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Anxiety is running high in Newfoundland and Labrador as the province waits on a federal decision about a proposed offshore oil project about 500 kilometres east of St. John’s.
Equinor’s Bay du Nord project would open a fifth oilfield for the cash-strapped province, whose oil sector was hit hard by the COVID-19 pandemic and crashing global prices, The Canadian Press reports. But there is mounting concern an approval from Ottawa would undermine federal climate commitments and send a message to other provinces that oil and gas is a viable industry on which they can hook their financial hopes.
“If we’re going to be serious about our net-zero commitment and our international commitments, then we cannot approve any new oil and gas projects,” said Debora VanNijnatten, a public policy expert and associate political science professor at Wilfrid Laurier University.
“And we have to have a plan to help those regions that we say ‘no’ to,” she added in a recent interview.
Oil accounted for nearly 21% of Newfoundland and Labrador’s GDP in 2019, according to its latest budget, which also forecasted a deficit of C$826 million and a net debt of $17.2 billion. With an estimated 800 million recoverable barrels of oil in the proposed Bay du Nord site, the project is “critical to the Newfoundland and Labrador economy,” said a statement Thursday from Energy Minister Andrew Parsons.
Meanwhile, Canada has committed to achieving net-zero emissions by 2050 and to doing its part to limit global warming to 1.5°C. Bay du Nord is also among the first oil and gas projects to be considered for approval by the federal government since the International Energy Agency declared in May there can be no investment in new fossil fuel supply projects if the world is going to hit net-zero targets by 2050.
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