Kitimat project could be worth more than $1b to first nations
COMMENT: In early April we criticised the provincial government for forking out $32 million to buy First Nations an equity stake in this pipeline. (link). It's bad on a number of important fronts:
- it is outside the treaty process, so it does nothing to effect reconciliation of previous insults to aboriginal title and rights, and does nothing to respect or improve the status of those rights in the future.
- it is just a payoff, a bribe, to those First Nations - the only citizens who have sufficient legal clout to stop the pipeline. We imagined a government agent slapping bills on the table until the First Nations couldn't say no.
- it runs contrary to the actions necessary to reduce BC's contribution of greenhouse gases. Natural gas today accounts for a third of the BC's total GHG gift to the world (about 60+ million tonnes each from the natural gas we produce, the coal we mine, and all of our other domestic activities.) and with ramp up of shale gas production, the natural gas component is scheduled to increase substantially. This pipeline will serve to move more of that gas to markets. Think of the $32 million as coming from the carbon tax and give your head a shake.
- it is completely opportunistic and non-strategic, accomplishing no social, economic or environmental goals for the province.
Scott Simpson
Vancouver Sun
April 30, 2009
Deal would inject more money into communities than the stalled treaty process
 An artist's rendering of the Kitimat LNG Terminal storage tanks, jetty and associated buildings on Haisla First Nation property at the deep sea port of Kitimat. (Handout illustration, Vancouver Sun) |
Some first nations stand to gain more than $1 billion in profits, taxes and business opportunities from a proposed liquid natural gas project in northern British Columbia, The Vancouver Sun has learned.
Proponents of a $4-billion project that includes a 463-kilometre gas pipeline and a liquefied natural gas plant at Kitimat are still ironing out final details of a landmark agreement among aboriginal groups, including Carrier Sekani Tribal Council and Haisla First Nation.
But the B.C. government has already committed $32 million on behalf of first nations who are seeking a 30-per- cent equity share of the pipeline as well as tens of millions of dollars in annual benefits when the liquefied natural gas (LNG) plant is built.
B.C. announced April 8 an accord with 16 first nations along the proposed route which would carry gas from northeastern B.C. to a new deep sea terminal at Kitimat. Once natural gas is turned into a liquid, it can be transported by ship to foreign markets, including Asia.
B.C.’s announcement, however, did not capture the true magnitude of the deal, according to spokesmen for Carrier Sekani and Haisla.
The deal takes place outside of the belaboured B.C. treaty process which has yielded a scant handful of treaties after spending $1 billion on lawyers, meetings and interim measures over nearly two decades of negotiation.
If the Kitimat project is successful, the cash it generates over 30 years for participating aboriginal governments will dwarf the amounts awarded in any of those treaties.
According to Carrier Sekani Tribal Chief David Luggi, first nations along the pipeline route could realize cash flows of $540 million to $553 million over the life of the deal.
They’re using $32 million from the province as an initial ownership stake in the line and are hoping the federal government will match that amount.
Both the pipeline and the LNG plant have environmental approvals from the provincial and federal governments, and proponents are currently in the process of booking capacity on the pipeline.
Greg Weeres, a vice-president with Pacific Northern Gas, which is developing the pipeline portion of the project, said the company “has yet to execute our definitive legal agreement with the first nations.”
“We are confident that there is more good news to come and we are just working at trying to coordinate when we may be able to execute those agreements,” Weeres said.
Luggi said that in order for the Carrier Sekani to fully participate in the project, they will seek investors to help finance a 30-per-cent share of the proposed pipeline.
He noted that Carrier Sekani pulled out of the B.C. treaty process two years ago after concluding a treaty would not provide sufficient benefit for future generations.
“A treaty is forever. This proposal is for three decades,” Luggi said, adding that an environmental accord with the pipeline’s developers is pivotal to the deal — including mitigating the impact that pipeline construction will have on traditional territories of Carrier Sekani bands along the route.
“This is resolving the proposed ongoing infringement of our title, and the cash flows in those three decades for all 16 first nations along the route would be in the range of $540 million to $553 million.
“The government is shifting our rights to investment in a company, in a proposal like this, for nation-building.”
The LNG plant would be situated on Haisla First Nation property at the Kitimat deep sea port.
Haisla Chief Steve Wilson said his people could receive up to $4 million annually in lease payments and $14 million to $18 million per year in property taxes. The Haisla are also seeking a marine transportation contract worth $12 million a year, he said.
“This has nothing to do with treaty. It is a business deal,” Wilson said. “When it comes to reconciliation of rights and title issues, this shows it’s possible to enter into [business] agreements that reconcile interests.
“What this does is set the foundation for our business community. It allows us to start building our own internal economy.”
The chiefs made their comments in interviews during a recent visit to Vancouver.
B.C. Energy Minister Blair Lekstrom said that the deal shows the progress B.C. has made in shaping negotiations among first nations, industry and the province towards economic development benefitting all residents of the province.
Read Scott Simpson's energy blog here.
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