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Northern Pipeline Allowed Despite Native Land Claims

- reprinted from Globe and Mail

SASKATCHEWAN INDIAN      MAY 1981      v11 n05 p17  

The National Energy Board has approved the construction of an oil pipeline along the Mackenzie River, even though native groups say no line should be built in the North until land claims are settled.

In a 193-page judgement that apparently flies in the face of the 1977 Berger report on northern pipeline development and the board's own decision on a northern pipeline three years ago, the NEB told Inter-provincial Pipe Line (NW) Ltd. that it could build its proposed 866-kilometre line. The company is wholly owned by Inter-provincial Pipe Line Ltd. of Toronto.

The $360-million line, 12.75 inches in diameter, would run from Zama in Northern Alberta to Norman Wells in the Northwest Territories.

At Norman Wells, it would pick up oil and natural-gas liquids - such as propane - destined for southern markets from the Imperial Oil Ltd. field there. Imperial plans a major expansion of the field, most of which lies under the Mackenzie River. Imperial is the largest shareholder in IPL, with about 33 per cent of the shares.

The board's decision will now be sent to the federal Cabinet for approval and, if that is received soon, the pipeline could be completed by late 1983, with the first deliveries of oil starting in early 1984.

If the Cabinet gives its approval, the pipeline would cover about half the route from Great Slave Lake to the Mackenzie Delta that would have been followed by proposed lines rejected in the late 1970s. In approving the line, which will have a capacity of up to 5,000 cubic metres of oil a day and will initially deliver just under 4,000 cubic metres a day, the energy board ruled that the oil is needed in Canadian markets. By comparison, IPL's main line from Edmonton to Regina can carry 240,000 cubic metres a day and its line from Sarnia to Port Credit 74,000.

"Under the prevailing circumstances the volumes of crude oil to be transported by the proposed pipeline for ultimate delivery to domestic markets will make a positive contribution to the security of energy supply," the three-man board found.

However, the ruling runs against the grain of reports on Mackenzie Valley pipeline development in the late 1970s, which argued that unsettled land claims and environmental problems ruled out early pipeline development in the Northwest Territories.

Mr. Justice Thomas Berger argued in his 1977 report that there should be a 10-year moratorium on the development of pipelines in the Yukon and the Northwest Territories until native claims have been settled. The energy board had ruled in its earlier decision rejecting a Mackenzie Valley route for an Arctic Gas pipeline that it was not in the public interest to proceed until a land claim by the Dene Nation (Indian Brotherhood) was settled.

In its current judgement, the board simply avoided the issue on land claims with respect to the Norman Wells line. "Although the federal Government may be currently considering treaty rights, ownership, territorial jurisdiction and other related questions, these are not matters with which the board is involved," the judgement said. "The board recognizes the importance of native land claims. However, on the basis of the evidence before it, the board is not convinced that approval of the proposed pipeline would in fact prejudice the settlement of native claims."

During hearings on the project last October and November in Edmonton, Yellowknife and Ottawa, the board was told by spokesman for the Dene Nation and the Metis Association that if the Norman Wells line were built, it would prejudice native land claims in the North and also have a disruptive effect on native people.

The board's ruling acknowledged that native people would get a smaller share of the benefits and a greater share of the problems than non-natives. "The benefits to the native population in the Northwest Territories and Alberta would be relatively minor proportions. As a corollary, they are also most likely, and least able, to bear the greater burden of the costs. whether they be social, economic, cultural or political," the report said.

The board found that it is not possible to quantify either the negative costs or the positive benefits associated with the project and that "irrespective of the actual level of negative impacts, the distribution of these would fall most heavily on the native people of the impact area who are least equipped to participate in the positive impacts of the project."

However, the board did find that since the project is much smaller than the proposed gas pipelines in the Mackenzie Valley, the local communities affected by the project, primarily Norman Wells and Fort Simpson, would not be unduly taxed by the project. Even so, the board found it difficult to accept Inter-provincial Pipe Line's view that the positive benefits of the project would outweigh the negative. It is more likely, the board found, that "its modest potential benefits and potential liabilities would balance out."

In this situation, the board saw a need for an effective monitoring system on the project as it is planned and built. If the federal Cabinet accepts the energy board's recommendation, the company will be required to file its socioeconomic plans and programs with the board and these will be subject to public scrutiny and board approval before they are implemented.

Similarly, the company will also be required to file its environmental studies, plans and manuals with the board. Native and resource groups who intervened during the hearing will be given a chance to study and comment on the plans as they are developed.

These groups will then have 30 days in which to study the socioeconomic or environmental material and to make suggestions. Inter-provincial Pipe Line will then be required to file a response indicating which of the suggestions it is willing to incorporate in its plans and the reasons for not incorporating any other of the suggestions.

The energy board also found that Inter-provincial Pipe Line (NW) has the financial capacity to build the line and that it would permit the establishment of tariffs that would give the company a 16 per cent return on its equity, which is planned to be 25 per cent of the project's costs.