Eagle Spirit pipeline plan obtains ‘licence’ as B.C. First Nations chiefs sign on to project
Just as proposed bitumen pipelines through British Columbia seemed hopeless because of widespread opposition, backers of the aboriginal-led Eagle Spirit pipeline plan announced a major breakthrough Wednesday. The group has solid support from the province’s First Nations for its $14-billion-to-$16-billion project linking Alberta’s oil sands to the West Coast and an invitation to the oil community and the Alberta government to get on board.
What made the difference? The one million barrel-a-day pipeline plan, plus a possible refinery that would cost extra, started with getting First Nations involved, offering them a large equity stake, and obtaining their ‘social licence.’ There were also growing concerns about transportation of oil by rail, which aboriginals see as inevitable if oil pipelines aren’t built. And there was encouragement from Alberta First Nations familiar with resource development and benefiting from the oil sands business.
“We are very cognizant of how important this is to Canada, and Alberta in particular, and we have a solution,” Calvin Helin, chairman and president of Vancouver-based Eagle Spirit Energy Holdings Ltd., and a member of the Tsimshian First Nation in northwestern B.C., said Wednesday at a news conference in Calgary. “The chiefs came out today to say they are prepared to be partners.”
To show they mean it, the chiefs, all from B.C., signed a declaration of support in the heart of Canada’s oilpatch and laid down a set or principles under which they are prepared to do business, such as acceptance that they are the owners and stewards of the land, environmental regulations that are consistent with their traditional laws, and fair ownership in projects.
Among them were Chief Dan George, of the Ts’il Kaz Koh First Nation; Chief Archie Patrick of the Stellat’en First Nation; Larry Marsden, Head Chief, on behalf of the Gitsegukla hereditary Chiefs; Art Mathews, Head Chief, on behalf of the Gitwangak Hereditary Chiefs; Wes Sam, Business and Economic Development Lead, Burns Lake Indian Band.
With so many other plans in the works — including the more advanced Northern Gateway pipeline proposed by Enbridge Inc. — that are struggling to make headway, Eagle Spirit’s lack of firm commercial backing so far, and First Nations’ skinny track record at leading big projects across the finish line, it’s easy to be skeptical.
Yet the plan, first announced last year in partnership with the Vancouver-based Aquilini Group, a large construction company and owner of the Vancouver Canucks hockey team, has overcome the most significant stumbling block to pipeline projects so far by persuading aboriginals that they have more to gain than to lose.
Eagle Spirit has been working on several route options and expects to pick one in the next two months. It would run north of the Northern Gateway right-of-way, ending either in Prince Rupert or further north. As many as 80% of the 20 to 22 First Nations impacted support the project, and many more around B.C. are getting onside, Mr. Helin said.
The northern options cross fewer water bodies than Northern Gateway — which has already received regulatory approval — reducing the risk of water contamination if there is a spill; impact fewer First Nations, including some that are more open to development because they have experience with the oil and gas business; and lead to ports that are better suited than Kitimat, Northern Gateway’s endpoint, Mr. Helin said.
Aboriginal backing is expected to lead to smoother regulatory reviews and could mean the pipeline could be shipping oil to tankers bound for Asia by the end of the decade, said David Negrin, president of Aquilini Development and Construction Inc.
Mr. Negrin said the plan has made large strides in the past three months.
“They see the rails coming and they see the oil coming, and they want to be a part of it,” he said. “The message we wanted to put out to the Alberta government is that the door is open to come and talk.”
There would be no shortage of capital in Asia to fund the pipeline, nor of expertise to build it, he said. The group has had some discussions with Houston-based pipeline company Spectra Energy Corp., an Enbridge competitor. How its ownership would be split has yet to be finalized.
Aboriginal oil sands entrepreneur David Tuccaro, a director of Eagle Spirit, said Alberta First Nations involved in the oil businesses showed their B.C. counterparts there is upside to resource development.
“Whether we like it or not, the oil will come out of the oil sands and has to end up somewhere,” said the president and CEO of Tuccaro Inc., a treaty Indian from Fort Chipewyan. “What we are doing here with the B.C. chiefs is make them realize that the profit that comes out of the pipeline is going to help their communities with education and with poverty that has been there for many years.”
The announcement came at a bad time for the oil sector, where the main preoccupation is cutting investments, not making new ones, due to the oil price slump.
“This should be the best news, then,” Mr. Helin said. “There is a future to the market.”