Reconciliation or Wreckonciliation? The curse of Indigenous pipeline ownership

Handing out smallpox blankets: the 2020 edition

With the price of oil falling drastically and the prospect of reaching new markets in China fading, the promise of continued economic prosperity based on tar sands bitumen is turning sour. 

Kinder Morgan, one of the biggest fossil fuel corporations in the world, saw the writing on the wall and ditched their Trans Mountain Expansion (TMX) project in spring of 2018. The pipeline was bought for $4.5 billion a week later by Canada’s federal government. Now, between Indigenous lawsuits and rising construction costs, it’s become clear that the Canadian government bought a lemon. Now they’re trying to sell a bitter deal on to Indigenous Peoples under the Orwellian concept that TMX will be “A Pipeline to Reconciliation”. 

“You can’t make this stuff up,” says Winona LaDuke, Anishinaabe writer and economist and founder of Honor the Earth.  “Dressed up as “equity positions”, or “reconciliation”, across the continent, corporations and governments are trying to pawn off bad projects on Native people.”

The money, the money, the money

The Parliamentary Budget Officer estimates that the existing Trans Mountain pipeline, built in the 1960s and currently moving diluted bitumen across B.C., is valued around $3.6 billion and $4.6 billion. As such, the Government paid retail for a 60-year-old piece of infrastructure in an effort to appease the oil and gas industry. Kinder Morgan was  only too happy to make the deal: remember, PBO’s financial valuation assumes that the pipeline is built on time and on budget. In reality, construction delays have pushed the project completion date back to 2023, with costs rising monthly. 

Then there’s the cost of twinning the pipeline, and building out a marine shipping terminal at Westridge in Burnaby. Those costs have been forecast to cost roughly $9 billion on top of the $4.5 billion already shelled out by Canadian taxpayers. First Nations are being offered an ‘equity stake’ in a project no-one knows the value of, to own a leaking and decrepit pipeline and an expansion that — if climate-savvy opponents of the project have anything to do with it — may never happen.

Then there’s the interest payments: pipeline owners can expect to pay somewhere between $149 and $249 million annually to cover interest on bonds drawn to pay for TMX. 

That’s a lot of money, which will need to be paid out for years before any returns ever flow to TMX investors. It’s not hard to speculate how clever petroleum executives could have asked themselves: “why not send that debt over to the First Nations?” 

The cynicism of dressing those shackles up as golden opportunities is not lost on some Indigenous leaders. Rueben George of Tsleil-Waututh First Nation has called the concept of Indigenous pipeline ownership “a new smallpox blanket,” for both the debt it would saddle Nations with and the harm to communities the pipeline and tankers project will inflict.

“If these First Nation do their due diligence they would not invest. Kinder Morgan understood it’s a bad deal and would not be built. So Trudeau is selling economic smallpox.”

In an era where our Prime Minister has made potable water on reserves ‘mission critical’ (which he has yet to deliver on), it is unconscionable that we would even considera state-owned project that threatens to destroy the aquifer of Coldwater Indian Band, who are just one of three Nations in court fighting the project. So dizzying is Canada’s spin on TMX, that now we’re being asked to accept that, somehow, desecration of sacred sites, destruction of fisheries, and jeopardizing public health, are all being done in the name of ‘reconciliation’. It’s madness to consider that Indigenous ownership of an asset destined to become stranded within a carbon bubble primed to burst* will somehow be beneficial to communities whose levels of poverty are already four times higher than the national average.

“With TMX what we have ended up with is a complete lack of transparency around what has become Canada’s largest fossil fuel subsidy,” said Kukpi7 (Chief) Judy Wilson of the Union of BC Indian Chiefs. “We need a complete accounting so we can have a full discussion around the billions of public dollars spent on oil infrastructure during a time when indigenous communities lack safe drinking water and critical work on reduction of carbon emissions is needed for a climate safe future.”

Says LaDuke, “There is no way that the “Sovereign Wealth and Reconciliation Fund”, dreamed of by the First Nations will have any money. Take it from me: by the time you all are done paying the interest and your financing, you’ll be deep into intergenerational debt servitude.”

Enbridge Northern Gateway: The Zombie Edition

Remember how people organized, fundraised, and donated to kick Enbridge out of northern BC? That first act of the Pull Together campaign engaged seven Nations in opposing an energy corridor from the tar sands to Kitimat. Now, Eagle Spirit Energy Corridor envisions building two 48-inch oil pipelines, with the first phase of the project costing $12bn. Bill C-48, banning tankers from the north coast, makes such a proposition tricky, but only look to our southern neighbours to see what regulatory havoc is possible under industry-friendly regimes. According to Petroleum Today, “A Scheer premiership would be likely to swiftly throw out the crude tanker ban—and probably gut the Trudeau government’s natural resource regulatory reform not long thereafter.”

The Eagle Spirit Project claims to have support from 30 Nations along the proposed pipeline route. However, opposition from hereditary leadership of the Wet’suwet’en and Gitxsan Nations would present a significant barrier to the realization of the Eagle Spirit pipe dream. 

A Call to Action

Facing massive opposition from the grassroots and from Indigenous leadership along the pipeline route, with a Federal Court of Appeal challenge underway, and a Supreme Court challenge pending, there is no way TMX is going to be built. 

As Winona LaDuke eloquently explains, “Reconciliation and justice don’t mean saddling more liability on First Nations. Reconciliation would have been to pay those First Nations a royalty for all the oil which has passed through their territories over the past decades. Reconciliation would mean infrastructure for people, not for oil companies; like potable water, renewable energy and peace.”


Support strategic Indigenous legal challenges to the TMX project here. 

*See the PBO report from January 2019.

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