OTTAWA—The federal government has approved a major new deep-water oil operation off the coast of Newfoundland, two days after the head of the United Nations said to invest in new fossil fuel projects is “moral and economic madness.”
In a decision published online Wednesday afternoon, federal Environment Minister Steven Guilbeault concluded the Bay du Nord project “is not likely to cause significant” environmental damage.
He also set out a series of conditions, including requirements to monitor the impacts of the project, measures to protect ocean wildlife and migratory birds, and requirements to minimize greenhouse gas emissions.
The project must also show it is emissions-free by 2050.
Environmentalists were quick to denounce the decision, which they decried as an irresponsible contradiction of the government’s own climate plan that clashes with the most recent alarm bell from the UN this week, which released a report that said time is running out to prevent the more extreme damages of climate change.
The report also said that even “existing and currently planned” fossil fuel projects would belch enough emissions to push global warming higher than 1.5 C this century — the threshold beyond which climate change is expected to get more disastrous.
Catherine Abreu, executive director of the group Destination Zero and a member of the government’s climate change advisory committee, called the Bay du Nord approval an “insult.”
“It’s really this kind of cognitive dissonance that I think a lot of us are really used to from this government,” Abreu said.
“Canada needs to start being a responsible global actor.”
The Bay du Nord project has received local support in Newfoundland, where the provincial Liberal government sees the offshore oil sector as a crucial source of jobs and revenue. According to Equinor, the Norwegian oil giant behind the project, the Bay du Nord would pump up to 188,000 barrels of oil per day from the bottom of the North Atlantic — almost five per cent of Canada’s total oil production in 2020 — and generate roughly $3.5 billion in government revenue.
The project’s operations are also expected to generate a small amount of greenhouse gas emissions — less than 0.03 per cent of Canada’s national total, according to Equinor’s 2018 description of the proposed operation, though that does not include the emissions from when the oil produced is burned.
In an apparent bid to counter the environmental outrage over the project, the government also announced Wednesday that it will create new guidelines that require future oil and gas projects to have “best-in-class” emissions performance.
Some also argue that the Bay du Nord approval will not scupper Canada’s planned climate action, which involves slashing national emissions by at least 40 per cent by 2030 and then hitting net-zero before 2050.
Chris Bataille, an adjunct professor at Simon Fraser University, said the emissions from offshore oil projects are anywhere from eight to 10 times lower than operations in the Canadian oilsands, and they produce a “higher quality” oil that doesn’t need to be as extensively refined.
On top of that, the Bay du Nord oilfield — 500 km northeast of St. John’s, in the North Atlantic — is well positioned to supply Europe at a time when countries on the continent are scrambling for alternatives to Russian oil after the invasion of Ukraine .
Another reason to support the project is that Newfoundland is “historically a have-not province” with a small population and limited employment opportunities, Bataille said.
That means, even if the emissions displace some room for Prairie oil under the federal government’s planned “cap” on greenhouse gas pollution from the oil and gas sector, such a regional trade off could be justified given how Alberta and Saskatchewan have more people and economic opportunities, he said.
“It has a fairly large benefit for Newfoundland and it helps our European allies.”
Abreu agreed Newfoundland deserves an economic boost, but argued it is regressive and damaging for governments to view fossil fuel development as the path to get there.
“This is another failure of governments across the country to prioritize finding sustainable solutions to keep communities in Atlantic Canada prosperous,” she said.
Guilbeault and the Liberal government have insisted that Canadian oil production can increase in the coming years without knocking the country’s plans to slash emissions off course. the latest iteration of the government’s climate plan, published last week, shows oil production is forecast to increase by at least 21 per cent by 2030, even as emissions are projected to drop — thanks to a suite of policies like the national minimum carbon price, methane regulations and more — to at least 36 per cent below 2005 levels by 2030.
The government says policies not included in that projection, including increased public transit, clean technology investments and other planned initiatives, will close the gap to meet Canada’s 2030 target of 40 per cent below 2005 levels.
The oil and gas sector was responsible for 26 per cent of Canada’s total emissions in 2019, the most recent year for which data is available. Its level of emissions was also the fastest growing, up roughly 20 per cent since 2005.
In last year’s federal election, the Liberals vowed to cap emissions from the oil and gas sector by 2025. Guilbeault said last week that they still haven’t decided at which level the cap will start, but the new emissions plan projects emissions from the sector can drop 42 per cent below 2019 levels by 2030.
The plan states these reductions would come from the federal carbon price, policies to encourage the use and development of carbon capture, utilization and storage (CCUS) technology, and “stringent” methane regulations that call for a 75 per cent drop in emissions of the potent greenhouse gas by 2030.
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