the developer of a natural gas pipeline project in British Columbia and potential delivery corridor that would further unlock Canada as a secure, affordable and sustainable source of LNG.”

The Nova system sale is significant. It’s the principal natural gas gathering system throughout Alberta and a bit into B.C. In addition to supplying Alberta with its gas needs, Nova, in turn, feeds the TC Energy Mainline. It also supplies Saskatchewan via Many Islands Pipe Lines and TransGas, both subsidiaries of SaskEnergy. And since Saskatchewan’s domestic gas production keeps falling, we now rely heavily on Alberta gas to keep our furnaces lit and our new gas fired power plants turning, keeping the lights on. When you look at the Nova map, it’s basically the map of Alberta.

Some of the most significant difficulties in getting major pipeline projects built in this country over the last 16 years has been Indigenous opposition. One of the first stories I wrote about with Pipeline News during the summer of 2008 was a First Nations protest on the Enbridge right of way at Kerrobert, complete with a teepee. That was for the Alberta Clipper project, but it was relatively quickly resolved.

Then there was Enbridge’s Northern Gateway project, which was approved by the Conservative federal government but halted by the courts because of insufficient Indigenous consultation. It was ultimately killed very early into the Trudeau-led Liberal administration, when he said, “The Great Bear Rainforest was no place for a pipeline, a crude pipeline.”

Northern Gateway would have terminated at Kitimat. Yet, curiously enough, that same forest had to be crossed to built the TC Energy Coastal GasLink project. It went grossly overbudget in no small part due to delays and resistance in every manner possible from the Wet’suweten in northern B.C. As Canadian Press reported on Dec. 11, 2023, “By the time the pipeline was finished, its estimated construction cost had ballooned from $6.6 billion to $14.5 billion.”

And then there was Trans Mountain Expansion. It had opposition from the BC government, City of Burnaby, and everyone who could apply a Sharpie marker to a Bristol board. But Indigenous opposition was a major factor. As Pipeline Online reported via the Canadian Press, “The project’s $34-billion price tag has ballooned from a 2017 estimate of $7.4 billion, with Trans Mountain Corp. blaming the increase on “extraordinary” factors including evolving compliance requirements, Indigenous accommodations, stakeholder engagement, extreme weather and the COVID-19 pandemic.”

By this spring, the number was $34 billion, and I anticipate its final cost will be higher still.

Maturing

There’s been a big change in recent years, not just in pipelines, but in other energy industries like wind and solar. That change had gone from consultation to jobs to equity investment.

The word used almost always is “reconciliation.” That can be a loaded word in many ways, Some feel it will heal wounds, and right past wrongs, or at least try to. Others would say it’s a form of extortion. And some take issue with racial overtones. But here’s something I heard this week that makes a lot of sense:

“Meaningful Indigenous participation in our resource economy is maturing. At first, First Nations used to ask for compensation, the jobs, and then for the contracts that created those jobs, Now they seek purchase equity in the project itself. Soon they will create the project and seek others to invest in it. Then they will have real economic power.”

That’s what Steve Halabura, professional geologist, told me. And he would know, since he’s been working with First Nations on this economic development front.

And you see that in the timeline I laid out. The 2008 protests were very much about compensation and jobs. Trans Mountain Expansion saw significant First Nations’ owned and operated firms awarded contracts. And now, they’re buying equity positions.

You know what? If First Nations bands, and people, do indeed become owners in these resource companies and infrastructure, if it helps pay for housing and water treatment plants, if it means meaningful work and paycheques, are they likely to fight the next project tooth and nail? Or will they want to be a part of it?

And think of it this way – if we could have gotten to this point ten years ago, maybe these projects might have gone much more smoothly. Maybe their final costs wouldn’t have been double, or quadruple, the original budget. When you think of it in that perspective – if a billion dollar equity stake meant Coastal GasLink could have cost $5 billion less, would it have been worth it to bring First Nations in as equity partners?

Some will say that’s extortion. Others would say it’s justice, or reconciliation. But maybe, just maybe, this is how we move forward, and everyone in the end wins. And maybe then Canada can, once again, build great things.

Brian Zinchuk is editor and owner of Pipeline Online and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

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Trump Moves To Reverse Biden’s Green New Deal Agenda — With A Special Focus On Wind

Published on January 22, 2025

Todayville

From the Daily Caller News Foundation

By David Blackmon

Shares of big Danish offshore wind developer Orsted dropped by 17% Monday, the same day President Donald Trump took the oath of office to become the 47^th president of the United States. The two events are not merely coincidental with one another.

To be sure, Orsted’s loss of market cap was caused by several factors, including both the general slowing of the offshore wind business, and Orsted’s own announcement that it will incur a $1.69 billion impairment charge related to its Sunrise Wind project off the coast of New York. Company CEO Mads Nipper attributed the charge to delays and cost increases and said the project completion date is now delayed to the second half of 2027.

But there can be little doubt that the raft of energy-related executive orders signed by Trump also contributed to the drop in Orsted’s stock price. As part of a Day 1 agenda consisting of a reported 196 executive orders, the new president took dead aim at reversing the Biden Green New Deal agenda in general, with a special focus on wind power projects on federal lands and waters.

In addition to general orders declaring a national energy emergency and pulling the United States out of the Paris Climate Accords (for a second time), Trump signed a separate order titled, “Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects.” That long-winded title (pardon the pun) is quite descriptive of what the order is designed to accomplish.

Section 1 of this order withdraws “from disposition for wind energy leasing all areas within the Offshore Continental Shelf (OCS) as defined in section 2 of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331.” Somewhat ironically, this is the same OCSLA cited in early January by former President Joe Biden when he set 625 million acres of federal offshore waters off limits to oil and gas leasing and drilling into perpetuity.

As with Biden’s LNG permitting pause, the fourth paragraph of Section 1 in Trump’s order states that “Nothing in this withdrawal affects rights under existing leases in the withdrawn areas.” However, the same paragraph goes on to subject those existing leases to review by the secretary of the Interior, who is charged with conducting “a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal, and submit a report with recommendations to the President, through the Assistant to the President for Economic Policy.”

Observant readers will know that the parameters of this order as it relates to offshore wind are essentially the same as a proposal I suggested in a previous piece here on Jan. 1. So, obviously, it receives the Blackmon Seal of Approval.

But we should also note that Trump goes even further, extending this freeze to onshore wind projects as well. While the rationale for the freeze in offshore leasing and permitting cites factors unique to the offshore like harm to marine mammals, ocean currents and the marine fishing industry, the rationale supporting the onshore freeze cites “environmental impact and cost to surrounding communities of defunct and idle windmills and deliver a report to the President, through the Assistant to the President for Economic Policy, with their findings and recommended authorities to require the removal of such windmills.”

This gets at concerns long held by me and many others that neither the federal government nor any state government has seen fit to require the proper, complete tear down and safe disposal of these massive wind turbines, blades, towers and foundations once they outlive their useful lives. In most jurisdictions, wind operators are free to just abandon the projects and leave the equipment to dilapidate and rot.

The dirty secret of the wind industry, whether onshore or offshore, is that it is not sustainable without consistent new injections of more and more subsidies, along with the tacit refusal by governments to properly regulate its operations. Trump and his team understand this reality and should be applauded for taking real action to address it.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Business

Debunking the myth of the ‘new economy’

Published on January 22, 2025

Todayville

From Resource Works

Where the money comes from isn’t hard to see – if you look at the facts

In British Columbia, the economy is sometimes discussed through the lens of a “new economy” focused on urbanization, high-tech innovation, and creative industries. However, this perspective frequently overlooks the foundational role that the province’s natural resource industries play in generating the income that fuels public services, infrastructure, and daily life.

The Economic Reality

British Columbia’s economy is highly urbanized, with 85% of the population living in urban areas as of the 2021 Census, concentrated primarily in the Lower Mainland and the Capital Regional District.
These metropolitan regions contribute significantly to economic activity, particularly in population-serving sectors like retail, healthcare, and education. However, much of the province’s income—what we call the “first dollar”—originates in the non-metropolitan resource regions.

Natural resources remain the backbone of British Columbia’s economy. Industries such as forestry, mining, energy, and agriculture generate export revenue that flows into the provincial economy, supporting urban and rural communities alike. These sectors are not only vital for direct employment but also underpin metropolitan economic activities through the export income they generate.

They also pay taxes, fees, royalties, and more to governments, thus supporting public services and programs.

Exports: The Tap Filling the Economic Bathtub

The analogy of a bathtub aptly describes the provincial economy:

Exports are the water entering the tub, representing income from goods and services sold outside the province.
Imports are the water draining out, as money leaves the province to purchase external goods and services.
The population-serving sector circulates water within the tub, but it depends entirely on the level of water maintained by exports.

In British Columbia, international exports have historically played a critical role. In 2022, the province exported $56 billion worth of goods internationally, led by forestry products, energy, and minerals. While metropolitan areas may handle the logistics and administration of these exports, the resources themselves—and the wealth they generate—are predominantly extracted and processed in rural and resource-rich regions.

Metropolitan Contributions and Limitations

Although metropolitan regions like Vancouver and Victoria are often seen as economic powerhouses, they are not self-sustaining engines of growth. These cities rely heavily on income generated by resource exports, which enable the public services and infrastructure that support urban living. Without the wealth generated in resource regions, the urban economy would struggle to maintain its standard of living.

For instance, while tech and creative industries are growing in prominence, they remain a smaller fraction of the provincial economy compared to traditional resource industries. The resource sectors accounted for nearly 9% of provincial GDP in 2022, while the tech sector contributed approximately 7%.

Moreover, resource exports are critical for maintaining a positive trade balance, ensuring that the “economic bathtub” remains full.

A Call for Balanced Economic Policy

Policymakers and urban leaders must recognize the disproportionate contribution of British Columbia’s resource regions to the provincial economy. While urban areas drive innovation and service-based activities, these rely on the income generated by resource exports. Efforts to increase taxation or regulatory burdens on resource industries risk undermining the very foundation of provincial prosperity.

Furthermore, metropolitan regions should actively support resource-based industries through partnerships, infrastructure development, and advocacy. A balanced economic strategy—rooted in both urban and resource region contributions—is essential to ensure long-term sustainability and equitable growth across British Columbia.

At least B.C. Premier David Eby has begun to promise that “a new responsible, sustainable development of natural resources will be a core focus of our government,” and has told resource leaders that “Our government will work with you to eliminate unnecessary red tape and bureaucratic processes.” Those leaders await the results.

Conclusion

British Columbia’s prosperity is deeply interconnected, with urban centres and resource regions playing complementary roles. However, the evidence is clear: the resource sectors, particularly in the northern half of the province, remain the primary engines of economic growth. Acknowledging and supporting these industries is not only fair but also critical to sustaining the provincial economy and the public services that benefit all British Columbians.