After years of waning activity, oil and gas exploration is heating up in a big way off the coast of Newfoundland and Labrador: The provincial-federal regulator recently awarded more than $238 million in exploration licenses.
This month, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) announced the results of this year’s call for bids, a process in which companies are invited to offer money for areas in the Atlantic Ocean that they want to explore for oil and gas. deposits. It is a significant leap compared to recent years and fits in the province controversial plan double offshore oil and gas production by the end of the decade.
The province’s continued expansion drive as this year’s United Nations climate conference enters its final days is “the worst possible time,” said Angela Carter, a specialist in energy transitions at the International Institute for Sustainable Development (IISD). . National Observer of Canada. This week, the UN Secretary General, António Guterres described the expansion of fossil fuels as a “kidnapping of humanity”.
“So what is happening here is we have a government that is still issuing calls for bids and is still issuing exploration licenses at a time when it is indisputable that the only way we can stay within 1.5 degrees of (global) warming, so within any chance of climate security is to stop the expansion of oil extraction,” said Carter, who is also a professor of politics at the Newfoundland-based University of Waterloo.
“This is one example of how the Newfoundland and Labrador government and all these companies have gone astray and are defying climate science. That’s really what’s at the heart of this issue here.”
Bids have been split into five lots, with ExxonMobil and Qatar Energy submitting the highest bid at more than $181 million.
In the waters off the coast of NL, a plan is brewing to double oil production by 2030. We are following the story. More recently, more than $238 million in exploration licenses have been awarded to companies seeking opportunities in the Atlantic.
The figures are the highest since 2018, when the regulator granted a record offer of more than $1.3 billion and a record single offer of around $621 million. A parcel that year, valued at $32 million, became the Bay du Nord project, Canada’s first deepwater oil project.
Since then, the flow of money from oil companies to Newfoundland has slowed and the province is banking on more money offshore oil to help its struggling economy.
However, Carter points out that more oil and gas will lead to the opposite. Companies exploring fossil fuel deposits are considering projects that won’t come online until later this decade. a recent IISD analysis It shows that after 2030, global demand for oil will begin to decline sharply, and emphasizes that Canada needs a plan to prevent these large initial investments from becoming stranded assets.
Carter is currently working on a project looking at countries that are reducing their fossil fuel sectors. Specifically, Denmark, which is part of the Beyond Oil and Gas Alliance, has committed to end all oil and gas exploration in the North Sea. She said Newfoundland needs the same kind of climate leadership, which, in turn, would help the struggling province.
Newfoundland and Labrador continues to have the highest rate of unemployment in the country. As fossil fuel companies make massive profits and take advantage of the government subsidiesthe money must be diverted to support a just transition for workers, Carter explained.
“[Oil has] produced off the coast for 25 years. And we’re still facing the same kind of problems that… motivated the development of that offshore sector. So poverty, unemployment, lack of access to food for tens of thousands of families here. Inequality,” he said. “We still have huge social problems here that the oil companies have not solved. So who is this for?
The province’s industry, energy and technology ministry said the call for tenders shows the “confidence” of companies working abroad. The department said the province’s greenhouse gas emissions from its offshore oil average 13.8 kilograms of carbon dioxide per barrel compared with the international average of 16.1 kilograms per barrel.
“We know the world will continue to need oil in the medium term and that other parts of the world will continue to produce oil, and we see ourselves as a sustainable low-carbon offshore oil and gas industry to meet that demand,” the department said. in a sentence.
“Our industry performs strongly from an emissions perspective relative to many other jurisdictions and the overall international average… We will continue to position the province’s low carbon oil and gas products during this time of transition” .
However, experts stress that there are no such things as climate-friendly fossil fuel products. Last month, the federal government released new draft guidelines for approving future oil and gas projects, which include regulations on “best-in-class” greenhouse gas emissions performance and a rule that all projects They must have net zero emissions by 2050.
Speaking from COP27, the UN climate conference, Québécois Bloc deputy Monique Pauzé said Newfoundland’s expansion plans fit into the theme of the climate crisis that the federal government is not taking seriously.
“The image is more important than the actions, and it is always the same with this government since the first time I was elected in 2015. It is always nice words, not actions. All the time,” he said.
Green MP Mike Morrice stressed the need for Canada to leave 83 percent of its oil and gas reserves in the ground so that the world has a 50-50 chance of limiting global warming to 1.5C.
“It is disheartening if you look at COP26 in Glasgow last year, and a promise was made to end international financing of oil and gas, but since then, not only has it not been fulfilled, but new subsidies for carbon sequestration have been introduced. , and Bay du Nord was approved,” he said.
“And it looks like a similar pattern here again where there may be some good rhetoric, but then, in the days that follow, more oil and gas exploration in new locations, in sensitive offshore areas, is daunting for Canadians who want to see this happen. the government steps up and follows the science on the climate crisis.”
Although he said the federal government has made some progress on climate, the direction of Newfoundland’s offshore oil and gas industry is inconsistent with goals set by the next UN biodiversity conference. Scheduled to take place in Montreal next month, delegates will discuss a plan aimed at halting biodiversity loss by 2030.
There is a direct link between further exploration for fossil fuels and the loss of biodiversity. Although completed oil and gas projects present risks to marine life, seismic surveys and exploratory drilling are also detrimental. Whales and dolphins can experience hearing loss from seismic activity, limiting their ability to find food and communicate. It can also drive them away from their habitat and lead to lower rates of productivity, said Sarah Giltz, an Oceana marine scientist who specializes in the effects of offshore drilling. National Observer of Canada in September.
Exploration drilling carries the same risks as operating oil rigs. The 2010 BP Deepwater Horizon spill, the largest in US history, came from an exploratory well. According to the Center for Biological Diversity, the spill, which killed 11 people, “probably damaged or killed an estimated 82,000 birds of 102 species, an estimated 6,165 sea turtles, up to 25,900 marine mammals, and a large (but unknown) number of fish — from the great bluefin tuna to our nation’s smallest seahorse — plus oysters, crabs, coral and other creatures.”
The federal government is investing in a number of renewable energy initiatives and will support oil and gas workers in clean energy fields as the country decarbonises, said Environment Minister Steven Guilbeault, who is in the COP27.
“The bidding process itself does not authorize any offshore production or development activity,” it said.
“Let me be clear, any proposed production in the bid-first area would be subject to the Impact Assessment Act and any new hydrocarbon development in Canada would have to fit within Canada’s world leading climate plan, and would have to offer the best in-class emissions performance, including being net zero by 2050.”