Canada delays final decision on first deepwater offshore oil project

Those eagerly awaiting a decision on a $6.8-billion oil project off the coast of Newfoundland and Labrador will have to hold out a bit longer — the decision on Bay du Nord has been extended 40 more days.

On Friday, the Impact Assessment Agency of Canada (IAAC), which leads the environmental review process, announced the decision on the project, 500 kilometres east of St. John’s, would be postponed for a second time. The decision day was also pushed back in December, allowing for 90 more days.

The IAAC said the extension was granted to give the Environment and Climate Change Minister Steven Guilbeault more time to consider the “amount of complex information and make an informed decision.”

“The Government of Canada recognizes the importance of the decision on Equinor’s proposed Bay du Nord Development Project,” read part of a statement from the IAAC.

“The Minister of Environment and Climate Change must review the extensive information prior to deciding whether the Bay du Nord Development Project is likely to cause significant adverse environmental effects.”

The project is being proposed by Norwegian energy giant Equinor and its partner company Husky. If approved, it would become Canada’s first deepwater drilling site. While existing offshore oil projects in the country drill down 100 metres or less, this project would see drilling take place at 1,200 metres. It would include numerous exploration and discovery licences, the creation of a floating oil production station and the drilling of up to 40 wells in the Flemish Pass Basin.

Bay du Nord has faced fierce pushback from environmentalists and those calling for a just transition for Newfoundland and Labrador. This week, hundreds signed letters urging the government to reject the project and students have been staging weekly protests in Montreal.

Those opposed are worried about the impacts the 200,000 barrels a day that Bay du Nord plans to extract would have on the climate, especially in light of the most recent IPCC report. Along with the 30 million tonnes of carbon dioxide the project would emit each year, environmentalists worry what a spill or blowout would mean for the area.

Not only that, but the environmental assessment cabinet is currently basing its decision on doesn’t adequately address the risk of an accident or the impact Bay du Nord would have on corals, sponges and whales, said Gretchen Fitzgerald, national programs director for Sierra Club Canada.

“Today we had hoped that Canada would show much-needed leadership on climate change and that our government is ready to make the tough decisions needed for a safe climate future for all,” she said.

“Even hesitating to approve [a] new oil and gas project makes Canada look like a hypocrite on the world stage, where we claim to want to be climate leaders and where we’ve committed to halt support for fossil fuel projects abroad.”

At the same time, some politicians in the area are touting the project as a necessary lifeline for Newfoundland’s economy. On Thursday, Premier Andrew Furey and his Industry, Energy and Technology Minister Andrew Parsons released a joint statement in support of Bay du Nord.

That pushback is partly what’s stopping a rejection on Bay du Nord, said Conor Curtis, digital communications co-ordinator with the Sierra Club Canada Foundation.

“I am deeply saddened to see the provincial government ... is still listening to the echo chamber of oil lobbyists who know these projects contradict climate targets and do not have an economic future. There are many in the province who want a green transition. The federal government needs to hear those voices, too,” said Curtis.

“It’s shameful that proponents of oil and gas have chosen to try to frame a humanitarian crisis resulting from Russia's invasion of Ukraine as an ‘opportunity’ for developing projects like Bay du Nord, projects that would take years to come online and would have no impact on the immediate situation.”