Chana Martineau is inspiringly positive about Alberta’s energy sector. “Alberta continues to be the home of abundant, high-quality reserves of natural gas, natural gas liquids, oil and oil sands. And a key factor is that the responsible development of natural resources is a high priority for the Government of Alberta.”
With more than 30 years of extensive and diverse experience in the financial services sector, Martineau is the dynamic and high-achiever CEO of the Alberta Indigenous Opportunities Corporation (AIOC), which is committed to bridging the gap between Indigenous groups seeking partnerships in major projects and the financing they need to bring those projects to life.
Of course it gets complex and complicated, invariably woven with fine print and details, but the purpose and basic bottom line is clear and succinct: the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and the requirement of free, prior and informed consent from Indigenous groups.
She is a strategic and realistic leader, acknowledging that working with partnerships in major energy projects has many positives, as well as some challenges.
“From an Indigenous perspective, one of the most significant positives in Alberta’s oil and gas sector is the growing recognition of the importance of Indigenous inclusion and equity ownership,” she explains. “Indigenous communities are no longer being approached solely as stakeholders. They are recognized as true partners. And that is a meaningful shift, and one that AIOC is proud to support and accelerate.
“But we don’t kid ourselves, and overlook some ongoing challenges. It is always difficult to have an uncertain investment climate, whether that is due to recent uncertainty regarding cross border tariffs, or whether it is due to emissions regulations or unclear fiscal policy with respect to energy transition investments.”
She cites the example that First Nations and Métis groups continue to face barriers in funding acquisitions that would enable them to be long term equity partners and to receive ongoing, meaningful cash distributions from such acquisitions. “Indigenous communities would love to make investments and be long term partners in the new economy, but they also want to catch up in terms of their participation in the existing economy.”
Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers (CAPP), the non-partisan, research-based industry association that advocates on behalf of energy sector member companies that explore, develop and produce oil and natural gas throughout Canada, underscores that: “Indigenous partnerships and participation are integral to the success of the oil and natural gas sector in Canada. The industry has made great strides toward developing strong relationships, pursuing meaningful engagement and sharing the benefits from resource development over the past two decades.”
She adds that working collaboratively with Indigenous communities and businesses, the oil and natural gas industry supports economic reconciliation and prosperity for generations to come.
“Our industry is one of the largest employers of Indigenous peoples in Canada, with over 10,000 individuals of Indigenous descent making up seven per cent of the oil and gas workforce, well above the national average of 3.9 per cent. Indigenous-owned businesses also play a vital role in our supply chain. Approximately $765 million was spent between 2018 and 2021 in B.C.’s natural gas supply chain with 135 Indigenous-affiliated businesses throughout Canada.
“Equity ownership in energy assets is also growing rapidly. Since 2017, Indigenous communities have acquired more than $6 billion in equity stakes in projects such as pipelines, tank farms, power plants and LNG terminals.”
She emphasizes some recent Indigenous partnership achievements in Alberta’s energy sector.
Like Suncor’s East Tank Farm and Enbridge’s Athabasca Pipeline, as well as equity stakes in power projects like Tamarack Valley’s Clearwater and the Cascade power plant. Indigenous communities are also leading or investing in major LNG initiatives such as Cedar LNG, Ksi Lisims LNG and the Prince Rupert Gas Transmission project. Along the Coastal GasLink corridor, several Indigenous communities have jointly acquired an equity stake.
Martineau also shares some examples of Indigenous opportunities and positive achievements.
“We see a sector that continues to benefit from the efforts of high quality, strong operators that know how to responsibly and efficiently explore for and develop natural resources. The growth in egress options for Western Canada’s natural resources through TransMountain Pipeline and through LNG Canada is also very encouraging. We see a future that is increasingly defined by Indigenous ownership and participation.”
She points out that it is a matter of meaningful reconciliation and it is also smart business.
Indigenous equity partners bring a long-term view, a connection to the land and a vested interest in responsible development. They are essential players in the future of Alberta’s resource economy.
Both AIOC and CAPP are practical, realistic and gung-ho about the opportunities and the impact of Indigenous participation in Alberta’s energy sector. But Martineau and Baiton are also experienced, pragmatic and blunt that although the situation is moving forward toward its goals, as in most aspects of life, everything is not always rosy.
Martineau points out that as with any sector, trust is always an ongoing area for improvement for all parties involved. The nice thing about equity investments, if done well, is that they aid in building trust and relationships between industry and the First Nations and Métis groups. They also help build relationships between individual Indigenous communities as they work together to successfully make joint investments.
“One obstacle is that some companies still do not see the need and/or benefit for economic reconciliation through equity investments in their existing assets or future assets,” she says. “So, we continue to think about how we can best encourage parties to explore the merits of such investments. Another obstacle is the lack of capacity by First Nations and Métis groups to execute such transactions. But their capacity is growing with each investment that is pursued and with the support of capacity grants provided by AIOC to help them obtain qualified advisors.”
An additional speedbump is the fact that borrowing capital can be expensive and complicated. Martineau explains that for many First Nations and Métis groups, traditional debt financing comes with relatively high interest rates as well as some burdensome conditions.
“And Indigenous groups often have the funds to provide for the equity component of an acquisition. It is also an important way how AIOC helps, by providing loan guarantees backed by the Government of Alberta that enable Indigenous communities to borrow funds to fund the equity portion of an acquisition. Also, in certain situations, it can lower the financing costs on borrowings to fund the debt portion of an acquisition.
“We work closely with industry partners, Indigenous communities and lenders to de-risk financings and ensure acquisitions and projects can move ahead,” she says. “But, we would like to see more proactive outreach from industry players.”
Chana Martineau admits there is room for improvement when it comes to building genuine partnerships with Indigenous communities, especially early in project planning stages. “The willingness is growing, but it needs to become standard practice.”
CAPP’s Lisa Baiton is gung-ho about the present and the future of Indigenous opportunities and partnerships. “Looking ahead, ensuring access to opportunities for Indigenous communities through responsible resource development remains a priority. For CAPP, as for industry, it makes good business sense to develop positive relationships with neighbours, working toward partnerships support the advancement of economic self-determination and reconciliation in a meaningful way, creating lasting prosperity for both Indigenous communities and all Canadians.”
Article originally published by Business of Energy. Read it here.