APTN National News
The chief of a Saskatchewan First Nation says TransCanada used underhanded tactics to secure a deal with his community on the Energy East pipeline project before a scheduled band election at the end of the month.
Carry the Kettle Chief Barry Kennedy said TransCanada used “sneaky and conniving business practices” to convince a group of councillors to sign onto an $18 million deal that would allow the energy firm to repurpose pipelines crossing through reserve lands for the proposed Energy East project.
The deal still needs final approval through a band council resolution and a sign-off from the Indigenous Affairs department because it involves a surrender of land along the pipelines’ right-of-way, said Kennedy.
The vote on a new band council is scheduled for March 31. The community votes on a new government every two years.
Carry the Kettle is a Nakota First Nation with about 3,000 band members. The community sits about 80 kilometres east of Regina.
Five TransCanada pipelines cross through Carry the Kettle’s reserve territory and the energy firm is looking to repurpose three of those pipelines, which currently carry natural gas, to transport oil as part of the Energy East project.
“To be trying to get a deal at the 11th hour on the eve of an election is just not good business,” said Kennedy. “They know that Carry the Kettle is in election mode. Their liaison for the last couple of years…is running for chief.”
Kennedy said he is exploring legal options to kill the proposed agreement.
Kennedy is running for chief against Elsie Jack, who is described as a TransCanada employee in consultation logs submitted by the energy firm with the National Energy Board as part of the Energy East approval process.
Jack did not respond to a request for comment.
TransCanada’s proposed $15 billion, 4,600 kilometre Energy East pipeline is projected to carry about 1.1 million barrels of oil per day from Alberta and Saskatchewan to Saint John, N.B., for refining. The pipeline project would cross through the territories of 155 First Nations.
Carry the Kettle First Nation is a pinch-point for the Energy East pipeline project.
The proposed Energy East agreement with Carry the Kettle would renew TransCanada’s easement over the existing pipeline right-of-way through the reserve and allow it to pump oil through the territory, according to a copy of the proposed deal obtained by APTN National News.
The proposed TransCanada agreement with Carry the Kettle
The agreement would also give TransCanada “the right to pass and repass over the reserve to such extent as may from time to time be reasonably required for the purpose of ingress and egress to and from the right-of-way.”
Under the deal, Carry the Kettle would agree to “not oppose, interfere or try to set aside Energy East project approvals” in exchange for $18 million, says the document titled, Relationship Agreement Term Sheet.
Under the agreement, TransCanada would give Carry the Kettle $7 million from the Energy East project. About $300,000 of the total would flow immediately to the First Nation once the company received an official sign-off on the term sheet of the deal. The document states the money could be used for community consultation on the deal, a legal review and a signing ceremony for the final agreement.
The rest of the money would flow in phases, including $450,000 for a new firetruck which would be transferred within 10 business days of the signing of a final deal. That money would be followed by $1.7 million which would flow 10 days after the final agreement comes into force. The community would then get $500,000 on the anniversary of the agreement.
Carry the Kettle may have to wait to receive the remaining $4 million. According to the agreement, the First Nation would get $2 million after Energy East receives a “positive final investment decision” which usually precedes the construction phase. The First Nation would get another $2 million after the Energy East project goes live.
The federal Liberal cabinet is expected to make a final decision on the Energy East pipeline by the middle of 2018. If approved, the pipeline could be moving oil by 2020.
The deal with TransCanada would also give Carry the Kettle $11 million in “legacy payments” over the next 20 years, or $550,000 a year, as compensation for the historical trespass of the existing pipelines through the reserve.
Carry the Kettle First Nation Coun. Kurt Adams said he believes the deal with TransCanada is a good one.
He said money from the deal would be used for a much needed senior’s home, a new administration office, the expansion of the local store and a community centre with a skating rink.
Adams said community members would all get a copy of the agreement and an information session is planned for after the election.
“Right now, it is a campaign thing and it is getting kind of political,” said Adams. “It’s not a done deal.”
Adams said Carry the Kettle could ask for changes in the agreement “if the community thinks it’s not enough.”
TransCanada said in an emailed statement that it expects the deal to change as a result of the consultation process.
“We expect both parties will seek confirmation and concessions through this process as this was an important milestone for both parties and provides Carry the Kettle with a range of benefits,” said the statement.
The deal was agreed to by a quorum of five councillors after negotiations with TransCanada.
Kennedy has been in a dispute with the band councillors for over a year and was not involved in the direct negotiations.
Kennedy said the agreement, which was announced last week, is a bad deal for Carry the Kettle.
“To put an agreement like this that is taking all Carry the Kettle’s rights way from the tract of land with no economic and environment safety nets in place. Everything is at the mercy of (the company),” he said. “In this agreement every time we want to cross that piece of land we have to go and ask their permission to do what we want on our land.”
Kennedy said the deal also offers too little compensation for the historical trespass of pipelines through Carry the Kettle’s lands which date back to the 1950s. The compensation for the historical trespass should be at least $56 million, said Kennedy.
Kennedy also said he wants Carry the Kettle to have an equity stake in the Energy East project.
“Why can’t Carry the Kettle have an equity portion? What is wrong with sharing? Why aren’t we allowed to put a tariff on the product that goes through that line, even for 20 cents a barrel? We would make millions of dollars.”
–Editor’s note: Article was updated on March 10 to change the last name of Elsie Koochicum to Elsie Jack. Elsie Jack said Koochicum is her maiden name and she now goes by Jack.