Feds Greenlight Bay du Nord Offshore Oil Project
On April 6th, 2022, it was reported that the federal government had given the go-ahead to Equinor to move forward with their Bay du Nord project that involves deep water oil production. The project will involve using a massive floating production, storage, and offloading vessel (FPSO) that’s able to produce up to 200,000 barrels per day and will contribute roughly $3.5 billion dollars to the economy of Newfoundland and Labrador. Equinor says that the project will produce roughly 300 million barrels of oil over its lifetime and will help create thousands of jobs.
The project is located in the Flemish pass basin which is located about 500 kilometres northeast of St. John’s. This decision comes at an interesting time seeing as how the federal government just released their climate action plan in the 2022 federal budget. While the decision has sparked push back from various environmental organizations, it should be noted that offshore oil drilling is considerably more eco-friendly than traditional drilling methods. Rystad Energy, a data firm, released an analysis in 2021 that found the average amount of CO2 produced by a single barrel of oil in the oil sands was 73 kg while the average for the offshore sector was 17 kg, roughly 4 times less. In fact, the top performers produced only 7 kg, roughly 10 times less. The executives at Equinor have stated that they believe the emissions per barrel from the Bay du Nord project would amount to 8 kg per barrel. However, putting my elementary education to good use, simple multiplication would tell us that 300 million barrels multiplied by 8 kg of CO2 would still see Bay du Nord contribute 2.4 billion kg of CO2 over its lifetime and roughly 1.6 million kg of CO2 per day. Again, that is certainly a drop in the bucket compared to the oil sands, but it’s still a staggering amount of CO2 given that the federal government is aiming for net-zero 12 years after Bay du Nord would begin production.
The project is scheduled to begin production by 2028 and is still bound by all the regulations imposed by the federal government such as reducing greenhouse gas emissions, protecting fish and fish habitats, migratory birds, at-risk species, air quality, human health, and Indigenous peoples’ use of resources. The Impact Assessment Agency of Canada released their final assessment (that you can read in its entirety here) that they conducted over four years and determined that the project is “not likely to cause significant adverse environmental effects when mitigation measures are taken into account”. The provincial government of Newfoundland and Labrador also lifted the moratorium on onshore wind energy which will certainly contribute to the growth of clean energy in the province, and therefore nationally, especially considering Equinor has a desire to be a global leader in wind energy.
It’s hard to see how the federal government can reconcile their commitment to new, lofty emission reduction goals with their approval for the Bay du Nord. It’s understandable that Putin’s war in Ukraine has prompted new concerns over energy independence, especially when coupled with the astronomical rise in gas prices at the pump. It seems the feds are caught between a rock and a bigger rock: trying and planning to reduce emissions in the short and long term while also maintaining enough oil production to sustain the needs of the population in the interim period before the country is able to fully transition to renewable energy. I believe that in that context, Bay du Nord is probably the government’s best bet in the here and now. Perhaps this will lead to an expansion in wind farming in Newfoundland and Labrador. Perhaps not. Maybe we’ll meet our emissions reduction targets. Maybe, again, we won’t. The provincial government did note that based on 2019 emissions data, the project would contribute less than 0.1% of the emissions from the oil and gas sector and less than 0.03% of the nation’s total emissions. It may be that the concerns don’t really lie with Bay du Nord, but rather, with how the government can lower the emissions of the rest of the sector.
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