Poilievre pitches doubling offshore oil production and new East Coast LNG

The Conservative Party platform published Tuesday committed to doubling oil production and greenlighting a proposed LNG facility in Newfoundland and Labrador to “generate another billion dollars in revenue for Newfoundland’s economy, and create thousands of new jobs.”

The promise echoes the NL government’s commitment to double offshore oil production by the end of the decade in an effort to even out the province’s struggling balance sheet, which experts say would be a significant blow to Canada’s emission reduction targets. 

This federal election has seen a broad debate over the future of oil and gas in Canada, with the front-running party leaders pitching visions for the country to “unleash” its resources or become a “clean and conventional energy superpower.” 

Western Canada has dominated the conversation, including pitches for new pipelines to get Alberta crude to new markets and LNG export terminals dotting BC’s coast. But also important, though far less discussed, is the future of fossil fuels off the East Coast as plans to develop new oil fields continue to swirl. 

Data reviewed by Canada’s National Observer shows new offshore oil leases are about to come up for auction — but whether there will be many buyers is an open question, as is whether leases would ever be developed.

That hasn’t stopped the politics from factoring into the election. Poilievre’s offshore dreams are shared by the province’s industry association, Energy NL, which sent a letter to each of the federal parties late last month. The letter highlighted the group’s opposition to the federal emissions cap and questioned whether each party leader would support the use of the province’s “lower carbon offshore oil to meet global demand.”

In the Conservatives’ response, the party highlighted the “need to get out from under America’s thumb” by expanding Canada’s natural resources, making the country “sovereign and self-reliant to stand up to Trump from a position of strength.” 

On Thursday, Charlene Johnson, CEO of Energy NL, told St. John’s-based radio station VOCM she likes what she’s hearing from the Conservatives.

“They answered all the questions with exactly what we wanted, and then some,” she said. “But again, we’re hearing some positive signals from the Liberals too. Not as definitive as we would like to see, not specifically ‘the emissions cap is gone,’ but I think there’s something there to work with.”

Offshore oil’s potential to diversify Canada’s trading partners away from the US was a sentiment shared at the recent right-wing Canada Strong and Free Network conference by former president of the Canadian Association for Petroleum Producers Tim McMillan, now a partner at Garrison Strategy.

Speaking to a room full of Conservative supporters, McMillan said Atlantic offshore oil “has global capacity because it is seaborne.” He said rather than a new east-west oil pipeline, Eastern and Atlantic Canada should produce more oil and gas themselves.

“We could build an east-west pipeline. Would that be the most efficient next pipeline for Canada? Probably no,” he told the room. “I think that it would be putting a band-aid on a bigger problem when we could be producing very high-value economic resources in our large provinces in Eastern Canada, as well as in Atlantic Canada.”

‘A powerhouse in the clean economy’

Meanwhile, there is no response from the Liberals on Energy NL’s website, and the party did not respond to multiple requests for comment by deadline. Under Justin Trudeau, the Liberals approved Bay du Nord, Canada’s first deepwater offshore oil project, which is about 500 kilometres east off Newfoundland’s coast. The party has maintained a level of strategic ambiguity around its stance on oil and gas development.

The NDP, which did not provide a response to questions from Canada’s National Observer on offshore oil in Atlantic Canada, also wrote back to Energy NL. While the Conservatives said they would “immediately scrap Bill C-69,” which includes the Impact Assessment Act, the NDP said it “supported Bill C-51, ensuring Atlantic Canada can harness renewable offshore energy, and be a powerhouse in the clean economy.” (The party was presumably referring to Bill C-69, as Bill C-51 relates to the criminal code.)

The party did not take a stance either way on the offshore oil and gas industry, and instead said it will work with NL on “critical minerals, wind and hydrogen, electrification and [carbon capture and storage],” which the province has highlighted as “key priority areas.”

While the other federal parties maintain varying levels of commitment to supporting NL's offshore oil and gas industry, Green Party Leader Elizabeth May says her party is the only one “that's called forever for a moratorium on any offshore drilling.” She said her party did not receive Energy NL’s letter.

In an interview with Canada’s National Observer, she emphasized how “extremely incompetent” both NS and NL’s offshore energy boards are, both of which are responsible for releasing and rewarding bids for companies to explore the Atlantic for oil and gas deposits. She says both are “pro fossil fuel organizations … they are mandated in their creation to expand offshore oil and gas.”

Meanwhile, the Atlantic Ocean off the coasts of NS and NL is teeming with marine life — leatherback sea turtles and North Atlantic right whales. The area “is just an ecosystem that cannot tolerate any development,” said May.

And while Poilievre says billions will be generated by expanding the offshore industry, May says the International Energy Agency, the IPCC and the World Bank have said that “no country should be creating any new fossil fuel infrastructure.” 

The International Energy Agency’s most recent forecast shows oil, coal and gas demand peaking before the end of the decade. This scenario, based on world governments’ existing policies, still overshoots the global goal to limit global warming to no more than 1.5 C to avoid the worst impacts of climate change.

The IEA has repeatedly said that if the world is going to avoid crossing that dangerous 1.5C threshold, there is no room in the global carbon budget to develop new oil and gas fields — a finding squarely at odds with Newfoundland and Labrador’s stated plan to double offshore oil production by 2030. 

New exploration licenses up for bid

Data obtained by Canada’s National Observer shows 33 exploration licenses for Newfoundland and Labrador and Nova Scotia’s offshore will be made available to companies this year, which if developed, would add emissions equivalent to nearly 51 million cars per year over their lifetimes. The figures were originally sourced from the Rystad Database and were included in the International Institute for Sustainable Development’s Carbon Minefields Newsletter.

Angela Carter, Canada research chair in equitable energy governance and public policy and an associate professor at Memorial University of Newfoundland and Labrador, called those emissions globally significant and dangerous. 

“If we want to preserve some amount of climate safety there can be no new exploration, no new fields developed, and indeed existing projects have to be wound down to align with climate safety,” she said. “There's no room in the global carbon budget for these projects, that's the fact of the matter.”

Carter said she is concerned because pro-oil and gas rhetoric is ratcheting up in Newfoundland and Labrador. 

“We are still major players when it comes to producing oil. That is important for Canada, for the world and for the climate,” Newfoundland and Labrador Premier Andrew Furey told the Empire Club of Canada in December. “This is the product the world needs right now, and it would be irresponsible for us not to develop it.”

In June, Furey made similar comments at the Energy NL conference, framing the province’s oil as “pipeline-free” and pledging to “be all-in on oil and gas for decades and decades to come.”

“This is very jarring,” Carter said. 

Instead of doubling down on oil and gas, she said, the province needs “an exit plan” from financially volatile fossil fuels — which accounted for 14 per cent of the province’s GDP in 2023 according to its most recent budget. 

Even with no exit plan in sight, the public could be watching the industry’s last gasps. Over the past decade two trends have emerged: the offshore regulator has increased the number of exploration licenses up for bid while at the same time, there is a clear decrease in the number of parcels actually being awarded. 

“Basically what's happening — not because the board is somehow becoming more careful — it's that firms are not acquiring the lease blocks anymore,” Carter said. On top of that, major fields expected to hold billions of barrels of oil have turned out to not be commercially viable. 

“I think we're seeing evidence of firms slowly withdrawing from the offshore here,” she said. 

“The exploration that is occurring is coming up dry, and so now [oil proponents] have a lot of aspirations for Bay du Nord,” she said, because if that project proceeds, it would open up a region called the Flemish Basin, which to date has no active oil development.

Bay du Nord is a proposed project owned by Equinor that the federal government approved in 2022. The company has not decided whether to proceed with it, after determining there would be major cost increases from its original $16 billion estimate. 

As part of its goal to improve the economic justification for Bay du Nord, last year Equinor began drilling nearby deposits. In November, Equinor announced it had completed its exploratory drilling without finding significant deposits.