Eight weeks before Earth’s two hottest days on record (July 21-22, 2024), Australia’s Northern Territory Government approved plans for fracking expansion in the Beetaloo Basin. The approval was granted to Tamboran Resources, a publicly traded natural gas exploration and drilling company. This decision, made despite the International Energy Agency’s warnings that no new coal or gas projects can proceed if the world is to limit global heating to 1.5°C, is shocking not only for its climate implications, but also for its blatant disregard for Aboriginal land rights. The region’s Traditional Owners (a term referring to the Aboriginal and Torres Strait Islander peoples who inhabited Australia before and since European colonization) have voiced strong opposition to the misuse of their land, highlighting the risks the proposed expansion poses both to unique cultural heritage sites in the basin and to the groundwater and ecosystems on which local Indigenous communities rely.
Australia’s Beetaloo Basin contains large deposits of shale gas1
The growth of fracking in the Beetaloo Basin is a visible example of the intrinsic link between energy development and Indigenous communities in many parts of the world. Globally, the displacement of Indigenous peoples has led to the loss of traditional ecological knowledge and environmental degradation. The extraction of natural resources from Indigenous lands without consultation or fair compensation has led to conflict, human rights abuses, and social unrest. The historic and ongoing marginalization of Indigenous peoples, in the energy sector and writ large, has resulted in significant socioeconomic disparities around the world and has contributed to global poverty. The global energy and development industry, standing on the precipice of major change as our planet embarks on the so-called “energy transition”, has the opportunity to either advance energy equity or repeat the mistakes of the past.
Adopting a more equitable approach to energy development is not only just, but strategic. Many Indigenous lands, such as those held under native title in Australia, possess significant quantities of critical minerals and vast renewable energy potential. Recognizing Indigenous communities as equal partners in projects built on their land facilitates smoother development and implementation and builds lasting project support.
Moreover, engaging Indigenous communities as partners advances economic reconciliation by ensuring local tribes directly benefit from project development on their territories. This is because energy projects, particularly when co-owned by Indigenous groups themselves, can lead to substantial economic benefits for local residents, including job creation and skill development. Improved socioeconomic conditions have, around the world, shown to improve the health, education, and overall well-being of impoverished communities of all kinds.
Canada’s deliberate initiative to increase Indigenous ownership in renewable energy projects offers a powerful model for global adoption. Provinces across Canada have embraced government-backed loan guarantees and other supportive policies, leading to a proliferation of Indigenous-owned energy and resource development projects. This approach advances reconciliation with Indigenous peoples and promotes long-term benefits for historically disinvested communities.
Equity investment funds for Indigenous communities typically include government-backed loan guarantees or direct funding mechanisms. These funds provide financial support to help Indigenous groups acquire equity positions in new or existing energy projects. Through loan guarantees, the government commits to backing a portion of the debt used to develop new projects in the event of default, reducing financial risk and helping make project ownership more accessible to Indigenous investors.
Canada has implemented a variety of successful initiatives, including:
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Ontario’s Aboriginal Loan Guarantee Program (AGLP): Established in 2009, this $1 billion program has facilitated Indigenous equity participation in energy projects in Ontario, Canada’s largest province and home to over 400,000 Indigenous people. Since 2009, the ALGP has provided 11 loan guarantees for a total of approximately $500 million.2
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Alberta Indigenous Opportunities Corporation (AIOC): Launched in 2020, AIOC provides financial backing for Indigenous groups to invest in natural resource projects, including renewable energy. Since launch, the AIOC has backed 7 project investments by 42 distinct Indigenous communities in Alberta, providing a total of over $680 million in funding.3,4
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Saskatchewan Indigenous Investment Finance Corporation (SIIFC): Created in 2022, SIIFC will offer up to $75 million in loan guarantees to eligible applicants. (No applicants have successfully completed the application process as of April 2024.5)
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Federal Indigenous Loan Guarantee Program: Created in 2024, the program will build upon the success of the provincial programs and provide up to $5 billion in loan guarantees to Indigenous communities to enable greater access to affordable capital.
Enbridge executives and several Indigenous leaders in 2022 after finalizing a $1.12B deal. Enbridge sold a 12% stake in its oilfield infrastructure in Alberta to Athabasca Indigenous Investments, representing a variety of Indigenous communities.6
While Canada’s model does not limit beneficiaries to renewable energy projects, the energy transition provides an excellent opportunity to implement these strategies to create a more equitable energy landscape. To encourage the broader adoption of this ownership structure, governments should mandate Indigenous equity participation in renewable energy projects, where applicable, to ensure that Indigenous communities benefit directly from projects on their lands. Governments should also consider establishing national Indigenous renewable energy funds, similar to those in Canada, thus providing financial support to help Indigenous communities acquire ownership in renewable energy projects.
The world stands at a pivotal moment in its energy transition journey. Adopting policies that promote Indigenous ownership and participation in renewable energy projects, inspired by successful models like those in Canada, is both strategic and necessary for equitable energy development.
Sources
1https://www.infrastructureaustralia.gov.au/map/enabling-infrastructure-developing-beetaloo-sub-basin
5https://docs.legassembly.sk.ca/legdocs/Legislative%20Committees/ECO/Debates/20240416Debates-ECO.pdf