Indigenous groups could reap ‘significant’ revenue from stake in new oil pipeline: Crown corp

The head of Alberta’s Indigenous loan agency says a new oil pipeline to the B.C. coast could deliver “significant” returns for Indigenous owners, but stopped short of confirming

Premier Danielle Smith ‘s speculation that nations could potentially draw up to $1 billion a year.

“Returns can be significant and they can be very meaningful,” Chana Martineau, chief executive of Alberta Indigenous Opportunities Corp., said Tuesday. “Pipelines generate long-term, stable cash flows that are predictable, that the community can count on, that we can count on as lenders. That’s what makes them really attractive.”

Martineau made the comments after Alberta’s premier said the province would look at underwriting an Indigenous stake in a proposed one-million-barrel-per-day pipeline to B.C.’s northern coast, suggesting that it could be up to 50 per-cent owned by First Nations.

Smith speculated that an oil pipeline that cost $20 billion to build could generate $2 billion a year in revenue, with up to half going to Indigenous communities.

“Can you imagine the impact that would have on those communities in British Columbia and Alberta? It’s extraordinary,” she told an industry gathering Monday hosted by the Canadian Association of Energy Contractors. “What we have seen is that nations need their own source of revenue, and they do not like having to beg to us or beg to Ottawa to get revenue so that they can take care of their people.

“Someone is going to get the dividend revenue. Why not have more opportunity for Indigenous communities?” Smith added.

Alberta’s newly signed energy deal with Ottawa specifically taps Martineau’s loan agency as the vehicle to help backstop Indigenous co-ownership, but she said it is still early and that the Crown corporation has not yet been brought to the table by proponents or Indigenous groups.

The MOU, which outlines the broad strokes of a plan for a privately financed pipeline to the West Coast with Indigenous co-ownership, will first require Ottawa and Alberta to finalize an agreement on industrial carbon pricing and a major carbon capture and storage project.

The proposed new pipeline is already drawing opposition from Coastal First Nations, while chiefs gathered in Ottawa Tuesday for the Assembly of First Nations’ annual December meeting voted unanimously to urge Ottawa to scrap its energy deal with Alberta.

But views among First Nations that would be directly affected by a potential new line from Alberta to the northern coast of B.C. are unlikely to be uniform.

Martineau said the new pipeline project could involve one or more private proponents and potentially dozens of Indigenous groups. The Crown corporation has had some practice managing large deals, including

Enbridge Inc. ‘s massive $1.12-billion sale of an 11.6-per-cent stake in seven Athabasca-region pipelines to a partnership of 23 First Nations and Métis communities.

“It’s never easy, Martineau said. “You’re always going to have dissenting voices at the table.”

Alberta’s proposed pipeline would potentially be a first for Canada, she said, with Indigenous communities brought in as owners from the start, rather than consulted later or offered equity after the fact.

“I would love to see Indigenous people fully at the table, participating in a way that they haven’t before,” said Martineau, who comes from Frog Lake First Nation in northern Alberta and who has worked in finance for 30 years, including corporate board roles at Cenovus Energy and Alamos Gold.

“When the proponent is ready to bring us in, we will be there. When the communities are ready to bring us in, we will be there. But we haven’t been involved yet.”

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Before a pipeline project can advance, a new industrial carbon-pricing agreement will have to be hammered out with Ottawa by April 1, and the province is seeking independent modelling on what the minimum carbon credit price should be, Smith said earlier this week.