N.L. 'all in on oil and gas' for decades to come, premier tells energy conference in St. John's

Premier Andrew Furey sent a strong signal on Tuesday morning that the province's interest in offshore oil won't be going anywhere, despite mounting pressure within the industry to diversify before global demand tails off.

Furey addressed a room full of delegates at the annual Energy N.L. conference on Tuesday morning. His speech, which kicked off the conference, positioned Newfoundland and Labrador as the future "energy capital of North America."

He said the province is poised to cash in on the emerging hydrogen market, while also continuing to produce oil. 

"We will be all in on oil and gas for decades and decades to come," he said. "Because the world needs us to be."

Furey's message was paired with news from ExxonMobil Canada president Kerry Moreland that the oil giant will be investing $1.5 billion in the province's offshore industry this year. That money will be spent on upgrades to Hibernia and Hebron, as well as exploration of the Persephone well in the Orphan Basin — a much-anticipated exploration project within the industry.

Moreland said the Persephone project got underway two weeks ago, and she hopes the company will have more information to release in the coming months.

"It is true frontier exploration," she said, noting the well sits 3,000 metres beneath the ocean surface and more than 500 kilometres off the coast of Newfoundland.

The International Energy Agency believes oil demand will peak in 2030 before beginning to decline, as consumers and corporations transition to cleaner sources and governments adhere to targets for combating climate change.

Despite that, Furey said his government believes there will be a demand for oil from Newfoundland and Labrador for years to come.

"Our industry isn't going anywhere anytime soon," he said.

Hydrogen companies met by protesters

While the Energy N.L. conference used to be dominated by oil industry players, Tuesday marked the second straight year that hydrogen took up at least half the program on opening day.

Representatives from the province's five green hydrogen projects were met by a small group of protesters outside the convention centre in the morning. 

Most were there to protest one project in particular — the World Energy GH2 proposal centred around Stephenville, the Codroy Valley and Port au Port Peninsula. The project has cleared the province's environmental assessment and is poised to be one of the largest and earliest wind-to-hydrogen producers in the world. 

Protesters like Marilyn Rowe don't want hundreds of windmills dotting the natural landscape near their homes.

"We are opposed to this because it's not the right area for it," Rowe said. "We don't want you in Port au Port. Move this project somewhere else. We don't want you."

Inside the convention centre, World Energy GH2 CEO Sean Leet said the project is full steam ahead with a goal of reaching a final investment decision by 2025.

What's standing in the way of that decision? Leet said they've yet to reach agreements with potential buyers for the end product.

Leet said the demand is there, but there's "concern around the tenor of those contracts." Companies like World Energy GH2 are looking for 10-year contracts with buyers to ensure there's going to be stability on the demand side.

"Ten years is the signal that we need from the offtake community for the lending community to step in and say 'OK, we've got an offtaker here that's got a strong enough balance sheet to support this and they want that product.'"

Leet said companies in the European Union need to hit certain clean energy targets by 2030, or face stiff penalties. He believes that threat will drive companies toward sources like green hydrogen.

Among the other issues holding up a final investment decision is the federal government's plans for tax credits to investors in green hydrogen projects. Leet said details should be finalized soon.

The federal budget included some details, including a tax credit of at least 40 per cent for investors in clean hydrogen projects if certain conditions are met. The Government of Canada expects to spend $5.6 billion over the next five years on these investment tax credits. 

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