Controversial $12Bn Bay du Nord Project Approved Despite Protests

Controversial $12Bn Bay du Nord Project Approved Despite Protests
The government of Canada has approved the controversial and contested Equinor-operated Bay Du Nord deepwater oil project.

The government of Canada has approved the controversial and contested Equinor-operated Bay Du Nord deepwater oil project following several delays.

Following a thorough and science-based environmental assessment conducted by the Impact Assessment Agency of Canada over four years, Steven Guilbeault – the Canadian Minister of Environment and Climate Change – has approved the Bay du Nord project.

Namely, he agreed with the conclusions in the Agency's Environmental Assessment Report that determined the proposed Bay du Nord Development Project was “not likely to cause significant adverse environmental effects when mitigation measures are taken into account.”

As a result, the project is allowed to proceed with strict measures to protect the environment and a Decision Statement has been issued.

The Decision Statement sets out 137 legally binding conditions that Equinor must comply with throughout the life of the project. These conditions include requirements to reduce GHG emissions and measures to protect fish and fish habitat, migratory birds, species at risk, air quality, human health, and Indigenous peoples' use of resources.

For the first time, a Decision Statement has also been issued requiring the proponent to achieve net-zero GHG emissions by 2050.

In addition to reaching net-zero emissions by 2050, Equinor is also legally required to consider the best available and new technologies to allow for the adaptive management of GHGs as well as incorporate measures to reduce GHG emissions in the design of the project.

Equinor will report to Environment and Climate Change Canada and to the C-NLOPB on how these measures will be incorporated into the final project design.

As per current plans by the Norwegian giant, Bay du Nord is planned to be five times less emissions-intensive than the average Canadian oil and gas project and ten times less than the average project in the oil sands.

The project also fits within Canada’s plan to reach an overall 40 percent reduction in emissions compared to 2005 levels by 2030, as laid out in the Emissions Reduction Plan. It also fits within a projected sectoral emissions reduction contribution of a little over 30 percent from 2005 levels from the oil and gas sector, as the Government moves forward on capping and cutting oil and gas sector emissions.

This Decision Statement comes after the Government of Canada and the Government of Newfoundland and Labrador announced an intent to expand the mandate of the Canada-Newfoundland and Labrador offshore energy regime to include the development of renewable energy such as offshore wind and clean hydrogen.

"The federal government concurs with the recommendation of the Impact Assessment Agency of Canada. As a result, the Bay du Nord Development Project may proceed, subject to some of the strongest environmental conditions ever, including the historic requirement for an oil and gas project to reach net-zero emissions by 2050.

“The project has undergone a robust federal environmental assessment and scrutiny through every part of Canada's legislated review process," Guilbeault said.

Environmentalists Up In Arms

The project has been protested by many environmentalist groups. Before the last delay, over 200 Canadian and international environmental groups and individuals sent two letters to the federal cabinet demanding the Bay du Nord project be rejected.

The groups claimed that new oil, gas, and coal development risks could result in a possible ‘catastrophic climate change.’

At the time, an organization named Environmental Defense stated that the Bay du Nord oil reserve was ‘estimated to contain 300 million barrels. Now, with new research, that has ballooned to a possible one billion barrels. Digging up and burning 1 billion barrels would result in well over 400 tons of carbon pollution over the project’s 30-year lifetime. That’s the equivalent of running 100 coal-fired power plants for a year’.

As expected, the decision for the project to go ahead didn’t sit well with those organizations. One of them, the Sierra Club Canada Foundation, said that the approval given to the Bay du Nord project shows that the Canadian government ‘would not act to protect our environment and our federal government has abandoned our responsibility to be climate leaders’.

It carried on by stating that there was ‘no such thing as green oil’ and that ‘the measures announced for a just transition are nothing more than a smokescreen and will not offset in any way the massive negative climate impacts that will be caused by Bay du Nord’.

“Bay du Nord places whales, deep-sea corals, and other ocean life at risk from spills, noise, and vessel traffic. We cannot allow this approval to stand and will be working tirelessly to ensure the project does not proceed,” states Gretchen Fitzgerald, National Program Director, Sierra Club Canada Foundation.

“Equinor could do the right thing here, they could show they care about the climate, withdraw from the Bay du Nord project, and instead propose an offshore wind project for Newfoundland and Labrador,” states Conor Curtis, Digital Communications Coordinator with the Sierra Club Canada Foundation.

“We are glad that due to public pressure the government has finally ended a 15-year ban on building wind energy off the coast of Newfoundland and Labrador this week. This would be a timely and ethical decision for Equinor to make,” Curtis added.

Bay du Nord

The Bay du Nord field is in the Flemish Pass some 310 miles east of St. John's. The operator – Equinor – estimates that the project will emit as little as 8kgCO2 per bbl of production, compared to the average oil sands emissions of 80kgCO2/bbl and the overall Canadian average of 40kgCO2/bbl.

Recoverable estimates for Bay du Nord are at around 300 million barrels of oil. Further discoveries announced last year could see those estimates substantially increase. According to certain sources, start of production could occur in 2028.

According to the Norwegian giant, the project will be a $12 billion investment and will contribute an estimated $3.5 billion in government revenue, 11,000 person-years of employment, and $300 million in research and development.

To contact the author, email bojan.lepic@rigzone.com


What do you think? We’d love to hear from you, join the conversation on the Rigzone Energy Network.

The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.