Advertisement

Teck Resources withdraws application for $20B Frontier oilsands mine

Click to play video 'Teck Resources withdraws application for Frontier oil sands mine' Teck Resources withdraws application for Frontier oil sands mine
WATCH ABOVE: Teck Resources has announced it is not going forward with its Frontier mine project. The development was expected to create thousands of jobs, but has now left politicians pointing fingers. As Breanna Karstens-Smith reports, it's a major blow for the oilsands industry in Alberta. – Feb 23, 2020

Mining firm Teck Resources has decided to withdraw its application for the Frontier mine project, Global News confirmed.

The proposed $20.6 billion oilsands mining project had been subject to federal government approval. A government decision was expected before the end of February. Teck says it will write down the $1.13 billion carrying value of the project.

The company says it is “disappointed” to have made this “difficult decision.”

In a letter addressed to the federal Minister of Environment and Climate Change Jonathan Wilkinson, Teck CEO and president Don Lindsay said the decision was made in light of the broader conversation around climate change in Canada.

Story continues below advertisement

The company is “not merely shying away from controversy,” Lindsay says in the letter.

“The nature of our business dictates that a vocal minority will almost inevitably oppose specific developments,” he writes. “We are prepared to face that sort of opposition.

“Frontier, however, has surfaced a broader debate over climate change and Canada’s role in addressing it. It is our hope that withdrawing from the process will allow Canadians to shift to a larger and more positive discussion about the path forward.

“Ultimately, that should take place without a looming regulatory deadline.”

Story continues below advertisement

Wilkinson’s office released a joint statement with Minister of Natural Resources Seamus O’Regan.

“Cabinet will no longer be making a decision on this project,” the statement said.

Click to play video 'Politicians point fingers after Teck pulls out of $20.6B oilsands project' Politicians point fingers after Teck pulls out of $20.6B oilsands project
Politicians point fingers after Teck pulls out of $20.6B oilsands project – Feb 24, 2020

“As Teck has rightly pointed out, and as many in the industry know, global investors and consumers are increasingly looking for the cleanest products available and sustainable resource development,” the statement said.

“We agree with Teck and leading industry groups that all orders of government need a real plan for climate action now and to reach a net zero economy by 2050.”

READ MORE: Teck project environmental deal reached between First Nation and Alberta government

The news that Teck has pulled its bid for the proposed mine comes the same day a deal had been reached between the government of Alberta and a First Nation that had raised environmental concerns about the oil sands mining project.

Story continues below advertisement

The Athabasca Chipewyan First Nation had announced the agreement in a news release earlier on Sunday, expressing “support for approval of the project” and urging the federal government to approve it without any more delay.

Richard Masson, an executive fellow with the University of Calgary School of Public Policy, called the decision stunning.

“I was shocked to see this,” he said. “Teck has put so much time and money into getting to this point and the decision was coming this week. So to get to the point where you’re actually going to find out what the decision’s going to be — whether there’s going to be any conditions attached to it — and then pull the plug is really, really stunning.”

Masson, who has worked in the energy industry for more than three decades, said Teck will now have to write down the $1.1 billion that has put into the planning.

“I would think it’s dead. It’s going to be hard to resurrect,” he said Sunday night.

“There’s a group of people in Calgary and other parts of Alberta who have been working on it for a long time who likely won’t end up with jobs anytime soon.

I don’t know what they’ll do but it’s about as bad of an outcome as I could guess.”

In a statement posted to Twitter and emailed out, Alberta Premier Jason Kenney called Teck’s decision to withdraw from the project a “grave disappointment to Albertans.” He claimed the timing was “not a coincidence.”

Story continues below advertisement

“Teck’s decision is disappointing, but in light of the events of the last few weeks it is not surprising,” Kenney said.

“It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority.”

 

Kenney’s office sent out two statements a short time apart on Sunday night.

The first statement claimed that Teck alluded to “’public safety’ concerns” in making the decision to withdraw the application. But shortly after that statement was sent out Sunday night, it disappeared from the government website and a second corrected statement had no mention of that line and acknowledged an “error” in the earlier release.

Story continues below advertisement

Kenney also spoke via phone on Sunday with Prime Minister Justin Trudeau about Teck’s decision.

Click to play video 'Complaints against Alberta government over Teck Frontier mine' Complaints against Alberta government over Teck Frontier mine
Complaints against Alberta government over Teck Frontier mine – Feb 12, 2020

“Both the Prime Minister and the Premier agreed on the importance of Canada’s natural resource sector to our economy. They discussed their commitment to developing our natural resources sustainably and creating jobs,” a call readout says.

Rachel Notley, leader of the opposition NDP and former premier, released a statement saying she was deeply disappointed about the withdrawn application and placed the blame on Premier Kenney.

“Let’s face facts — before the election, Jason Kenney began a campaign of division, designed to demonize efforts to take real action on climate change. The polarization and conflict on this issue has only been accelerated since he took on the role as Premier,” she said in a statement Sunday night.

Story continues below advertisement

“The heated rhetoric and constant conflict generated by Jason Kenney and the UCP is the primary reason for withdrawal of Teck’s application,” Notley said, adding “Teck was clear today they’re not retreating from a vocal minority, despite the Premier claiming otherwise.”

At a news conference Monday morning, Notley claimed international investors are being driven away from Alberta by a lack of a predictable natural resource framework that balances progress with sustainability — such as a carbon tax.

“Teck also made it clear they support a national price on carbon and they need a comprehensive framework within which the genuine concerns for emission levels from both the general public and international markets can be addressed.”

Notley went on to accused Kenney of reducing the Teck project “to a political football.”

“Now that project has been spiked — and the Premier himself is the one to blame.”

“My message to the premier is this: yelling at other people does not create jobs. Except maybe Tom Olsen,” she said, referring to the head of the Canadian Energy Centre government war room.

“Step up before our province gets left behind.”

Click to play video 'Rachel Notley blames Jason Kenney for Teck Frontier mine shelved: ‘Step up before our province gets left behind’' Rachel Notley blames Jason Kenney for Teck Frontier mine shelved: ‘Step up before our province gets left behind’
Rachel Notley blames Jason Kenney for Teck Frontier mine shelved: ‘Step up before our province gets left behind’ – Feb 24, 2020

Athabasca Chipewyan Chief Allan Adam has previously called out the UCP over its failure to consult and take meaningful action on environmental concerns around the Teck Frontier mine project.

Story continues below advertisement

“After many productive discussions, the Alberta government has responded to our concerns with a comprehensive and meaningful package of action items,” Adam said in the news release.

READ MORE: Rejection of Frontier oilsands mine could result in $1.13B charge, Teck Resources warns

“I am now confident that this Project is a net benefit to my community and the entire region.”

Ron Quintal, president of the Fort McKay Metis, called the political treatment of the Teck Frontier application “deplorable.”

The tiny northern Alberta Metis community of Fort McKay, on the Athabasca River just north of Fort McMurray, is home to about 750 people and sits among many oilsands sites.

“This decision is damaging to the Alberta and Canadian economies, and to the economies of Aboriginal peoples around the project area who would have seen enormous long-term, sustainable benefit.”

The oilsands are the primary employer for the northern community, although forestry, hunting and trapping are also part of the local economy.

“I fully understand Teck’s reasoning, but it is deeply regrettable. This is a black eye for Canada,” Quintal said.

“This is a blow to Canada’s global investment competitiveness and to the energy industry that is doing its best to continue to power the entire Canadian economy.”

Story continues below advertisement

Proposed north of Fort McMurray, the mine would have produced 260,000 barrels of oil a day and approximately four million tonnes of greenhouse gas emissions every year, for more than 40 years.

The company has previously said it would employ 7,000 people during construction and 2,500 during operation.

Greenpeace Canada strategist Keith Stewart spoke out in a statement following Teck’s decision to withdraw, calling the project one that didn’t make “climate sense.”

“Now that it’s off the table, hopefully we can focus on projects that will create real jobs solving the climate crisis,” he said in the statement Sunday night.

— With files from The Canadian Press