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First Nations join Keystone XL pipeline
Five Indigenous communities plan C$1 billion equity investment in disputed line, promise to put environment at top of decision making Gary Park for Petroleum News
TC Energy has played what is widely viewed as its ace card in the Keystone XL gamble.
Ending a prolonged period of speculation and rumors, the Calgary-based pipeline giant has announced that a group of five Canadian First Nations has signed a deal to make an equity investment of up to C$1 billion in the shaky US$14.4 billion project.
The Indigenous-owned Natural Law Energy, NLE, representing three nations in Alberta and two in Saskatchewan, said it has until September 2021 to secure financing.
TC Energy said it will use similar ownership models in hopes of attracting additional First Nations along the pipeline route in Canada and the United States.
NLE Chief Executive Officer Travis Meguinis said that, although facing numerous legal actions in the U.S. and Joe Biden’s threat to shred a key presidential permit for the project if he moves into the White House, the deal could play a vital role in gaining support for KXL not least because NLE has a “lot in common” with Biden.
He said NLE can ensure that KXL and projects like it “will be built with the protection of the environment at the forefront of every decision.”
Alberta hails arrangement Alberta Premier Jason Kenney hailed the NLE arrangement as a model of how to build “strong and trusted partnerships between industry and Indigenous groups” to generate jobs and wealth for the aboriginal communities.
“As stewards of the land, air and water, First Nations project partners will help ensure that Keystone XL - and projects like it - continue to be built with the protection of the environment at the forefront of every decision,” he said in a statement.
James Coleman, a noted expert on pipeline law and a professor at Southern Methodist University in Dallas, said KXL still has to negotiate a daunting road, given Biden’s campaign pledge.
But he conceded that TC Energy is making headway by building a “broad coalition: of moderate Democrats, labor union groups and Indigenous communities to back the project.”
He told the Calgary Herald that the big question now is “whether that moves the needle for Biden or if he sticks to his guns to stop the pipeline. The odds are against them … but you don’t stop playing.”
Green-energy training program To bolster its case, TC Energy has formed a green energy-training program to prepare union workers for future renewable energy jobs.
Hal Kvisle, a former CEO of TransCanada (the predecessor of TC Energy), said he hopes the next U.S. government “will wake up to the reality that North America still needs the oil (from KXL) and the U.S. refining venter needs heavy crude. The best place they can get it is from Canada.”
TC Energy Executive Vice President Bevin Wirzba noted that by 2040 crude production in Western Canada is expected to displace about 1 million barrels per day of U.S. Gulf Coast imports from countries with a “poorer” environmental, social and corporate governance record than Canada.
He said TC Energy has been “repositioning” KXL in an attempt to gain more widespread support in the U.S. after more than a decade of delays.
But Dennis McConaghy, one of the original executives responsible for KXL, said it is “still going to be extremely difficult to get a Biden administration to support completion” of the pipeline.
He said Indigenous ownership and union backing would help “at the margins,” although he believes Biden would use an executive order to scuttle KXL and notch a climate win.
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