Offshore natural gas is Newfoundland and Labrador’s latest pitch for development that it claims will be “part of the solution to the global path toward-net zero emissions” despite ample evidence that fossil fuels like oil and gas must be phased out to reach climate targets.
Last week, the province announced findings from its natural gas resource assessment, which looked at the recoverable volume of natural gas from previously discovered deposits in the Jeanne d’Arc Basin, about 340 kilometres off the coast. The assessment concluded the natural gas resource base ranges from 8.1 to 11.3 trillion cubic feet, and that other adjacent deposits were also discovered. As a comparison, Nova Scotia’s Sable Offshore Energy Project recovered two trillion cubic feet of natural gas during its 20-year lifespan, the N.L. government noted.
Following the assessment, Minister of Industry, Energy and Technology Steve Crocker said that natural gas is considered a transition fuel and that the discovery could help extend the life of oil projects in the area by justifying the business case.
“In the future, natural gas production may play a crucial role in ensuring that the oil and gas sector continues to support the province’s economy and revenue streams,” he said.
The oil and gas industry applauded the assessment, calling it a positive step forward for the sector. Energy NL CEO Charlene Johnson said there is already expertise in offshore oil, which could be applied to the development of the gas industry as well.
The rhetoric fits into a broader push by the province to significantly expand offshore fossil fuel production. The province is committed to doubling offshore oil production by the end of the decade to even out its struggling balance sheet, which experts say would be a significant blow to Canada’s emission reduction targets. The province touts its offshore oil as low-carbon, because extracting oil off the shore of N.L. emits fewer greenhouse gases compared to Alberta’s oil sands (which generate 2.2 times as many emissions per barrel than the average crude extracted in North America). However, the claim refers only to emissions during the production phase and ignores those generated when oil and gas is burned, which is the primary source of climate change.
And while Crocker and others dub natural gas a “transition fuel” from fossil fuels to renewables, it is made mostly of methane, which is responsible for approximately a quarter of global warming and is over 80 times more powerful than carbon dioxide (CO2) for the first 20 years in the atmosphere. Natural gas production is a huge source of methane leaks in Canada and the gas also produces CO2 when burned.
“The problem is that when people say we are going to start developing low-carbon fuels, they have no mechanism or control to do that in place of the high-carbon fuels,” explained Memorial University Geography professor, Joel Finnis, referencing the prospect of offshore natural gas.
“In Canada, Saskatchewan plans to ramp up production. Alberta plans to ramp up production. Nobody's talking about ramping down production … that's always left to somebody else.”
N.L.’s insistence on developing offshore natural gas — which would take years to reach production — ignores the fact that the world needs to reduce the production of fossil fuels, said Finnis.
According to the International Energy Agency, worldwide oil and gas demand is set to peak by 2030, and no new fossil fuel projects are needed for the transition to net-zero greenhouse gas emissions by 2050.
“I suppose you could make a case for closing some fields and opening others, but there is not any system of cooperation in place that would allow that to happen,” said Finnis, explaining that offshore oil and gas isn’t replacing onshore fossil fuels, it’s just adding to them.
“...there's no instance where I can imagine that Alberta is going to say, ‘Oh, great, you take over this production. We'll shut down this’ — right?”
Meanwhile, a 2020 International Institute for Sustainable Development analysis also found that after 2030, global demand for oil will start to sharply decline, and stresses that Canada needs a plan to avoid these big upfront investments becoming stranded assets.
Meanwhile, there are signals from the offshore industry itself that these types of projects might not be worth pursuing, said Jim Dinn, the leader of the provincial NDP. One example is the Bay du Nord project, which was approved by the federal government in 2022 but is currently on hold due to cost increases and is still waiting to be sanctioned. He notes that any fossil fuel — including offshore natural gas or oil — produces harmful greenhouse gases when burned.
Dinn says the province should be focusing on a just transition away from fossil fuels, but notes that it's been resistant to that framing in the past. In 2022, Dinn put forward a private members resolution asking the province to adopt just transition planning, which was defeated.
“How do we protect our own economy, our workers, the environment?” he said, noting that workers should be supported to transition to working in renewables. “We’ve already got a planet that’s warming.”
Comments
When it comes to energy, Newfoundland has squandered opportunities to diversify their economy. Wind power should have been developed decades ago but the oil and gas lobby prevented this from happening. Instead, the city of St. John's and surrounding communities continue to rely on the ancient (1970) Holyrood power generating station that burns bunker sea oil. The plan is to keep this high emission plant running beyond 2030. Holyrood was supposed to be replaced by hydroelectric power from Muskrat Falls in Labrador but this facility has been plagued with problems. One wonders how Quebec manages to deliver hydroelectric power from Churchill Falls without major issues even though it faces the same weather and geographical challenges as Muskrat Falls. Continuing to put all the province's eggs in the oil and gas basket is sheer folly.
A friend in Adelaide writes
“ Our newly-re-elected Labour has just extended Woodside’s massive natural gas plant licence out to 2070, to encourage them to plan extraction from the Browse Basin. It’s a huge offshore gas site, including an unusually high proportion of CO2, and in full the carbon load equals about a decade of Australia’s total emissions,”
This all insanity.
"Minister of Industry, Energy and Technology Steve Crocker said that natural gas is considered a transition fuel"
Well now there's a careful statement. If he said natural gas IS a transition fuel, that would be false because it is not. But far too many people do CONSIDER it a transition fuel because they have fallen for lies, so saying it is CONSIDERED a transition fuel is technically correct. It's almost refreshing to see a politician try to mislead you the old fashioned way instead of barefaced lying like a rug the way Conservatives and Republicans do nowadays.
Hahaha, yeah, that's where we are isn't it?
In addition, they almost never describe what gas is supposed to be transitioning to. If they said "away from coal," that is technically correct but still ignores the forward direction of the transition. If they admit it's "toward low / zero carbon energy" then that exposes them to the next logical question: Why not jump directly into zero carbon energy and save a bundle of money while they're at it?
What is this obsession with the supply of fossil fuels? Just because a province possesses billions of barrels or trillions of cubic metres of the stuff in whatever form doesn't mean that getting it out of the ground and into pipes and ships will automatically create demand.
Supply and demand are components of the same basic Econ 101 equation. Equations begin being taught at middle school. How long will a Grade 10 math teacher get if s/he wrote out only half of the equations on the backboard?
That is possible only when you have a clown politician posing as a substitute teacher who replaces standard curricula with doublespeaking bafflegab that includes a few tasty, colourful semi-valid numbers sprinkled on top.
A quick look at world supply and world demand will indicate an unbalanced equation if supply is increased beyond estimated demand. Offshore gas in NF, oil sands bitumen in AB, LNG in BC .... where are the markets for this stuff 10 years out?
Another way to look a it is at the beginning of a supply-demand curve. You don't wave a magic wand to instantly produce a house. You go to the bank and get a mortgage (investment). Then you organize architects and engineers to supply plans that follow all the appropriate codes. Then your consultants put it out to tender and a contractor is retained to build it. You're looking at two, maybe three years from the first sit down with your banker to being handed the keys to your new home.
Several reputable international energy analysis organizations have been tracking supply, demand, investments and new power generation from freshly completed projects. The annual investments in clean energy has now reached US$2.2 trillion, roughly double the investments in fossil fuels worldwide.
It doesn't take a nuclear physicist to see that in 2-5 years those huge investments in renewables will be adding enormous amounts of new power to the world energy supply. In addition, worldwide coal-fired power has peaked, and 45% of the world's oil goes into land transport. The replacement of coal and liquid fuels with electricity is happening.
The beauty of all this is that the transition it is not coming around mainly through political policy, though that can be a catalyst once the fossil lobbyists are ignored (hard to do when they're slinging so much donation money around). But it's occurring because the public is demanding it. It's not just about climate mitigation and carbon tariffs, but about better technology as the world digitizes and saves money in operations over the decades.
Tech change is a powerful tool. And "electro tech" is leading the charge, so to speak. It's important to remind decision makers that climate change needs much more direct policy to reduce overall emissions, but obviously that has not been enough given all the pipeline BS still raining down. It's equally important to remind decision makers that their pipe dreams take a decade to materialize, and renewable technology is moving an a wave well ahead of them. Oil and gas is in for a rude awakening in the 2030s and no politician is willing to admit that their narrative today is helping to create the stranded assets of tomorrow.
Every politician and pro-fossil fuel advocate needs to be challenged to produce top level independently-confirmed business plans, demand analysis and professional risk assessments. Put them on the spot, especially when so much public money is being begged for. Show their numbers. Then let the independent energy analysts cast their critical eyes on industry's numbers.
At his stage I don't see Mark Carney being willing to have a legacy of building stranded assets, but one could be surprised. Danielle Smith, Scott Moe, David Eby (on LNG, though not on renewables) and Doug Ford are another matter.