Energy
Indigenous communities await Trans Mountain pipeline share
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Tanker Dubai Angel at the Trans Mountain terminal, Burnaby
(Photo: Radio-Canada / Georgie Smyth / CBC)
From Resource Works
Ottawa’s Commitment to 30 percent Indigenous Stake in Trans Mountain Pipeline Still Awaiting Confirmation.
Indigenous leaders in Western Canada have been waiting for months for confirmation that the federal government will indeed enable Indigenous Peoples to get a 30 percent share in the Trans Mountain oil pipeline system.
That Ottawa has such a share in mind has been confirmed by Alberta Premier Danielle Smith. She says Ottawa is looking at possibly offering a loan guarantee to First Nations.
“They wanted to get the Indigenous partners to own 30 per cent. . . . It’s going to be a great source of income for the Indigenous partners.”
With the pipeline system’s capacity set to almost triple through the expansion project known as TMX, the federal government first announced in 2019, its intention to explore the possibility of the economic participation of 129 affected Indigenous Peoples.
Finance Minister Chrystia Freeland sent Indigenous leaders a letter last August outlining a plan to sell a stake in the pipeline system to eligible communities through a special-purpose vehicle. It said they would not have to risk any of their own money to participate.
But since then Indigenous groups have been awaiting further word from federal authorities on how and when the equity promise will be kept.
All Ottawa has said publicly is this on May 1: “The federal government will launch a divestment process in due course.”
Two key groups have aired proposals for acquiring equity in the oil pipeline:
- The Western Indigenous Pipeline Group was formed in 2018 “ to acquire a major stake in Trans Mountain for the benefit of Indigenous communities who live along the pipeline.” It’s been working behind the scenes, and, with Pembina Pipelines Corporation, developed in 2021 the Chinook Pathways operating partnership.
“Chinook Pathways is finance ready. There are no capital contributions required for Indigenous communities. We will structure the transaction so that participating communities will make zero financial contribution.”
- Project Reconciliation, also founded in 2018, proposed a ”framework” that would give ownership of the pipeline system to 129 Indigenous Peoples.
“We are poised to facilitate Indigenous ownership of up to 100 percent, fostering economic autonomy and environmental responsibility.”
And: “A portion of revenue generated (portion directed by each Indigenous community) will be used to establish the Indigenous Sovereign Wealth Fund, supporting investment in infrastructure, clean energy projects and renewable technologies.”
- A third group, the Alberta-based Iron Coalition, announced interest in TMX in 2019, but apparently dropped out in 2020.
In Alberta, the pipeline system spans the territories of Treaty 6, Treaty 8, and the Métis Nation of Alberta (Zone 4). In British Columbia, the system crosses numerous traditional territories and 15 First Nation reserves.
Commentator Joseph Quesnel writes: “According to Trans Mountain, there have been 73,000 points of contact with Indigenous communities throughout Alberta and British Columbia as the expansion was developed and constructed. . . .
“Beyond formal Indigenous engagement, the project proponent conducted numerous environmental and engineering field studies. These included studies drawing on deep Indigenous input, such as traditional ecological knowledge studies, traditional land use studies, and traditional marine land use studies.”
And Alberta’s Canadian Energy Centre reported: “In addition to $4.9 billion in contracts with Indigenous businesses during construction, the project leaves behind more than $650 million in benefit agreements and $1.2 billion in skills training with Indigenous communities.”
Not all First Nations have been happy with the expansion project.
In 2018, the federal appeal court ruled that Ottawa had failed to consider the concerns of several nations that challenged the project. In 2019, the project was re-approved by Ottawa, and again several nations (including the Squamish and Tsleil-Waututh) appealed. That appeal was dismissed in 2020. The nations then went to the Supreme Court of Canada, but it declined to hear the case.
Private company Kinder Morgan originally proposed the expansion project, but when it threatened to back out in 2018, the federal government stepped in and bought the existing pipeline, and the expansion project, for $4.5-billion. Ottawa said it was “a necessary and serious investment in the national interest.”
Ottawa at that time estimated that the total cost of the expansion project would come in around $7.4 billion. But cost overruns have since driven the final price to some $34 billion.
On the other hand, Ernst & Young found that between 2024 and 2043, the expanded Trans Mountain system will pay $3.7 billion in wages, generate $9.2 billion in GDP, and pay $2.8 billion in government taxes.
The TMX expansion twinned the 1953 Trans Mountain pipeline from near Edmonton to Burnaby (1,150 km) and increased the system’s capacity to 890,000 barrels a day from 300,000 barrels a day.
The original pipeline will carry refined products, synthetic crude oils, and light crude oils with the capability for heavy crude oils. The new pipeline will primarily carry heavier oils but can also transport lighter oils.
And the Alberta Energy Regulator says it expects oilsands production to grow by more than 17 per cent by 2033 (increasing to four million barrels a day from 3.4 million in 2023). And it expects global oil prices will continue to rise.
The TMX expansion finally opened and began to fill on May 1 this year.
And, as our CEO Stewart Muir noted, there was a quick reduction of eight cents a litre in gasoline prices for Vancouver due to completion of the project.
From Trans Mountain’s Westridge Marine Terminal at Burnaby, around three million barrels of oil have been shipped to China or India since the TMX expansion opened.
But because the port of Vancouver can handle only smaller Aframax tankers, more than half the oil has first been shipped to California, where it is then transferred to much larger VLCC (Very Large Crude Carrier) tankers. That makes for a longer but potentially cheaper journey.
At Westridge, because of limited tanker size, cargoes are limited to about 600,000 barrels per Aframax vessel. The largest VLCCs can carry two million barrels of oil. Westridge now can handle 34 Aframax tankers per month.
Some 20 tankers loaded oil there in June, a couple fewer than TMX had hoped for.
“This first month is just shy of the 350,000-400,000 bpd (barrels a day) we expected ahead of the startup,” said shipping analyst Matt Smith. “We are still in the discovery phase, with kinks being ironed out . . . but in the grand scheme of things, this has been a solid start.”
The Dubai Angel became the first Aframax tanker to load at Westridge. It took on 550,000 barrels of Alberta crude in the last week of May, and headed for the port of Zhoushan, China.
Now the Dubai Angel is headed to Burnaby for another load, and is expected to arrive there on July 8.
Energy
Federal Government Suddenly Reverses on Critical Minerals – Over Three Years Too Late – MP Greg McLean
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From Energy Now
By Calgary MP Greg McLean
Government in Full Reverse
Canada-U.S. Trade Relations is obviously the most pressing issue facing Canadians today.
It’s important to remember how we arrived at this point, but also to question the sincerity of the Liberal Ministers and leadership contenders who are now posing solutions, such as:
- We need to diversify our resource trade
- We need to build pipelines and infrastructure to get our exports to tidewater
- We need to streamline our regulatory burden that stands in the way of development
- We need to halt the escalating carbon tax
- We need to reverse the capital gains tax increase
The Liberals are turning themselves inside out on the policy choices they have made over nine years, and put Canada in a precarious economic position vis-à-vis our trade position.
If you believe what they are saying now, these Liberal Ministers and leadership contenders are saying that Canada needs EXACTLY THE OPPOSITE of what they have delivered over these past nine years.
I can’t comment on whether these NEW Liberal policy positions completely lack sincerity, or whether they are the result of a ‘deathbed conversion’, but nine years of moving in the exact opposite direction to their new words has led Canada to where it is today – and that is nine lost years for Canadians, our prosperity, and our role in a complex world.
Below is another example of a specific morphing of a Liberal policy – to the one I helped put forth – 3 ½ years ago – regarding Canada’s policy on critical minerals.
Minister Late to Critical Mineral Strategy
Here’s a gem of wisdom from December’s Fall Economic Statement:
Canada will work with the United States and other likeminded partners to address the impacts of non-market policies and practices that unduly distort critical mineral prices. This includes ensuring that market participants recognize the value of critical minerals produced responsibly, with due regard for high environmental standards and labour practices.
Then, on January 16th, the following from Canada’s Natural Resource Minister, Jonathan Wilkinson:
During a panel discussion in Washington on Wednesday, Natural Resources Minister Jonathan Wilkinson proposed that enforcing a floor on metals prices could be “one of the centerpieces of the conversations we would then be having at the G7” summit later this year.
Western nations have long warned that China’s dominance in everything from nickel to lithium has let the country’s producers flood the market with supply, thereby keeping prices artificially low for competitors. Wilkinson has touted price floors as a way to combat that market control.
What a great idea!
Here’s the relevant excerpt from June, 2021, from a dissenting report on the Natural Resources Committee, when I served as my party’s critic, in contrast to the government’s critical minerals approach at that time:
Recommendation 4: Coordinate with our allies to establish a dedicated supply stock of critical minerals, possibly through a physical storage and floor pricing mechanism for visibility and pricing purposes.
Excerpt: Canada is too small of a market to undertake this effort on its own, but it can play a key role with its longstanding leadership as the mining jurisdiction of choice in the world. Canada’s pre-eminent role as a financing jurisdiction for international mining is well understood. Although we are at the early stages of losing this historical leadership to Australia, acting quickly to solidify Canada’s leadership will be a strong signal. Australia and Europe have already established critical mineral strategies to offset the dominance of the market that China has exerted. At the very least, Canada’s coordination needs to include the United States, and probably Mexico (through CUSMA), as the ongoing funding of a critical mineral supply may require backstopping developments with a price amelioration mechanism. In essence, a floor price to ensure the protection of critical mineral developments from manipulating price volatility – and which has held back developments, or caused the insolvency of several of these developments, due to non-transparent world market pricing mechanisms. … Establishing a steady supply of these critical minerals will lead to more value-added opportunities, in conjunction with our trade partners.
Conservative Dissenting Recommendations
My question to the Minister: ‘What took you so long?’
This approach was presented three and a half years ago – and the Government chose to ignore it then.
No surprise now, perhaps, as we’ve seen this Minister flip-flop on so many of the nonsense policies he’s put forth or acquiesced in at Cabinet:
- The Clean Electricity Regulations (still opaque)
- Canada’ role in shipping hydrocarbons to the world
- Building energy infrastructure
To say nothing of the various Cabinet decisions he has been a part of that have led to Canada’s current weak negotiating position with our allies. We effectively have not had a Minister of Natural Resources under his tenure.
Nothing topped it off more succinctly than his speech at the World Petroleum Show, held in Calgary in September 2023, when his remarks on behalf of the Government of Canada left industry participants around the world questioning whether the Minister was ‘tone-deaf’ or if, in fact, he knew anything about natural resources.
It seems his move to the position I promoted – three and a half years ago – shows that he’s finally listening and learning (or un-learning his previous narratives, perhaps)– but it’s quite late in the day. Time and our future have been wasted.
Alberta
Open letter to Ottawa from Alberta strongly urging National Economic Corridor
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Canada’s wealth is based on its success as a trading nation. Canada is blessed with immense resources spread across a vast country. It has succeeded as a small, open economy with an enviable standard of living that has been able to provide what the world needs.
Canada has been stuck in a situation where it cannot complete nation‑building projects like the Canadian Pacific Railway that was completed in 1885, or the Trans Canada Highway that was completed in the 1960s. With the uncertainty of U.S. tariffs looming over our country and province, Canada needs to take bold action to revitalize the productivity and competitiveness of its economy – going east to west and not always relying on north-south trade. There’s no better time than right now to politically de-risk these projects.
A lack of leadership from the federal government has led to the following:
- Inadequate federal funding for trade infrastructure.
- A lack of investment is stifling the infrastructure capacity we need to diversify our exports. This is despite federally commissioned reports like the 2022 report by the National Supply Chain Task Force indicating the investment need will be trillions over the next 50 years.
- Federal red tape, like the Impact Assessment Act.
- Burdensome regulation has added major costs and significant delays to projects, like the Roberts Bank Terminal 2 project, a proposed container facility at Vancouver, which spent more than a decade under federal review.
- Opaque funding programs, like the National Trade Corridors Fund (NTCF).
- Which offers a pattern of unclear criteria for decisions and lack of response. This program has not funded any provincial highway projects in Alberta, despite the many applications put forward by the Government of Alberta. In fact, we’ve gone nearly 3 years without decisions on some project applications.
- Ineffective policies that limit economic activity.
- Measures that pit environmental and economic objectives in stark opposition to one another instead of seeking innovative win-win solutions hinder Canada’s overall productivity and investment climate. One example is the moratorium on shipping crude through northern B.C. waters, which effectively ended Enbridge’s Northern Gateway proposal and has limited Alberta’s ability to ship its oil to Asian markets.
In a federal leadership vacuum, Alberta has worked to advance economic corridors across Canada. In April 2023, Alberta, Saskatchewan and Manitoba signed an agreement to collaborate on joint infrastructure networks meant to boost trade and economic growth across the Prairies. Alberta also signed a similar economic corridor agreement with the Northwest Territories in July 2024. Additionally, Alberta would like to see an agreement among all 7 western provinces and territories, and eventually the entire country, to collaborate on economic corridors.
Through our collaboration with neighbouring jurisdictions, we will spur the development of economic corridors by reducing regulatory delays and attracting investment. We recognize the importance of working with Indigenous communities on the development of major infrastructure projects, which will be key to our success in these endeavours.
However, provinces and territories cannot do this alone. The federal government must play its part to advance our country’s economic corridors that we need from coast to coast to coast to support our economic future. It is time for immediate action.
Alberta recommends the federal government take the following steps to strengthen Canada’s economic corridors and supply chains by:
- Creating an Economic Corridor Agency to identify and maintain economic corridors across provincial boundaries, with meaningful consultation with both Indigenous groups and industry.
- Increasing federal funding for trade-enabling infrastructure, such as roads, rail, ports, in-land ports, airports and more.
- Streamlining regulations regarding trade-related infrastructure and interprovincial trade, especially within economic corridors. This would include repealing or amending the Impact Assessment Act and other legislation to remove the uncertainty and ensure regulatory provisions are proportionate to the specific risk of the project.
- Adjusting the policy levers that that support productivity and competitiveness. This would include revisiting how the federal government supports airports, especially in the less-populated regions of Canada.
To move forward expeditiously on the items above, I propose the establishment of a federal/provincial/territorial working group. This working group would be tasked with creating a common position on addressing the economic threats facing Canada, and the need for mitigating trade and trade-enabling infrastructure. The group should identify appropriate governance to ensure these items are presented in a timely fashion by relative priority and urgency.
Alberta will continue to be proactive and tackle trade issues within its own jurisdiction. From collaborative memorandums of understanding with the Prairies and the North, to reducing interprovincial trade barriers, to fostering innovative partnerships with Indigenous groups, Alberta is working within its jurisdiction, much like its provincial and territorial colleagues.
We ask the federal government to join us in a new approach to infrastructure development that ensures Canada is productive and competitive for generations to come and generates the wealth that ensures our quality of life is second to none.
-
Devin Dreeshen
Devin Dreeshen was sworn in as Minister of Transportation and Economic Corridors on October 24, 2022.
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