In a historic agreement, TC Energy — owner of the existing Keystone pipeline and proponent of the Keystone XL (KXL) pipeline expansion — announced it will sell equity interest in the project to a group of five First Nations in Canada, totaling about 12 per cent of the project.
The agreement will see Natural Law Energy, which represents Indigenous groups in Alberta and Saskatchewan, purchase a $1.1 billion equity stake in the cross-border pipeline expansion project. TC Energy is continuing to work with other Indigenous groups on both sides of the border.
Increasingly, Indigenous groups are stepping up to participate in energy projects, through a variety of means from agreements for community investment to direct equity involvement. Recent examples include Cedar LNG, a project on Canada’s west coast owned by the Haisla Nation, and numerous agreements associated with the Trans Mountain Expansion (TMX) project.
In addition, the KXL agreement signals strong alignment between the project and objectives of both the Canadian federal government and the incoming Biden Administration in the U.S. Canada’s oil producers continue to reduce per-barrel emissions intensity, fresh water use and address other environmental issues, with world-leading environment, social and governance (ESG) performance. The project is also vital to post-pandemic economic recovery in both countries. However, during the U.S. election campaign in 2020, president-elect Joe Biden publicly stated he would rescind permits and approvals for the project.
KXL is designed to ship 830,000 barrels of oil per day from Alberta’s oil sands to Steele City, Nebraska, where it would connect with TC Energy’s existing pipeline network and ultimately move oil to U.S. Gulf Coast refineries — many of which are configured to refine heavy oil such as Western Canada Select. As availability of heavy crude oil from other sources such as Venezuela and Mexico declines, those refineries will require larger volumes from Canada, which has high standards for environmental performance.
In a statement, Alberta Premier Jason Kenney commented, “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. This historic agreement serves as a model of how to build strong and trusted partnerships between industry and Indigenous groups for a safe, secure and prosperous energy future.”
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Indigenous groups back Keystone XL with historic equity agreement
KXL is aligned with climate and Indigenous prosperity goals, despite apparent opposition from incoming Biden Administration.