Chair, Fred Carmichael Shares Thoughts About the Pipeline

Community consultations on a proposal to bring Mackenzie Delta natural gas to southern markets have begun in the Northwest Territories. As a longtime northerner, it reminds me of the Berger Inquiry.

But this time, northern Aboriginal people are at the planning table. In a sense, we are now wearing two hats. One hat we wear identifies our traditional role as guardians and stewards of the land. The other hat represents our emerging role as business opportunity developers.

We will share in the ownership and benefits of the proposed Mackenzie Valley gas pipeline. This is guaranteed as part of the Memorandum of Understanding between the Producers Group and the Aboriginal Pipeline Group. We will participate in the definition of the Mackenzie Gas Project. We are participating in project studies and we will put our traditional knowledge to work in ways that will benefit everyone.

Through the Aboriginal Pipeline Group (also known as the Mackenzie Valley Aboriginal Pipeline Corporation), Aboriginal northerners are now in a position to maximize both ownership and benefits of a Mackenzie Valley natural gas pipeline. But that doesn't mean we are any less concerned about the protection of our land. We strongly believe in the land. I was born in Aklavik and raised on a trapline. My elders taught me to respect our traditional lands. From the Delta to the Deh Cho, Aboriginal northerners are united in our commitment to protect the environment. We have responsibility to the Creator and to future generations. Protecting the land is a top priority.

We also have a responsibility to develop an economic base for our children and grandchildren. I lived in a tent as a teenager. I know what it is like to chop wood and haul it by dog team. But my grandchildren will never make their living from the land. That part of our world has changed forever. That's why I am determined to take advantage of the economic opportunities that controlled, responsible resource development will bring.

We have seen too many projects come and go that didn't benefit our people. Often, most of the workers and businesses came from the south. Sometimes we weren't ready - our people didnÕt have the training and the business resources to be involved. Too often, we spent so long talking or arguing about how to do it, that the opportunities passed us by. We are not going to let that happen this time. We are united in our desire to maximize the benefits of a pipeline.

We can clearly see that if a pipeline will be built in the next few years, we need to get ready now. Our people need to make choices about the training they need and the businesses they need to create. But we also know that while it takes a lot of people to build a pipeline, it doesn't take many to operate it once it is in place. So we need to take a broader view of the opportunities that could be available. We are interested in the long term.

We need to develop qualified workers in other occupations. The North is rich in resources and many of our people are already helping to develop them. In the long term, there will be a lot of work in supplying services to oil and gas producers and explorers. There's also a lot of work in mining. Diamonds and metals provide many opportunities. In some areas the forestry is also important. And all across this vast territory there is great potential for tourism. We want to ensure that our people will have ongoing employment and business opportunities after the pipeline is built.

To take advantage of these opportunities we need to work together as Aboriginal people and as northerners. We will need more than training and business planning. We need to strengthen social and family programs that support people working outside their home communities for extended periods of time. We need to ensure financial support for emerging businesses. And we need to share information generously and promptly so that all northern people can get ready.

The benefits that can be created through the construction of a Mackenzie valley natural gas pipeline are huge. That's why we are at the table. It may get confusing wearing two hats. But better two hats than none.

About The Author: Fred Carmichael is Former President of the Gwich'in Tribal Council and the current Chair of the Aboriginal Pipeline Group.

 President, Bob Reid on why the APG is a great deal for future generations

Just over 20 years ago, Interprovincial Pipe Lines (now Enbridge) planned to construct a pipeline from Norman Well, NWT to Zama, Alberta.

Interprovincial offered aboriginal communities along the route a 10 percent stake in the pipeline, but aboriginal leaders of the day felt that wasn't enough and held out for more. Interprovincial refused and the pipeline went ahead without any aboriginal ownership. Aboriginal companies were awarded some contracts during construction, but there were no long-term benefits for the aboriginal communities. Today, estimated earnings from the ownership refused by those aboriginal leaders would have amounted to nearly $30-million.

History will not repeat itself with the proposed Mackenzie Valley pipeline, due to the foresight of today's aboriginal leaders. The Aboriginal Pipeline Group has fought for and won the right to secure a one-third interest in the Mackenzie Gas Project - an exceptional deal for Mackenzie Valley aboriginal groups. Ownership means APG can sit at the board table of the Mackenzie Gas Project and can directly influence the pipeline's development. And from the first day that natural gas flows through the pipeline, the APG will deliver significant dividends to its aboriginal stakeholders - dividends that will continue for many years to come.

The idea for APG started with the January 2000 aboriginal leaders meeting, called by Chief Harry Deneron in Fort Liard, and it was formally established in Fort Simpson in June 2000. Its mandate was to maximize the long-term financial returns to aboriginal people through ownership in the pipeline. By June of 2001, APG negotiated a memorandum of understanding with the Mackenzie Delta Producers Group that provided for a one-third interest in the Mackenzie Valley pipeline. In June of 2003, APG negotiated an enhanced deal that brought funding from TransCanada Pipelines, the Delta Producers, and the federal and territorial governments.

We are now focussing on arranging the long-term financing needed to support our ownership position, loans that will be repaid from our share of revenue from the pipeline. APG ownership and dividends will increase as more gas flows through the pipeline. At the beginning, when the amount of gas going through the pipeline is estimated to be at least one billion cubic feet per day, APG can pay annual dividends of about $12.5-million per year. As the amount of gas going through increased to 1.5 billion cubic feet per day, dividends increase to more than $21-million per year. Once the loans are repaid, dividends could be as much as $100-million per year.

These very significant dividends will be distributed according to pipeline distance through each aboriginal region to those groups that have formally joined the APG, currently the Gwich'in, the Inuvialuit and the Sahtu. We have an open invitation to the Dehcho, but they have indicated that their land claim and self-government initiative - the Dehcho Process - remains their priority. I am optimistic that they will recognize the significant benefits available to them - based on the length of pipeline through Dehcho lands, they could earn more than one-third of the total annual dividends.

Benefits of long-term ownership through the APG are in addition to other benefits, such as land access and benefits agreements, arising from the pipeline. The Mackenzie Gas Project must negotiate these agreements separately with each landowner along the pipeline route before it can construct or operate the pipeline. On aboriginal lands, the land claim settlements, where applicable, establish guidelines for land access fees and permits. APG is not involved in these negotiations but we have encouraged both the federal and territorial governments to provide consistent funding assistance to aboriginal groups to ensure that these negotiations take place on a level playing field. The APG supports the timely and realistic successful negotiation of these agreements.

This is a chance to change the way things have been done in the North. Aboriginal groups no longer have to stand by and watch resource developments take place. Through APG, they can play a meaningful role in making it happen and can share in the long-term dividends - an exceptional deal for future generations.

About the Author: Bob Reid is the President of the Aboriginal Pipeline Group. He is best known for his 33 year career at TransCanada PipeLines, where he served as President, Energy Transmission, and as Senior Vice President, Northern Development, responsible for implementing a plan to access frontier supplies of natural gas.

Reid holds a Bachelor of Science degree in Electrical Engineering from the University of Saskatchewan, and a Master of Applied Science degree in Management Science from the University of Waterloo.

He has been a keynote speaker at numerous industry conferences and seminars.