Bay du Nord, Canada’s first deepwater offshore oil project, has been put on hold for up to three years partly due to cost increases, project owner Equinor announced Wednesday.

“Bay Du Nord is an important project for Equinor,” said Trond Bokn, senior vice-president of project development for the company, which is the majority owner and operator of the project. However, Bokn said increased costs within the oil market mean the company will have to shift the “concept and strategies” of the project.

In April 2022, Environment and Climate Change Minister Steven Guilbeault approved Bay du Nord, stating it was environmentally sound. He determined the project, about 500 kilometres east of St. John’s in Newfoundland, “is not likely to cause significant adverse environmental effects.” A court case challenging the approval is currently awaiting judgment.

Bay du Nord was an economically risky project to begin with, said Gretchen Fitzgerald, Sierra Club Canada Foundation’s national program director. There is increasing evidence that new fossil fuel projects will end up as stranded assets as the world transitions to clean energy and the demand for fossil fuels goes down.

The Sierra Club, along with Equiterre and Mi'gmawe'l Tplu'taqnn Incorporated (MTI) — a group representing eight Mi’gmaq communities in New Brunswick — launched the case against Bay du Nord’s approval.

“Proposing these mega projects … government leaders talking about them as if people's kids are gonna work on this project tomorrow, it's so reckless. But we are also seeing that the pressure is working,” she said, noting the court case as well as protests at Equinor’s recent shareholder meeting.

Global oil demand will fall by the mid-2030s at the latest, according to a 2021 report from the International Energy Agency, which has also said there is no room for any new fossil fuel projects if the world is going to reach net-zero greenhouse gas emissions by 2050.

In an emailed statement, Tore Løseth, country manager of Equinor Canada, said the company — along with its partner BP — will use the postponement to work on a plan to successfully develop Bay du Nord.

“It is irresponsible of oil companies to claim these projects have stability when they don’t, and people need to know that these projects don’t have stability now in order to make the right decisions for the future,” said Conor Curtis, head of communications at Sierra Club Canada.

Over $238 million worth of exploration licences were handed out following the project's approval, which was held up as a good sign for N.L.'s hopes for an offshore boom. @GreenMission said if Bay du Nord "is your flagship, it’s got a lot of leaks."

“The provincial and federal governments must work rapidly towards a decarbonized economy for N.L. (Newfoundland and Labrador) instead of betting on further oil and gas expansion.”

Bay du Nord’s approval is part of Newfoundland and Labrador’s plan to double offshore oil production by 2030. Before the postponement, Equinor planned to start extracting oil by 2028. Under that scenario, the company would have to spend billions of dollars in the coming years on a project that’s supposed to pump oil for decades, Gregor Semieniuk, an assistant research professor at the University of Massachusetts Amherst, told Canada’s National Observer last September.

Bay du Nord’s approval was seen as a success by the oil industry in the province, which sees the project as a jumping-off point for further exploration. Following the project’s approval — along with years of waning activity in oil and gas exploration in the province — over $238 million worth of exploration licences were handed out to companies in 2022. When Bay du Nord was first announced, then- N.L. premier Dwight Ball described it as kicking off a “new frontier” for the province.

Companies and governments looking at Bay du Nord as an example should take pause, said Fitzgerald, who said the project’s instability shows the precarity of the fossil fuel industry as a whole, and the unfounded confidence N.L. has in the oil industry to help its economy.

“If this is your flagship, it’s got a lot of leaks.”

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At this point, every delay in a fossil fuel project means that much more chance that by the time it does get under way, conditions will have changed, it will be obviously unprofitable, and they won't bother. So, jolly good news.

Where is the primary market for this expensively produced oil? The US car market? Well, surveyed demand for EVs is skyrocketing and Chinese automakers like BTD are poised to fill that demand with affordable models in the next couple of years. VW will also be marketing its attractive ID2 for less than $30K by then.

EU car demand? Same thing, but with the added impetus to protect their own automakers and oil industries, even though Russia provided them with 'inspiration' to wean themselves off all fossil fuels at the same time their offshore wind and rooftop solar are maturing at a frantic pace.

The evidence is mounting that renewables and EVs have just entered the base of the steep incline on the S curve. By the time Equinor is ready to make a final decision on Bay du Nord in three years, their market will probably be visibly fragmenting.

To assuage Canadian thirst for fuel for big useless urban trucks and suburban SUVs? Not a big enough market, and too much affordable electricity on tap to displace unaffordable unconventional (deep sea) oil.

The price at the pump in coastal BC is currently just shy of $2.00 / lt. Our last fill up cost almost $60 for less than 3/4 of a tank in our tiny econobox. In a couple of years we'll be ready to either buy a small EV or give up on car ownership altogether. We've done the latter before for a 10-year period, relying on good shoes and the bus. We could go car share for the several times a month we need to fetch bulk food or garden supplies, but I am reluctant to get in a car with a previous sharer's mess. One patch of stale vomit on the floor will turn me off to car share altogether.

Good seasonal walking shoes, a backpack, a good umbrella and a transit pass will go a long ways in our very walkable neighbourhood. But plugging in a subcompact EV and getting 300 km range from an overnight charge for six bucks will be very convenient for bulk canned goods, bags of Sea Soil and those half dozen trips to Vancouver Island every year.