Page 5 - NorthAmOil Week 14 2022

NorthAmOil COMMENTARY NorthAmOil

Cenovus. According to the company, an FID is environmental groups, who had sought a rejec-
anticipated in the next couple of years, with first tion for the development.
oil then targeted for late 2028. “The time to stop the expansion of oil and gas
production is now,” a March 2 letter to Cana-
Climate concerns dian Prime Minister Justin Trudeau and his cab-
The Canadian government sought to assuage cli- inet from 118 activists and organisations said.
mate concerns when issuing the approval for the “Approving a project that will increase emissions
project. In Ottawa’s announcement, Canadian at the exact time when a policy is being created
Minister of Environment and Climate Change to ensure emissions go down calls into question
Steven Guilbeault said he had accepted the the stringency, ambition and effectiveness of the
Impact Assessment Agency of Canada’s findings emissions cap – a contradiction to the promise
on Bay du Nord’s impact. made in Glasgow.”
“I have determined that the designated pro- But while Canada continues to take steps on
ject is not likely to cause significant adverse decarbonisation in the wake of the Glasgow UN
environmental effects,” Guilbeault said. He Climate Change Conference (COP26), held
added that development could go ahead “sub- late last year, it has also been responding to new
ject to some of the strongest environmental global energy security concerns arising from the
conditions ever, including the historic require- war in Ukraine.
ment for an oil and gas project to reach net-zero Over the past few weeks, as a number of coun- Equinor stated
emissions by 2050”. tries have stated their intention to end imports
Equinor stated that Bay du Nord had “the of Russian oil and gas in response to Moscow’s that Bay du
potential to produce the lowest-carbon oil in actions, Canada has sought to position itself as Nord had “the
the country”. The project is projected to emit an alternative supplier of energy. Ottawa has
around 8 kg of carbon dioxide (CO2) per bar- said it is exploring ways to ramp up exports to potential to
rel produced – five times less than the average the US Gulf Coast – from where the oil can be
Canadian project and 10 times less than the sent on to other countries, including European produce the
average oil sands operation. ones. This week, it emerged that the adminis-
Ottawa’s decision statement set out 137 condi- tration of US President Joe Biden was also look- lowest-carbon oil
tions in total that Bay du Nord will need to meet ing at ways to bolster oil imports from Canada. in the country”.
over its lifespan, including on emissions, fish However, it appears that reviving the Keystone
and bird habitat protection, air quality, human XL oil pipeline from Canada’s oil sands to the US
health and indigenous people’s access. has been ruled out, and in the absence of new
pipeline capacity, efforts to boost shipments of
Pursuing balance Canadian oil will be constrained.
The decision comes as Canada targets net- Bay du Nord offers a maritime route for new
zero emissions on a nationwide level by 2050, Canadian oil production to reach overseas mar-
with a goal of cutting emissions by 40% com- kets. Given onshore pipeline constraints, this
pared with 2005 levels by 2030. Ottawa said will be welcomed by overseas buyers of oil, but,
the Bay du Nord project aligns with this aim, as with any major new oil project, the benefits
but the decision was nonetheless criticised by will not be seen for a few years yet.™

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