With TMX Enabling Record Oil Production, First Nations Are Hoping for a New Chapter

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FORT MCMURRAY, Alta. – Some indigenous communities in northern Alberta hope the Trans Mountain pipeline expansion will mark the start of a new chapter in their relationship with Canada’s oil sands industry.

The $34 billion pipeline project from Alberta to British Columbia’s coast promises improved access to export markets for oil sands producers, who are expected to hit record production this year.

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The pipeline’s expected May 1 opening is a big deal for the Fort McKay First Nation, located about an hour’s drive north of Fort McMurray and home to about 800 people of Dene, Cree and Metis descent.

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“It’s important to the Fort McKay First Nation. “When there’s an opportunity like the Trans Mountain Pipeline, the question is, ‘How can we actually leverage it to bring that opportunity to Fort McKay?'” Chief Raymond Powder said in an interview.

“Because I’ve shared that with my industry partners around the table from time to time – I’ve said, ‘You know, if you guys want to grow and expand and so on, that’s not a problem for us.'”

But Fort McKay also needs growth opportunities as the industry expands, he said.

Located in the middle of the Athabasca oil sands, Fort McKay is the bull’s-eye on the dartboard of the world’s third-largest crude oil deposit.

The First Nations community is surrounded by industrial development and the acrid smell of nearby oil sands facilities can be felt in the breeze. Band members like to point out the black, tarry-smelling earth that lines residents’ streets and driveways here – evidence of the rich bitumen deposits that lie so close to the surface.

At Fort McKay, the oil sands industry’s complicated relationship with indigenous peoples becomes clear. The First Nation is one of the richest in the country, thanks to revenue from impact-benefit agreements with oil sands developers as well as the many state-owned companies that serve the oil and gas sector.

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Because of these ancillary benefits, the community boasts a beautiful long-term care center located directly on the Athabasca River, a world-class arena, a virtual golf course, and other amenities not typically found on reservations.

But Powder is quick to point out that his community’s relationship with the industry hasn’t always been so rosy.

“If you look back at the history of Fort McKay, we didn’t have a good relationship with the industry at first because we were First Nations and our identity was tied to the land,” he said.

Fort McKay also currently has significant concerns about the safety and environmental impacts of the region’s vast oil sands wastewater tailings ponds.

“And so the arrival of industry had a huge impact on our own traditional livelihoods and way of life,” Powder said.

“But the positive thing about all of this is that we have had the opportunity to expand our programs, our services and our infrastructure.”

Not all First Nations view their industrial neighbors this way.

Eriel Deranger is a member of the Athabasca Chipewyan First Nation, which is currently suing the Alberta Energy Regulator after a series of toxic tailings spills at Imperial Oil’s Kearl oil sands facility.

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She is also executive director of Indigenous Climate Action, an advocacy group addressing the water, air and health impacts of the tar sands on First Nations communities.

Deranger describes the relationship between indigenous communities and the oil sands industry as an “economic hostage situation,” explaining that many communities see the negative impacts of oil sands extraction but do not speak out because there are no other economic opportunities.

“It’s really important that we don’t get bogged down in the argument of, ‘Well, if Indigenous peoples are business partners driving these projects, then they must be doing well,'” Deranger said.

“The problem is that this industry has such an economic stranglehold. But we can’t continue to say we need this for our economy because there will be no economy if our province burns down this summer due to wildfires caused by climate change.”

Oil sands development has historically been a double-edged sword for Indigenous communities, said Justin Bourque, former CEO of the Willow Lake Metis Nation and president of Fort McMurray-based Asokan Generational Developments, a consulting firm that focuses on Indigenous industry partnerships Industry specialized.

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“Philosophically, the resource was extracted from the traditional territories of the indigenous peoples in the region. They have witnessed and endured the development, both environmental and physical, and the growth of Fort McMurray,” Bourque said.

However, looking forward, Bourque sees growing opportunities for First Nations to participate in the oil and gas sector as equity ownership models become more common and allow communities to benefit from long-term, predictable revenue streams.

“I think that given reconciliation and certain ESG factors, companies are now thinking more openly about having a long-term relationship with indigenous communities when and where they operate,” Bourque said.

He also pointed to the federal government’s recent announcement that it will offer $5 billion in loan guarantees to help indigenous communities seek ownership interests in natural resources and energy projects.

“I think it will be a hugely positive catalyst that will allow these communities to become much more active in the industry, which will only make the industry stronger.”

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Last month, the Fort McKay First Nation entered into a memorandum of understanding with Suncor Energy Inc. for an oil sands lease development opportunity on its reserve lands.

While Suncor is still assessing the quantity and quality of mineable bitumen in the region, if the project goes ahead, it would be the first oil sands production on reserve lands in Canada.

Powder said the agreement represents a new path for economic development on Indigenous lands and will help secure the community’s long-term future.

“It’s a pretty big deal and actually a great accomplishment,” Powder said, adding that the deal will mean Fort McKay will grow with it as the oil sands industry grows in the coming years.

“We don’t want a cap on what Fort McKay can do when it comes to industry and the spin-offs of what the Trans Mountain pipeline has to offer,” he said.

This report by The Canadian Press was first published April 29, 2024.

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