ST. Johns, NL –
Federal Environment Minister Steven Gilbilt has approved a controversial new oil project off the coast of Newfoundland, calling Ottawa the strongest emissions regulation ever imposed.
The Impact Assessment Agency of Canada said in a statement on Wednesday that the Equinox Bay Do Nord project could move forward until it achieves net-zero greenhouse gas emissions by 2050.
This means that the company will have to offset or capture any emissions generated by the project by 2050. The announcement said this was the first time the federal government had imposed such a condition on an energy project.
By 2050, it is legally necessary to consider and include the best available options for reducing Equinor emissions.
“I have determined that the designated project may not have a significant adverse environmental impact,” Guilbeault said in a 22-page decision statement.
But a former environmental activist who lobbied against oil and gas projects before politics said the decision kept him awake at night.
“It’s one of the hardest decisions I’ve ever made,” Guilbeault said in an interview.
But he said the government has set up a new environmental review process for such projects and set up the Canadian Impact Assessment Agency to do so, with the aim of removing politics from the process.
The project was reviewed using the previous system as to when the application was accepted, but Guilbeault stated that going against the recommendations of an independent agency was not in his favor.
“They made a recommendation to me that they, after studying the project for four years, conclude that the project will not have any significant impact by 2050, with 137 conditions, including Net Zero,” he said. “So going against this organization was a challenge for me.”
Bay du Nord is expected to produce about 300 million barrels of oil in its lifetime, although industry insiders in Newfoundland and Labrador say that number could exceed 800 million barrels. Aquino said Bay du Nord would probably start pumping in the latter half of the decade and continue production for 20 to 30 years. Production is expected to peak at around 200,000 barrels a day.
Greenhouse gas emissions from production are expected to be as low as eight kilograms per barrel. The average emission from oil production in Canada is 40 kilograms per barrel, and in oilsend it is 80 kilograms.
Equiner predicts that the project will have an annual emissions of 177,770 to 257,715 tons.
But climate scientists and environmentalists have opposed the plan, saying it would undermine Canada’s targets for reducing greenhouse gas emissions, and say ignoring how much greenhouse gas emissions would be generated by burning fossil fuels.
The government indicated on Wednesday that the terms being placed on Bay du Nord, including Net-Zero, by 2050, would become the legal standard for future oil and gas projects for federal approval.
Guilbeault said oil consumption is set to decline by 2050 but there will still be some demand and that it will only be for carbon neutral oil. He said such projects, which are in line with the carbon footprint in tackling climate change, are ultimately going to displace oil production which is not the case.
“Okay, that’s what we have to do,” he said. “I mean, unless those other products find a way to be carbon neutral, that’s the inevitable conclusion that the world is coming.”
Aquiner spokesman Alex Collins said the Bay Do Nord project “has the potential to produce the lowest carbon oil in the country.”
“We are pleased with the strong support that the Bay Do Nord project has received from stakeholders across the province of Equinox and across Canada,” he said.
Collins noted in an earlier statement that the company and its partners had not yet approved the development. This decision, he said, is expected “in the next few years.” Aquino said the project would provide about $ 3.5 billion in total revenue for the cash-strapped governments of Newfoundland and Labrador.
Premier Andrew Furrey was surprised at an evening press conference, saying the project would be an economic driver for his province. He said greenhouse gas emissions from the project would be the world’s lowest for oil projects and would help meet global demand for “low-carbon, ethical oil”.
“This would be a huge step forward for our economic recovery,” Fure added.
Climate workers were not happy.
Keith Stewart, senior energy strategist at Greenpeace Canada, said in an emailed statement: “(The) decision represents a political victory that will deepen the global crisis and the global addiction to planet-destroying fossil fuels.”
“This decision is not just a climate failure, it is a failure to envision and invest in a sustainable energy future for the Atlantic region.”
Caroline Bruilet, Canada’s national policy manager for the Climate Action Network, said climate change advances over the past few years have been hampered by the approval.
“I really think it’s heartbreaking,” he said.
Bruilet said it came just two days after a United Nations climate report that made it clear that there was no room for more oil and gas production if the world were to avoid the worst of the climate crisis.
“It’s clearly not compatible with climate protection,” he said.
This report was first published in the Canadian Press on April 6, 2022.