For more than a decade, advocates of geothermal energy have pushed for the same kind of treatment other energy producers receive from the federal government — with little progress.

But with the release of the federal budget on March 22, that changed.

The budget included the expansion of financial mechanisms to geothermal, which will allow these emerging renewable energy operators to write off more expenses. The change is significant for geothermal energy, which requires higher upfront investments than wind or solar.

“This is a milestone for us,” said Alison Thompson, chair and co-founder of the Canadian Geothermal Energy Association (CanGEA). “We’re legitimate. We’re there.”

Granted, the budget only provided one of seven things CanGEA requested.

Conservative MP Matt Jeneroux, who recently tabled a private member’s motion in the House of Commons to support Alberta’s geothermal sector, said in an interview that the budget was “an early success” and shows awareness of the industry.

“Now we really need to make sure that awareness translates into actual action,” he said.

Alleged Typo Previously Prevented Sector From Growing

Thompson says the geothermal sector was successful in getting the tax code changed to recognize geothermal energy a few years ago.

But there was a typo. Or at least, that’s the suspicion.

“Geothermal energy was stated in the tax code, but further down [in the code] it became just ‘geothermal electricity,’ ” Thompson explains. “So for the past several years, we’ve had this situation where geothermal has been acknowledged as a renewable energy, but only the electricity side.”

But you have to have geothermal heat in order to spin a turbine to generate electricity, meaning the suspected typo seriously restricted the industry.

Budget Allows for Flow-Through Shares, Key Tool to Attract Investors

Up until now a dollar invested in geothermal wouldn’t go as far as the same dollar invested in solar, oil, gas or mining projects. It’s why the tweaks in the budget matter.

The changes also allow for the legal use of “flow-through shares,” a mechanism that can help attract investors during the early exploration stages. Such measures have a tax value of about $9 million.

Unlike wind or solar, it’s impossible to know that an area is good for geothermal until drilling. That requires bringing on investors at an “earlier risk stage” than other technologies.

“There’s still a huge amount of risk associated with exploratory drilling and seismic testing,” explains Sean Collins, president at Terrapin Geothermics.

“Any sort of project or process or incentive or write-off program that can allow for capital to flow more easily towards exploratory drilling really is one of the main areas we see there being an opportunity for significant growth and development of the industry.”

Geothermal Appeals to Wide Variety of Political Interests

Jeneroux, who represents the riding of Edmonton Riverbend, says that he first became interested in the concept of geothermal via the issue of orphaned, abandoned and suspended oil and gas wells in Alberta.

After all, there’s plenty of potential for retrofitting some of the wells to capture geothermal energy and create lots of jobs. But Jeneroux says he started to see a number of hurdles at the federal level that needed to be overcome before the sector could proceed. He says he talked to Conservative interim leader Rona Ambrose about a year ago, and she gave him the clear to look into the issue a bit more.

“Initially, there was a lot of education needed as to what geothermal technology was and is and now that people — especially my colleagues — understand it a bit more, it’s more ‘well, why haven’t we been doing this before?’ ” he says. “It’s become unanimously supported in our caucus and now hopefully strong support from the House of Commons as well.”

Conservative support for geothermal is something that gives Thompson great hope. It’s confirmation that geothermal is “bipartisan energy” that appeals to politicians of all ideologies, regardless of where they land on issues like climate change, energy security or job creation.

Geothermal energy is “starting to bubble to the forefront,” Collins added.

Advocates Look to Mid-Year Budget Review For Further Changes

But there’s still much more to be done to really get the geothermal sector up and running.

Jeneroux’s motion will likely help keep the subject relevant for a while longer: it still needs to go through the process of being debated and brought before a committee, which has an uncertain timeline.

There’s also the potential for more federal support to be unveiled with the mid-year budget review, says Thompson, or maybe something next spring. She emphasizes that “parity has not been achieved” for geothermal.

Further steps the federal government could take to “de-risk” the sector include: loan guarantees, expansion of the Eco-Energy for Heat Initiative, providing more funding to industry groups such as CanGEA and taking a leading role in resource mapping.

“Let’s just solve the whole problem,” Thompson suggests. “Let’s not do it piecemeal. Because that does not lead to investor confidence or certainty.”

At this stage, it’s largely about exploratory drilling, and setting projects in motion.

Borealis GeoPower has received a drilling permit for its Valemount project in British Columbia. Thompson, who serves as principal at Borealis, says the company is working hard to have a late spring or summer drilling season.

While the federal budget didn’t give geothermal advocates everything they were hoping for, it is a good start for setting a precedent.

“We’re now starting to see politicians from all parties and stripes recognize that the geothermal industry fits almost every single political agenda,” Collins said.

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Across Canada’s north, diesel has long been the primary mode of providing year-round electricity to remote communities — but with the advent of small-scale renewables, that’s about to change.

Northern communities were already making strides toward a renewable energy future, but with $400 million committed in this year’s federal budget to establish an 11-year Arctic Energy Fund, energy security in the north has moved firmly into the spotlight.

“This level of support shows positive commitment from the Canadian government on ending fossil fuel dependency in Indigenous communities and transitioning these communities to clean energy systems,” said Dave Lovekin, a senior advisor at the Pembina Institute.

Burning diesel not only pollutes the atmosphere, but getting it into remote communities is often inefficient in and of itself: it’s delivered by truck, barge or, sometimes when the weather doesn’t cooperate, by plane.

There are more than 170 remote indigenous communities in Canada still relying almost completely upon diesel for their electricity needs.

But, for some, at least, that’s beginning to change. Take the community of Old Crow (Vuntut Gwitchin First Nation), above the Arctic circle in the Yukon.

Despite its northern latitude, and near total darkness between December and February, a 2014 Government of Yukon pilot study demonstrated that solar represents a major untapped renewable resource for the community.

Many homes in Old Crow, north of the Arctic Circle, still rely on diesel, but that's changing. Photo: Matt Jacques.

Now Old Crow has a number of small-scale solar panel installations, including an 11.8 kilowatt array at the Arctic Research Centre — but its sights are set higher. Plans for a 330 kilowatt solar plant are well underway. A 2016 feasibility study estimated that this large-scale installation could offset 17 per cent of the community's total diesel use, or up to 98,000 litres of fuel each year.

“Anything that affects our community, we want to have control over. That’s our goal with this project is to have ownership over the facility,” said William Josie, director of Natural Resources for the Vuntut Gwitchin First Nation. “We burn a lot of fuel up here per capita and we’re trying to reduce that.”

Josie said his community is excited to build further solar capacity.

“This has been in the works for a long time, and it’s just the right thing to do,” he said. “It’s the first solar project of this size in the Yukon with community ownership.”

The Vuntut Gwitchin First Nation has a self-governing final agreement in place with the Government of Canada, the Government of the Yukon and the Council of Yukon First Nations. So too does the Kluane (Burwash Landing/Destruction Bay) First Nation in the southwestern Yukon, which is taking another approach to delivering a similar level of renewable energy capacity.

A major $2.4 million wind power generation project is set to be installed in 2018. Three refurbished 95 kilowatt turbines will deliver just under 300 kilowatts of total power and are estimated to offset 21 per cent of the community’s total diesel use.

“One of the big things for the community is to be self-reliant and self-sufficient. Diesel is neither of those two,” explains Colin Asseltine, general manager of the Kluane Community Development Corporation. “We’re looking at what we can possibly do to reduce our carbon footprint and move off-grid.”

The wind project will expand on the earlier successes in the community. Since 1998, Burwash Landing has used biomass for district heating, and began selling solar power back into the grid not long after installing a 48 kilowatt array in 2003. Along the way, they have been collecting the data required to inform the next steps and increase the impact of the community’s investment in renewable energy.

Meet the First Nation Above the Arctic Circle That Just Went #Solar #yukon #arctic #cleanenergy #cdnpoli https://t.co/B9Um6R7yJq

— DeSmog Canada (@DeSmogCanada) March 28, 2017

A geothermal test well provides promise for increased food security.

“Connecting that to our greenhouse projects will really help with the possibility of growing year-round, and having a positive effect on food sustainability at the same time. Both renewable energy and food security go hand in hand, so we’re working on those together,” Asseltine said.

While these two communities have shown that renewable energy solutions are indeed feasible for remote northern environments, hurdles remain.

“Our biggest challenge right now is just to secure capital costs” Josie said. “We’re looking for $2 million to $2.5 million, depending on the final engineering and design.”

Lovekin, from the Pembina Institute, underscores this point, explaining that “the challenges on the technology side are nowhere near the challenges on the financial and community capacity side.”

Up until now, federal and provincial or territorial funds have focused on financing initial development costs.

“The first focus on funding capital expenditure is good, but governments simply putting in money to get systems built has been shown to not be a sustainable strategy to support these communities to fully develop their projects,” Lovekin said. “The more challenging part is the ongoing operations and maintenance and ability for communities to maintain the systems. Systems will break, nobody's there to fix them, and there's little funding for that.”

And once systems are operational, their long-term economic viability largely rests on the value of the Power Purchasing Agreement (PPA) that is offered by the local utility operators.

“In order for that whole model to be successful, you need a better and more fair PPA price than what has typically been offered in the north. Typically the PPA will simply offer the avoided cost of diesel fuel, so whatever it costs to get a litre of diesel up to the community via winter road or barge,” Lovekin adds.

Renewable energy systems typically have lower operating and management costs, and Pembina and others are working to ensure PPA prices reflect true cost savings.

“The federal carbon tax coming into play will also make diesel systems even more costly, so there’s opportunity to look at a PPA price for renewable systems that will not pay the carbon tax, as well as other externalized costs such as diesel fuel spills, financial bailouts when winter roads deteriorate and fuel needs to be flown up. So addressing all of that in what gets offered via a fair and equitable PPA would be ideal,” Lovekin said.

On the community capacity side of the equation, initiatives such as the 20/20 Catalysts Program and the Indigenous Clean Energy Network are providing essential training, and mentorship for indigenous communities making the transition to renewable energy.

Nonetheless, Lovekin feels there is a critical need for “more training, skill development and job establishment to support the community getting involved in their own transition. There need to be barriers removed to have more capacity built and leadership come from within the community.”

That’s where the new federal funding could be a game-changer.

“The real test will be in the types of policies and programs that are developed and how they are designed to support energy autonomy and create economic development within and for Indigenous communities,” Lovekin said.  

Image: Solar panels in Old Crow, Yukon. Photo: Matt Jacques

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The federal government has committed $25 million over five years to funding Indigenous guardian programs.

The news, announced on Wednesday in the federal budget, marks the first time the government has ever financially supported the community-run programs, which work to monitor ancestral territories, enforce Indigenous laws, conduct scientific research and increase cultural knowledge. There are currently about 30 existing Indigenous Guardians programs across Canada.

However, the $25 million commitment represents only five per cent of what was requested by the Indigenous Leadership Initiative, which has been leading the charge to attain federal funding for 1,600 guardians and associated costs.

“This budget commitment acknowledges the leadership of Indigenous Peoples in determining the future of our lands,”said Ovide Mercredi, a senior advisor with the Indigenous Leadership Initiative.

While the investment will not enable new guardian programs to be established immediately, the seed funding will help develop a national network and prepare indigenous nations and communities to launch their own indigenous guardians programs, according to a press release from the Indigenous Leadership Initiative.

“Indigenous Guardians programs strengthen our communities,” said Valérie Courtois, the director of the Indigenous Leadership Initiative. “They create jobs, lower crime rates and improve public health. But most importantly, they inspire our young people. They connect them to the land and their elders. They give them professional training tied to their language and culture. That offers hope that can combat the despair so many Indigenous youth feel today.”

A recent study of Indigenous Guardians programs in the Northwest Territories found that every dollar invested in the programs generated $2.50 in social, economic and environmental value. Sustained federal funding would increase the value to $3.70.

“A critical driver behind Indigenous communities having authority to manage lands and waters is having active and fulsome on-the-ground programs such as Indigenous guardians: really having the boots on the ground, the eyes and ears there to monitor and protect and manage their lands and territories,” says Claire Hutton, community conservation and leadership advisor at TNC Canada, an affiliate of The Nature Conservancy

Provincial and Federal Enforcement Lacking in Many Regions

Douglas Neasloss, chief councillor of the Kitasoo/Xaixais Nation on British Columbia’s Central Coast, recalls conditions in his nation’s territory some two decades.

“We saw so many illegal activities,” he says. “Everything from illegal poaching of abalone — which was our food that was wiped out almost 20 years ago — to illegal forestry, to a lot of different types of illegal fisheries, to illegal hunting.”

Yet Neasloss says they would only see BC Parks once or twice in a “good year,” and the federal Department of Fisheries and Oceans even less than that. The Great Bear Rainforest spans over 100,000 square kilometres — with his nation’s ancestral territory making up some 5,000 square kilometres of that — which means that vast areas were effectively unmonitored.

That’s where the idea of the “guardian watchmen” came in, following the lead of the Innu in Labrador, which first established a program in the early 1990s.

In 2005, the Coastal Guardian Watchmen Network was created. There are now watchmen programs in eight coastal communities — including Old Massett (Haida), Bella Bella (Heiltsuk) and Hartley Bay (Gitga’at) — and over 20 more across Canada. And many more communities want to establish programs: Hutton says there were 30 communities at the recent national gathering organized by Indigenous Leadership Initiative, with upward of 200 communities that have expressed interest.

“The appetite and conversation around it feels very alive right now in communities,” Hutton says. “There’s a lot of interest.”

#Indigenous Guardian Program Awarded First Ever Federal Funding https://t.co/IID2xyeElb #Budget2017 #bcpoli #onpoli #cdnpoli #FirstNations pic.twitter.com/8hS1p8nkBp

— DeSmog Canada (@DeSmogCanada) March 22, 2017

Single Program Costs Over $200,000 For Six Guardians, Fuel and Equipment

In addition to monitoring for illegal activities, Indigenous guardians serve as ambassadors to visitors, welcoming them to the territory and teaching them about its history and laws.

Chantal Pronteau, who’s about to start her third season as a Guardian Watchman for Kitasoo/Xaixais Nation, says that exchanges with visitors are usually fairly friendly: “We’re going in there with respect and open minds to try to understand the person’s reason to be extracting our resources,” she says.

Pronteau is one of six full-time guardians for the First Nation, with a specific role of working alongside biologists conducting research within the territory and monitoring Mussel Inlet for illegal crabbing; her and a colleague spend two-and-a-half months every season stationed out at a cabin in the inlet.

Hutton stresses that every guardian program is as unique as every Indigenous community, but that there are common themes (TNC Canada is releasing a toolkit in June for communities to help share resources and practices about guardian programs).

One commonality is these programs all cost money. Neasloss says the guardian program run by the Kitasoo/Xaixais Nation costs $210,000 a year, including fuel, wages and equipment. The First Nation charges a “sustainability fee” — $10 per day, per person — for any commercial users in the territory, which supports the Guardian Watchmen program.

“It’s a small fraction of what we need,” he says. “I don’t think it’s fair for our community to spend that kind of money to go monitor commercial activity when it’s the province that gives out those permits. Essentially, they give out the permits and we’re there to babysit.”

Tensions Between Indigenous and Canadian Laws

That’s where federal funding is needed, helping to kickstart and maintain programs across the country.

But there’s a major problem that has yet to be resolved: the Canadian government still doesn’t recognize the Indigenous laws that guardian watchman attempt to enforce as legitimate. In addition, the federal government has approved a series of resource extraction projects in recent months that challenge Indigenous claims to nationhood, including the Kinder Morgan Trans Mountain pipeline and Pacific Northwest LNG export terminal.

“There are very complex jurisdictional issues that tie certain activities to certain departments,” Hutton says.

Neasloss explains: “In the eyes of the nation, my community, we feel our watchmen do have the enforcement authority on behalf of our nation. Our nation never signed a treaty with Canada, we never surrendered it, we were never conquered in war, therefore we maintain it belongs to us. The feds and the province do not agree or support that at this point.”

However, he says that while he thinks it’s hard for the Crown to look at relinquishing any authority, the new funding represents a “step in the right direction.”

The budget says the ministers of Indigenous Affairs and Environment and Climate Change will “develop a proposal for the pilot” in the coming months.

Image: The Ahousaht Resource Stewardship Guardians leave the dock in Tofino, on Vancouver Island, for their daily patrols. The First Nation started its Guardian program in May 2016. © TNC Canada

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