Revenue sharing, Aboriginal rights questioned at Gateway hearing

It appears that Aboriginal groups and environmental organizations are not the only ones who believe that the Alberta government has given the go-ahead to Enbridge’s Northern Gateway Pipeline project.

In the first phase of questioning at the joint panel review of the project, counsel for Northern Gateway decided against questioning the Alberta government panel.

“Unlike the other governments, I believe the Government of Alberta has indicated that they’re supportive of the project as opposed to simply being neutral on the project and so we’re not entitled to cross-examine the Government of Alberta and wouldn’t intend to do so,” said Richard Neufeld.

Neufeld declined to question government panel members Dr. Harold York and Christopher Holly, who made their first appearance on Sept. 25.

York was accepted as an expert to speak to petroleum refining, transportation and markets, while Holly is the executive director of research and technology with Alberta Energy.

Ron Kruhlak, counsel for the province, said Neufeld’s assumptions were incorrect.

“I wanted to clarify that Alberta has not taken any position in direct support of this application. Alberta’s evidence recognizes the netback benefits associated with West Coast access, but it also has stated that it believes the JRP process is well suited to considering the potential impacts of a project and determining whether it’s in the public interest,” Kruhlak said the morning following Neufeld’s comment.

While Northern Gateway passed on questioning the government panel, the Alexander First Nation did not.

Caroline O’Driscoll, counsel for Alexander, which has been granted intervener status, took the government to task for not specifically taking First Nations into account when either forecasting oil production or considering the direct economic benefits.

O’Driscoll pushed York on the factors that were used to determine crude production. In a report from Wood Mackenzie, conducted on behalf of the province, the availability of labour, equipment and natural gas were noted as contributing factors for oil sands development.

 “Is Wood Mackenzie concluding then that Aboriginal rights issues have no impact on operator’s decisions to redefine their oil sands portfolios?” O’Driscoll asked. “How then are you addressing Aboriginal rights in your findings and in your forecasts?”

“We have included what we believe are reasonable commercial and economic issues but we have not directly taken into account Aboriginal rights,” York said.

While Aboriginal rights were not addressed in the well head production economics, the government did recognize the potential impact “those sorts of issues” could have on the forecast of production, he said.

O’Driscoll wanted to know if forecasts for oilsand production specifically included First Nations approval.

York said he “presumed” sanctioned projects had regulatory approval, which would include First Nations approval.

The forecast for production also includes expansion for upgraders. York said a number of upgraders were considered, but not the Alberta First Nations Energy Centre, which “appears to us to not be moving forward on a development basis at this point in time.” He also said there was not enough data to make a ruling on the commercial viability of AFNEC.

O’Driscoll questioned the panel about whether royalties had been allocated to Alberta First Nations and whether revenue sharing arrangements had been made with the First Nations.

 “We didn’t file any evidence in terms of where those royalties go, how they are calculated or anything of that nature,” Holly said.
In previous questioning, when the JPR began its hearings in Edmonton earlier in the month, O’Driscoll pushed Northern Gateway Pipeline representatives on the issue of revenue sharing with First Nations.

 “What we have modelled are the revenues which go to the provincial government and the revenues that go to the federal government. We have not made any assumptions about what happens to those revenues. Some may well be earmarked for particular Aboriginal initiatives … but we don’t have that level of detail to know …,” said Dr. Robert Mansell, member of the Northern Gateway panel.

John Carruthers, also with the Northern Gateway panel, said that Aboriginal communities would benefit from the project as the company has targeted close to $1 billion to be used for procurement, training, jobs and community investments.

“They incorporate equity…. So they are significant…,” he said. “Our intention was to align the interests and create opportunities for Aboriginal communities.”

Because of the complexity of the Northern Gateway Pipeline Project application, the hearings have been divided into volumes, with different hearing locations set aside to discuss specific aspects of the application.

“These hearings in Edmonton … are to discuss the economic need, the potential impacts of the proposed project on commercial interests and the financial and tolling matters,” said JRP chair Sheila Leggett.

About a dozen other Alberta First Nations along with Métis representatives have been granted intervener status.
Approximately 20 First Nations, tribal councils and Métis representatives from British Columbia have also been granted intervener status. The panel’s next stop is in Prince George, BC, for 21 days of hearings.