Oil industry calls Bay du Nord approval triumph, climate advocates condemn it
Darrell Roberts | CBC News | Posted: April 7, 2022 10:30 AM | Last Updated: April 7, 2022
The federal government formally approved Bay du Nord oil project Wednesday
Reaction to federal approval of the Bay du Nord oil project on Wednesday ranged from triumph to condemnation, as supporters touted economic benefits while those opposing it decried the environmental impact of fossil fuel emissions.
Supporters of the project, which include the Newfoundland and Labrador government and the local oil industry, say it will help the province transition to renewable energy while meeting continuing global demand for oil. Meanwhile, climate scientists and environmental activists say the project flies in the face of federal climate goals and the recommendations of the Intergovernmental Panel on Climate Change.
Norwegian oil company Equinor and its partners plan to develop the oil field in the Flemish Pass, about 500 kilometres east of St. John's. With drilling to happen more than a kilometre underwater, Bay du Nord will be the first project to move the province's offshore oil industry into such deep waters.
Equinor plans to use a massive floating production, storage and offloading vessel, commonly known as an FPSO, capable of producing up to 200,000 barrels daily.
The federal government's approval of the project follows the release of its climate plan last week, which placed a cap on emissions from the oil and gas sector, but did not call for an end to production.
Thumbs-up from oil sector
According to Equinor, the project will create thousands of jobs and generate $3.5 billion in revenue, an attractive proposal for a government that is billions of dollars in debt.
During a news conference with Newfoundland and Labrador officials on Wednesday, the president of Energy N.L. — the association that represents the province's oil and energy sector — touted the merits of the project, saying it would be one of the lowest carbon oil projects in the world.
"The Bay du Nord project is a critical part of our pathway to achieving a net zero energy sector while providing significant jobs and economic benefits," Charlene Johnson said.
While it is true that Newfoundland and Labrador's offshore emits fewer emissions during extraction than other producers, extraction accounts for only about 15 per cent of a barrel's total emissions. When that oil is burned for energy, it produces just six per cent less carbon than diluted bitumen from Alberta's oilsands.
Meanwhile, in a news release, the Canadian Association of Petroleum Producers echoed Johnson's statement.
"Bay du Nord is an environmentally sound project that will provide secure, responsibly developed energy to the world," said a spokesperson.
'We need to be done': Environment advocates
The Intergovernmental Panel on Climate Change released a report last week warning that the Paris Climate agreement goal of limiting global warming to 1.5 C above pre-industrial levels is all but out of reach. On Monday, UN Secretary General Antonio Guterres said investing in new fossil fuel infrastructure would be "moral and economic madness."
Julia Levin, senior program manager at Environmental Defence, said Bay du Nord will produce one billion barrels of oil, which will in turn produce about 400 million tonnes of carbon — the equivalent of running 100 coal factories for a year.
"We have to take responsibility for the impacts of the oil and gas that we put into the world."
Levin said the project only makes sense in a world that has failed to tackle the climate crisis, and pointed to moves by companies and other countries to move away from fossil fuels.
"The demand for oil will plummet, and the question now is whether Canada will be prepared."
Heather Elliott, Newfoundland and Labrador campaigner with the Sierra Club, said she's disappointed by the decision to approve the project.
"We have been told explicitly by scientists and by climate experts that we can't keep expanding fossil fuels. Oil, gas, coal, any of it — we need to be done."