Federal rule on oil and gas projects ‘does not stand up to the facts’

Cloe Logan

Apr. 11, 2022

Last week, Environment and Climate Change Minister Steven Guilbeault announced the approval of the deepwater oil project Bay du Nord with 137 conditions, including a requirement the project achieves net-zero greenhouse gas emissions by 2050.

That same day, Environment and Climate Change Canada (ECCC) announced the requirement would also apply to all future oil and gas developments.

Those opposed to all new fossil fuel developments were quick to point out that calling any oil and gas project net-zero is misleading. Even if companies could make their products without any emissions, which so far none have, all oil and gas produce emissions when burned.

So-called Scope 3, or tailpipe emissions, are not accounted for in the government’s calculations, therefore the very definition of net-zero “does not stand up to the facts,” Angela Carter, an associate professor at the University of Waterloo and a member of the Newfoundland and Labrador government’s Net-Zero Advisory Council, told Canada’s National Observer.

She noted N.L., along with Canada as a whole, is not on track to meet its climate targets, and new oil and gas development will further hinder those goals.

Although the operation of Bay du Nord will emit less carbon than its oilsands counterparts during production, once that oil is burned, the emissions are all the same, she noted.

Bay du Nord will be operated by Norwegian energy giant Equinor and its partner company Husky, and includes numerous exploration and discovery licences, the creation of a floating oil production station and the drilling of up to 40 wells in the Flemish Pass Basin. It won final approval April 6.

Carter said moving the project forward makes any climate commitments a “farce” and noted the latest Intergovernmental Panel on Climate Change (IPCC) report stressed the need for no new fossil fuel projects.

The lion’s share of emissions from any project, no matter how clean it is during the production stage, are released when oil is burned. Canada’s National Observer columnist Barry Saxifrage did the calculations — on average, Scope 1 and 2 emissions (which happen during production) emit 65 kilograms of carbon dioxide (kgCO2) per barrel of oil, whereas Scope 3 emissions average 430 kgCO2/barrel, or around 87 per cent of the total emissions that come from oil.

Graphic by Barry Saxifrage

He also did the math specifically for Bay du Nord. Equinor plans to extract 200,000 barrels a day from the project, which would add 30 million tonnes of CO2 (MtCO2) to the atmosphere each year it’s burned. During production, the offshore project will emit carbon dioxide at about one-eighth the rate of Suncor's proposed Base Mine expansion in northern Alberta at the Scope 1 stage, which Guilbeault recently called out for being too high.

So-called Scope 3, or tailpipe emissions, are not accounted for in the government’s calculations, therefore the very definition of net-zero “does not stand up to the facts,” said @AngelaVCarter about #BayduNord.- -Twitter 

Bay du Nord ‘not likely to cause significant adverse environmental effects’

Nonetheless, the federal government justifies approving Bay du Nord by promising Equinor will be required to track its progress in cleaning up emissions and eventually reach net-zero during the extraction phase.

Oliver Anderson, director of communications for ECCC, pointed to the new rules that require oil and gas projects undergoing environmental assessment to be net-zero by 2050 as a major step forward for the approval process.

He said Bay du Nord will have significantly less impact on the environment than current oil and gas projects, and referenced stats from the Impact Assessment Agency of Canada that peg Bay du Nord's emissions at eight to nine kilograms of GHG per barrel compared to a typical oilsands project, which emits 80 kilograms of GHG per barrel.

When asked about Scope 3 emissions, Anderson said cutting back on pollution from the production of oil and gas will still have a big impact, since 25 per cent of Canada’s emissions come from the production of oil and gas.

“Consumption emissions are usually accounted for separately. We usually count those in all the other areas of our emissions profiles — transportation, electricity,” he said.

“And so the government, at the same time, is doing a lot and investing a ton and will continue to transition into cleaner energy.”

However, if the oil is exported, it won’t be counted in Canada’s emissions data at all.

The specifics of how Bay du Nord will reach net-zero are still up in the air, but Anderson said carbon capture and reducing methane leakage are both good examples of how that could be achieved.

The controversial carbon capture investment tax credit was the biggest-ticket climate item from last week’s budget, with the Liberals putting $2.6 billion over five years toward projects that store carbon dioxide underground or in concrete. In March, over 30,000 people called on the federal government to stop funding carbon capture, noting that “despite decades of investments, current (carbon capture) capacity is just .001 per cent of global emissions.”

Environmental groups such as the Climate Action Network said they were hoping for more money towards a just transition away from oil and gas and tangible emission cuts for the sector.

“This budget is a failed attempt to respond to the urgency of the moment. The climate and energy security crises require a vision and a transition plan that prioritize the needs of people and communities everywhere,” said Eddy Pérez of Climate Action Network Canada.

“... Minister Freeland has announced that Canada still intends to keep the fossil fuel industry in the driver’s seat by giving them expensive tax credits instead of using those funds to invest in a safe, sustainable future.”

Again, Carter stressed the most recent IPCC report, which said transitioning to renewable energy such as solar and wind is essential in reducing emissions. On the same day as the Bay du Nord approval, it was announced the N.L. onshore wind farm ban would be lifted, and that the potential for offshore wind was on the table. Wind potential in the province has been called “remarkable” — it has some of the strongest winds in North America.

“We know based on the analysis from the IPCC ... that there's simply no room in the carbon budget for any more new projects,” said Carter.

“So I don't know how, I don't know why it is that we somehow get to defy science.”