Alberta
INDUSTRY-INDIGENOUS RELATIONS: A TREND TOWARD DEEPER ENGAGEMENT
INDUSTRY-INDIGENOUS RELATIONS: A TREND TOWARD DEEPER ENGAGEMENT
The Canadian oil and natural gas industry has a strong history of engagement with Indigenous peoples. Since its early initiatives, the petroleum sector has had many learnings and opportunities for growth with respect to its interactions with Indigenous communities. Consequently, these relationships have evolved towards ever-deepening forms of engagement including consultation and business partnerships. However, the nature of these relationships has been difficult to communicate with credibility; arrangements between companies and communities are often confidential, thus limiting the ability of industry to share positive stories of engagement.
The Canadian Association of Petroleum Producers (CAPP), an association that represents Canada’s oil and natural gas producers, has utilized multiple surveys of its members in order to better understand the relationship between industry and Indigenous peoples. One of these surveys, known as the Telling Our Story survey, was commissioned by CAPP and conducted by Dr. Ken Coates of the University of Saskatchewan. Additionally, CAPP developed its own survey focused on procurement, community investment and consultation capacity funding in the oil sands. These surveys provide data that demonstrate the value producers place on building long-term, sustainable relationships with Indigenous communities. In particular, economic engagement is viewed as a primary opportunity to establish good relations and support Indigenous self- determination.
Survey Methodology
The purpose of the Telling Our Story survey was to collect information about the oil and natural gas industry’s efforts to engage Indigenous communities. Research was conducted by Dr. Ken Coates, Canada Research Chair in Regional Innovation at the Johnson-Shoyama Graduate School of Public Policy, University of Saskatchewan. Dr. Coates used a comprehensive survey of industry representatives, in partnership with CAPP, plus CAPP’s member companies and partner associations including the Canadian Council for Aboriginal Business, the Petroleum Services Association of Canada, the Canadian Energy Pipeline Association, and the Canadian Association of Geophysical Contractors. A total of 122 companies participated in the study, representing a cross-section of the oil and natural gas industry in Canada. Data was collected in a confidential manner, anonymized and aggregated into a final report. The survey highlighted key themes related to industry’s engagement with Indigenous communities.
Consultation and Community Engagement
Companies within the oil and natural gas industry have developed long-term relationships with communities, and these relationships are multifaceted. Of course, a core aspect of relationship-building takes place through consultation processes. The trend toward consultation accelerated in 2004 with the Supreme Court of Canada decision on Haida Nation v. British Columbia, which determined the Crown has a duty to consult and accommodate Indigenous peoples when making a decision that could affect their constitutional rights. Procedural aspects of this duty can be delegated to industry, and now industry conducts the majority of project consultations. Survey respondents noted that today, companies are actively engaged in this process, seeking to ensure meaningful, two-way discussion in consultations. CAPP members indicated that they view these relationships formed through consultation as critically important to their business. Many companies have teams of staff dedicated to consulting and building relationships with communities, and funding is often provided to support community capacity to engage in consultations. A separate survey of CAPP’s oil sands members found that between 2015 and 2016, oil sands operators provided $40.79 million for consultation capacity funding to local Indigenous communities.
Associated with consultations are a variety of forms of engagement. CAPP’s members placed particular value on supporting various community activities, social and cultural priorities, and infrastructure needs. The aforementioned survey of oil sands members found that between 2015 and 2016 operators in the region spent $48.6 million on Indigenous community investment. According to companies, these focused investments positively impact relationships. Furthermore, there has been a trend toward the negotiation of long- term, collaborative agreements between project proponents and Indigenous communities in areas of operation that address community concerns and include clauses related to procurement, employment, community investment, dispute resolution, capacity funding and other topics of importance to the proponent and the community.
Economic Engagement
According to oil and natural gas producers, there is a strong emphasis on economic engagement as the priority in building relationships. In particular, procurement – the purchasing of goods and services from Indigenous businesses – presents a significant opportunity for mutual benefit. Both joint venture partnerships and preferential contracting arrangements with Indigenous-owned companies enable companies to build links and trust with communities. The focus on these arrangements is evidenced by substantial financial investment: in 2015 to 2016, oil sands producers spent $3.3 billion on procurement from 399 Indigenous owned- companies in 65 Alberta communities. While a sizable proportion of Indigenous businesses may be small or new, the data suggests their role in the sector will continue to increase.
This type of engagement allows Indigenous peoples to leverage their own expertise, build capacity, and ultimately establish pathways to prosperity. In this regard, industry can play an important role in supporting successful, self-determining communities. Although procurement was ranked most highly in terms of its benefit to the relationship between producers and communities, there are other forms of economic engagement; a number of companies have Indigenous recruitment strategies and support training programs intended to build the technical skillset of Indigenous employees and contractors.
Conclusion
The research commissioned by CAPP highlights the emphasis that oil and natural gas sector companies place on meaningful consultation, partnerships, and in particular, economic engagement. Industry has made strides in building deeper partnerships, and it is expected that the trend toward more meaningful engagement will continue. As an industry association, CAPP believes the oil and natural gas sector has an important role in tangibly advancing reconciliation together with Indigenous peoples in response to the Truth and Reconciliation Commission’s Call to Action 92. CAPP believes its role in reconciliation can be described as identifying and finding feasible ways to share economic opportunities arising from resource development, while continuing to learn, grow and improve strong relationships based on trust, respect, and open communication. Industry’s understanding will continue to develop, and the sector is open to further dialogue in order to inform its understanding of industry’s role in reconciliation.
Thanks to Todayville for helping us bring our members’ stories of collaboration and innovation to the public.
Click to read a foreward from JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President and CEO, Canadian Council for Aboriginal Business.
JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President & CEO, Canadian Council for Aboriginal Business
Click to read comments about this series from Jacob Irving, President of the Energy Council of Canada.
Jacob Irving, President of Energy Council of Canada
The Canadian Energy Compendium is an annual initiative by the Energy Council of Canada to provide an opportunity for cross-sectoral collaboration and discussion on current topics in Canada’s energy sector. The 2020 Canadian Energy Compendium: Innovations in Energy Efficiency is due to be released November 2020.
Click below to read more stories from Energy Council of Canada’s Compendium series.
PETER SUTHERLAND SR GENERATING STATION POWERS NORTHEAST ONTARIO
From the Canadian Energy Centre
By Will Gibson
Alberta oil sands projects poised to grow on lower costs, strong reserves
As geopolitical uncertainty ripples through global energy markets, a new report says Alberta’s oil sands sector is positioned to grow thanks to its lower costs.
Enverus Intelligence Research’s annual Oil Sands Play Fundamentals forecasts producers will boost output by 400,000 barrels per day (bbls/d) by the end of this decade through expansions of current operations.
“Existing oil sands projects deliver some of the lowest-breakeven oil in North America at WTI prices lower than $50 U.S. dollars,” said Trevor Rix, a director with the Calgary-based research firm, a subsidiary of Enverus which is headquartered in Texas with operations in Europe and Asia.
Alberta’s oil sands currently produce about 3.4 million bbls/d. Individual companies have disclosed combined proven reserves of about 30 billion barrels, or more than 20 years of current production.
A recent sector-wide reserves analysis by McDaniel & Associates found the oil sands holds about 167 billion barrels of reserves, compared to about 20 billion barrels in Texas.
While trade tensions and sustained oil price declines may marginally slow oil sands growth in the short term, most projects have already had significant capital invested and can withstand some volatility.
Cenovus Energy’s Christina Lake oil sands project. Photo courtesy Cenovus Energy
“While it takes a large amount of out-of-pocket capital to start an oil sands operation, they are very cost effective after that initial investment,” said veteran S&P Global analyst Kevin Birn.
“Optimization,” where companies tweak existing operations for more efficient output, has dominated oil sands growth for the past eight years, he said. These efforts have also resulted in lower cost structures.
“That’s largely shielded the oil sands from some of the inflationary costs we’ve seen in other upstream production,” Birn said.
Added pipeline capacity through expansion of the Trans Mountain system and Enbridge’s Mainline have added an incentive to expand production, Rix said.
The increased production will also spur growth in regions of western Canada, including the Montney and Duvernay, which Enverus analysts previously highlighted as increasingly crucial to meet rising worldwide energy demand.
“Increased oil sands production will see demand increase for condensate, which is used as diluent to ship bitumen by pipeline, which has positive implications for growth in drilling in liquids-rich regions such as the Montney and Duvernay,” Rix said.
“If Ottawa had it’s way Albertans would be left to freeze in the dark”
The ineffective federal net-zero electricity regulations will not reduce emissions or benefit Albertans but will increase costs and lead to supply shortages.
The risk of power outages during a hot summer or the depths of harsh winter cold snaps, are not unrealistic outcomes if these regulations are implemented. According to the Alberta Electric System Operator’s analysis, the regulations in question would make Alberta’s electricity system more than 100 times less reliable than the province’s supply adequacy standard. Albertans expect their electricity to remain affordable and reliable, but implementation of these regulations could increase costs by a staggering 35 per cent.
Canada’s constitution is clear. Provinces have exclusive jurisdiction over the development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. That is why Alberta’s government is referring the constitutionality of the federal government’s recent net-zero electricity regulations to the Court of Appeal of Alberta.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations. The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk. Our government will not accept unconstitutional net-zero regulations that leave Albertans vulnerable to blackouts in the middle of summer and winter when they need electricity the most.”
“The introduction of the Clean Electricity Regulations in Alberta by the federal government is another example of dangerous federal overreach. These regulations will create unpredictable power outages in the months when Albertans need reliable energy the most. They will also cause power prices to soar in Alberta, which will hit our vulnerable the hardest.”
Finalized in December 2024, the federal electricity regulations impose strict carbon limits on fossil fuel power, in an attempt to force a net-zero grid, an unachievable target given current technology and infrastructure. The reliance on unproven technologies makes it almost impossible to operate natural gas plants without costly upgrades, threatening investment, grid reliability, and Alberta’s energy security.
“Ottawa’s electricity regulations will leave Albertans in the dark. They aren’t about reducing emissions – they are unconstitutional, ideological activist policies based on standards that can’t be met and technology that doesn’t exist. It will drive away investment and punish businesses, provinces and families for using natural gas for reliable, dispatchable power. We will not put families at risk from safety and affordability impacts – rationing power during the coldest days of the year – and we will continue to stand up for Albertans.”
“Albertans depend on electricity to provide for their families, power their businesses and pursue their dreams. The federal government’s Clean Electricity Regulations threaten both the affordability and reliability of our power grid, and we will not stand by as these regulations put the well-being of Albertans at risk.”
Related information
- Conference Board of Canada socio-economic Impacts of Canada’s 2030 Emissions Reduction Plan – (April 2025)
- Alberta Electric System Operator’s position on Canadian Energy Regulations
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