Canada

Federal government to approve controversial Bay du Nord oil project

With water depths of some 1,200 metres, Equinor’s Bay du Nord challenge will use a floating manufacturing, storage and offloading vessel, higher often known as an FPSO, just like the one pictured right here on this illustration. Officers with Equinor say a ultimate funding determination is anticipated inside two years, with first oil earlier than the top of this decade. (Equinor)

The federal authorities will formally approve the Bay du Nord offshore oil megaproject after markets shut at 4 p.m. ET, CBC Information has discovered from a number of sources who are usually not licensed to talk publicly.

CTV was first to report the information.

Bay du Nord has been panned by environmental activists and local weather scientists, who say it flies within the face of the federal authorities’s local weather targets.

The challenge has additionally brought about disagreement inside Prime Minister Justin Trudeau’s Liberal cupboard. In February, Radio-Canada reported that cupboard members from Quebec, Ontario and British Columbia had been against its approval.

The Newfoundland and Labrador authorities has fiercely championed the challenge, with Premier Andrew Furey lobbying fellow Liberals for months. 

“I believe there’s an crucial that we actually look to the federal authorities to make sure that that is going to be permitted,” he informed reporters in late March.

Norwegian oil firm Equinor and its companions plan to develop the oil area on the Flemish Go, about 500 kilometres east of St. John’s. Bay du Nord would be the first challenge to maneuver the offshore oil trade into such deep waters, with drilling greater than a kilometre underwater. 

Their plan is to make use of a large floating manufacturing, storage and offloading vessel, generally often known as an FPSO, able to producing as much as 200,000 barrels day by day.

The challenge will probably be Newfoundland and Labrador’s fifth offshore oil area in manufacturing, and can start producing as early as 2028.

​Bay du Nord — seen as an financial lifeline to Newfoundland and Labrador, whose financial system has been depending on offshore oil royalties and labour — has been years within the making. ​

Equinor deferred the challenge in 2020 after oil costs plummeted within the early months of the COVID-19 pandemic, however introduced it was forging forward in 2021. The corporate says the challenge, which has not but been formally sanctioned, will produce about 300 million barrels of oil, generate $3.5 billion in authorities revenues, and create hundreds of jobs. 

Federal Surroundings Minister Steven Guibeault’s determination on whether or not Bay du Nord would proceed was initially scheduled for December, however was delayed till March 6. 

Guibeault missed that deadline too, and the federal authorities stated it wanted extra time to evaluate whether or not the challenge is prone to trigger “important adversarial environmental results.”

The federal authorities final week launched a local weather plan that included measures to scale back emissions from oil and gasoline, however stopped wanting limiting plans for manufacturing.

The N.L. authorities and proponents within the oil trade have touted the so-called “low-carbon” content material of the oil that may be produced by Bay du Nord, calling the challenge a vital a part of a transition to renewable vitality. Local weather scientists and environmentalists have scoffed on the description. 

Newfoundland and Labrador’s offshore does emit fewer emissions throughout extraction than different producers, however extraction solely accounts for about 15 per cent of a barrel’s complete emissions. When that oil is burned for vitality, it produces simply six per cent much less carbon than diluted bitumen from Alberta’s oil sands.

Read more from CBC Newfoundland and Labrador

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