Page 4 - NorthAmOil Week 04

NorthAmOil COMMENTARY NorthAmOil
Contentious oil sands project decision looms for Ottawa
A pending decision on whether to approve Teck Resources’ Frontier oil sands project illustrates Ottawa’s challenge in balancing environmental targets with its commitment to Alberta’s interests
CANADA
WHAT:
Ottawa is due to make a decision on the Frontier project next month but may extend the deadline.
WHY:
The federal government is trying to balance environmental targets with promoting Alberta’s energy industry.
WHAT NEXT:
Canada has a target of net zero GHG emissions by 2050 but expects the country to need oil for years to come.
A deadline is looming for Ottawa to make a deci- sion on whether to approve Teck Resources’ pro- posed Frontier oil sands mine. A decision on the project is due by the end of February, though a Canadian minister said this week that the dead- line could be extended.
The looming decision illustrates the dilemma that Canadian Prime Minister Justin Trudeau is faced with. Oil sands development has been a contentious issue, with critics maintaining that the industry is considerably more carbon-inten- sive that other types of oil megaprojects. And last year, federal research from Environment Can- ada found that carbon dioxide (CO2) emissions from some major oil sands mines could be about one-third higher on average than the figures that were being reported.
Oil sands producers, for their part, have been trying to turn their image around and some newer projects are able to produce fewer green- house gas (GHG) emissions. There is still a long way to go, however, in term of both emissions levels and public image.
Meanwhile, Canada’s Liberal government has committed to a target of net zero carbon emissions. The government continues to come under fire from environmentalists, who claim that any further support of oil and gas projects undermines Ottawa’s efforts to meet its climate goals. Indeed, environmentalists would be likely to see approval of Frontier as proof that
the government is failing to work towards its net zero emissions 2050 target. Given environ- mental opposition to the oil sands in particular, a decision on Frontier is going to be particularly contentious.
On the other hand, if Frontier is rejected, this will provoke anger in Alberta, where the Liberals are already struggling to find support. In the fed- eral election in 2019, the Liberals lost their three seats in Alberta – also failing to win a single seat in Saskatchewan, another oil-producing prov- ince. The Liberals also failed to win any seats in Alberta’s provincial election, held earlier in 2019.
Alberta Premier Jason Kenney said this week that Trudeau needed to prioritise Frontier’s approval, and that there was no reason to delay the project.
Trudeau’s Liberals have maintained that the production of domestic oil and gas – as well as its export to overseas markets – remains in Can- ada’s interest, and that dependence on fossil fuels will continue for years to come. But Alberta’s politicians have been critical of the federal gov- ernment for not doing enough to back up this rhetoric with action.
If Frontier is rejected – or delayed further – Kenney and others are likely to view this as fur- ther proof that Ottawa is failing Alberta.
Megaproject
For the oil sands industry, the approval of a new
The process Teck would use at Frontier if the project goes ahead
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w w w. N E W S B A S E . c o m Week 04 29•January•2020