Federal Environment Minister Steven Guilbeault made the announcement Wednesday following a four-year assessment conducted by the Impact Assessment Agency of Canada.
The Agency’s Environmental Assessment Report determined the project is “not likely to cause significant adverse environmental effects when mitigation measures are taken into account,” a statement for IAAC said.
“The federal government concurs with the recommendation of the Impact Assessment Agency of Canada. As a result, the Bay du Nord Development Project may proceed, subject to some of the strongest environmental conditions ever, including the historic requirement for an oil and gas project to reach net-zero emissions by 2050,” Guilbeault said in a press release.
The Bay du Nord project consists of several oil discoveries in the Flemish pass basin, some 500 kilometres northeast of St. John’s in Newfoundland and Labrador, according to Norway’s Equinor, which operates the project.
The company says Bay du Nord will be worth about $3.5 billion to the Newfoundland and Labrador government, with oil production beginning in the latter part of the decade.
Bay du Nord would be Canada’s first remote deepwater project to produce oil, with wells in about 1,200 metres of water pumping around 188,000 barrels of oil a day.
Equinor’s Bay du Nord project is expected to produce around 300 million barrels of oil over its lifetime.
Under the agreement with the federal government, Equinor is legally required to reduce greenhouse gas emissions (GHGs) and measures to protect fish and fish habitat, migratory birds, species at risk, air quality, human health and Indigenous peoples’ use of resources. In total, there are 137 legally-binding conditions set by the government.
The Bay du Project project will produce five times less emissions than the average Canadian oil and gas project and 10 times less than the average project in the oil sands, IAAC said.
Equinor spokesman Alex Collins said the Bay du Nord project “has the potential to produce the lowest-carbon oil in the country.”
“Equinor is pleased with the strong support that the Bay du Nord project has received from stakeholders across the province and Canada,” she said.
However, the announcement was met with skepticism from climate activists in the country, who criticized the move.
Caroline Brouillette, national policy manager at Climate Action Network Canada, said the government’s approval of a new fossil infrastructure for the first time since 2019 “is nothing less than heartbreaking”.
“Prime Minister Justin Trudeau is doubling down on the myth that Canada can be a climate leader while continuing to produce and export vast amounts of climate-destroying fossil fuels,” she told Global News in an email.
“The longer he postpones being honest with Canadians about the incompatibility of increased oil production and a climate-and jobs- safe future, the rougher the awakening will be.
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“Today’s decision is a failure of courage.”
According to the latest report by the Intergovernmental Panel on Climate Change (IPCC) released on Monday, without immediate and deep emissions reductions across all sectors, limiting global warming to 1.5°C (34.7F) is “beyond reach.”
Canada has committed to reach net-zero carbon emissions by 2050.
Montreal-based environmental group, Équiterre, an organization co-founded by Guilbeault, “strongly denounced” the federal government’s decision.
“So called ‘green’ or ‘clean’ oil is a figment of the imagination: it simply does not exist. Oil is oil: it will have impacts however way it is produced and wherever it is burned,” said Émile Boisseau-Bouvier, Équiterre’s Climate Policy Analyst, in a statement.
— with files from The Canadian Press and Reuters