Canada's Enbridge and First Nations Tribes - Allies or Implacable Foes?

Canada's Enbridge was sandbagged last year by the Obama administration's postponing a decision on the proposed Keystone XL pipeline, designed to ship Alberta's oil sands to U.S. refineries on the Gulf of Mexico, a project that was seemingly in the bag until a groundswell of environmental opposition blocked it.

Now shifting its focus, Enbridge is proposing its "Northern Gateway" pipeline, a pair of planned 731 mile-long 36-inch diameter pipelines costing $5.5 billion that would carry an estimated 525,000 barrels per day of so-called tar sands oil from Alberta fields in Bruderheim to the Canada's western port city of Kitimat on British Colombia's Pacific coast.

But the project has its detractors, most notably among a number of Canada's "First Nation" Indian tribes.

First Nations is a term that collectively refers to Canada's various aboriginal peoples except for the Inuit Eskimos and Metis. Canada currently contains over 630 recognized First Nations governments or bands spread across Canada, with nearly half of its 700,000 people in the provinces of Ontario and British Columbia.

So, the question for Enbridge is - how to bring the First Nations onboard?

Buy 'em off.

On 6 June Enbridge announced that it is offering aboriginal groups within 50 miles of the proposed Northern Gateway pipeline a 10 percent equity stake in the project, to be equally divided between British Colombia and Alberta groups via an offer which expired at midnight, 31 May. There are 45 First Nations along the direct pipeline route.

Enbridge Northern Gateway Communications  manager  Paul Stanway told the press, "We made it available to about 45 of the aboriginal communities along the right-of-way. "Almost 60 per cent of those eligible communities along the right-of-way have now signed agreements to be partners with us in ownership of Northern Gateway" before adding that the commitment by the First Nations is "a very good start" at obtaining broad social approval for the project. Dangling the prospect of big riches, Stanway stated that Enbridge estimates that over the next three decades, the First Nations' 10 percent stake would generate revenues of nearly $280 million.

Stanway however coyly declined to identify exactly which aboriginal communities have accepted the offer, nor did he identify them by region.

At least some First Nation tribes suspect Enbridge of speaking with forked tongue, however. Coastal First Nations is an alliance of 10 First Nations who oppose the project. The group's executive director Art Sterritt issued a statement accusing Enbridge of manipulating the facts before noting, "We have checked with all the First Nations along the pipeline route west of Prince George and only two First Nations have signed equity agreements."

Sterritt went on to observe that Enbridge expanded its compensation corridor to 50 miles precisely to boost the number of supporters and that many of the First Nations who have signed on the Northern Gateway agreement are accordingly conveniently located far outside of any area that could consequently be impacted by a potential spill. The Coastal First Nations includes the Wuikinuxv, Heiltsuk, Kitasoo/Xaixais, Nuxalk, Gitga'at, Haisla, Metlakatla, Old Massett, Skidegate and Council of the Haida Nation.

Interestingly, Sterritt noted that Enbridge also included the Metis in its tally of pipeline supports even though that aboriginal group doesn't have rights or title to land inside the corridor.

Adding to Enbridge's uphill PR struggle for hearts and minds, on 7 June up to 3,000 barrels of crude oil spilled into a tributary of the swollen Red Deer River near Sundre in west-central Alberta when a pipeline was breached, into an area of ranch land and relatively pristine wilderness that's popular with hunters and anglers. While the good news for Enbridge is that the pipeline was operated by Plains Midstream Canada, it and other pipeline companies will not be able to avoid being "tarred' with the same brush of public concern.

The public hearing process on the proposed Northern Gateway pipeline is roughly halfway complete and in September formal hearings will begin, with expert witnesses testifying under oath to the review panel.

While at this point few things are certain, it is obvious that Enbridge is going to have to spend a lot more wampum to make its case, and that it should expand its PR department to include some personnel more conversant with the truth, inconvenient as it might sometimes be, lest they set the impacted First Nations even more strongly on the warpath.

By. John C.K. Daly of Oilprice.com