The Independent is 100% funded by its readers. Your pay-what-you-can subscription or one-time donation provides a base of revenue to keep our bills paid and our contributors writing. For as little as $5 a month, you can fund the future of journalism in Newfoundland and Labrador.
There has been a lot of discussion about the proposed Bay du Nord oil project, which could see the extraction of 1 billion barrels of oil. As part of that discussion there a lot of myths are being actively spread about the state of the global energy economy and impact of proposed oil projects, like Bay du Nord, on global security and climate change.
The simple reality is projects like Bay du Nord don’t have a positive future—if they are to have a future at all—in a world that is now accelerating away from fossil fuels.
Below are some of the most common myths being spread about Bay du Nord, and a detailed analysis of why these myths are myths.
MYTH: Bay du Nord will help with the situation in Ukraine and Global Security
FACT: Bay du Nord might optimistically start production in 2025, which experts point out does not help the current situation, and makes the project itself economically risky. It would have no impact on current global security and the oil it produces (if used) would make global security less stable, not more. More likely than not however, Bay du Nord simply won’t be economically viable as a project by the time it comes online.
The situation in Europe is such that many countries are now planning to accelerate their transition to fully renewable economies. European leaders are not talking about shifting their dependence on oil and gas to Canada, they are talking about ending that dependence altogether. Germany hopes to rely on 100% renewable energy by 2035 and the share of that being generated by wind or solar power could reach 80% by 2030. Proposals to phase out fossil fuel cars have been proposed for as early as 2030 across Europe, with several countries including the UK having already planned bans on the sales of new cars for around that time. And again, those plans are more likely to accelerate given the situation.
Our use of fossil fuels is also causing climate change and its implications for global insecurity to get worse. Almost half of the world’s population is already vulnerable to increasingly dangerous climate impacts and climate change is also a conflict driver, meaning that it will serve to increase and worsen future conflicts.
Svitlana Krakovska, Ukraine’s delegate to the IPCC, has publicly blamed world dependence on oil for helping to drive Russian aggression and for making climate change worse which could lead to future crises. To quote Krakovska:
“Human induced climate change and the war on Ukraine have the same roots, fossil fuels, and our dependence on them….We will not surrender in Ukraine… And we hope the world will not surrender in building a climate-resilient future.”
In terms of global energy poverty, projects like Bay du Nord are not the answer either and renewables offer much better solutions. Continuing fossil fuel dependence is not the answer for alleviating global energy poverty, and also contributes to ambient air pollution which causes millions of premature deaths every year (most of which occur in low- and middle-income countries).
MYTH: Bay du Nord is vital to NL’s economy
FACT: Though a significant portion of NL’s current GDP comes from oil and gas, the province—and Canada as a whole—also provides the oil industry with enormous subsidies, especially given the money the industry costs us all in terms of healthcare, climate costs, and pollution. The oil industry does not have a viable economic future and long term projects, like Bay du Nord, represent a bad investment for the economy in a world shifting away from fossil fuels.
Bay du Nord could very well come online just as demand for oil peaks and, as we discussed above, that peak could now be coming sooner rather than later. Indeed, there are a lot of factors that could see a transition to renewables take place ahead of current timeframes. Renewable energy is often now the cheapest option for energy generation even without subsidies and, as we discussed above, many countries are looking to move away from fossil fuel based vehicles in the near future.
The NL government is considering sinking public money into Bay du Nord, despite internal economic advice to the contrary. According to a report released by the IISD in March 2022, the NL government already subsidized oil and gas with CAD 82.6 million in FY 2020/2021 and CAD 94.7 million FY 2021/22. This is in addition to federal government subsidies allocated to the industry.
This comes even while the International Energy Agency has also directly said the development of new oil and gas reserves should not take place. If NL directly invests in Bay du Nord it could very well result in public funds being lost to an economically doomed project.
Dependency on oil is not a stable basis for the NL economy and is prone to the impacts of outside crises. Oil projects in NL have received millions in financial assistance—even when they have not produced oil in several years. Money is increasingly invested into the oil industry by the province, and by Canada as a whole, before projects’ long term viability is actually proven.
While there has been a perfectly understandable emphasis to try and support workers in the industry through a time of economic uncertainty, there are better ways to invest further funds that would provide better opportunities for workers and spin off benefits for the economy. Investments in green industries yield much higher numbers of jobs for the amount invested.
Nationally, Canada subsidizes the oil and gas industry to the tune of billions a year, and when you factor in externalities (like health and pollution impacts caused by the industry, that we ultimately have to pay for) that number skyrockets to $60 billion. The cost of supporting the fossil fuel industry is also going up as climate impacts and their associated costs, such as fires, increase across the country.
This is money that could be going towards a green transition or paying for other services like healthcare. Imagine the impact of those fossil fuel subsidies instead going to build a green economy and help workers transition to that economy in fossil fuel dependent provinces like NL, Saskatchewan, and Alberta. Canada will need to invest less per year to build the projects needed to provide everybody with clean non-polluting energy by 2050 than projections of money being invested in the oil and gas sector in 2022 (Jacobson et. al. Stanford University, CAPP).
And we’re not even talking about the particular risks Bay du Nord would have for other industries in NL, like fisheries, if there was a major spill or blowout (we chat about those below) and the costs that could mean for the province.
Current soaring oil prices are likely to provide a short term boost to oil investors, but are also likely to push the world off of oil and gas even faster than before. This makes long term projects like Bay du Nord particularly bad investments. The cost of pumping offshore oil remains higher than in other regions, making NL offshore oil even less desirable to investors as global demand shrinks.
There is absolutely no reason to believe that a new oil field, one that poses even greater technical, safety, and environmental challenges than existing fields and which would be developed during a global transition off of fossil fuels, would help NL’s economic situation.
MYTH: Bay du Nord would not contribute much to emissions
FACT: This is a classic misdirection from oil lobbyists who try to claim there is such a thing as green oil because the extraction and refinement of certain reserves itself creates less emissions. But even by those standards, NL’s oil and gas industry is not actually producing green oil at all.
The problem with the entire concept of green oil is that it fails to account for the emissions of the oil downstream from transporting, refining, and then burning that oil. Bay du Nord could see up to 1 billion barrels of oil extracted. To put that into perspective, the estimated 73 million barrels per year produced by the project would be equivalent to adding more than seven million gas cars to the road.
Bay du Nord would involve the development of reserves of fossil fuels that we know we cannot develop if we are to meet global climate targets. It would be another testimony to our country’s failure to address climate change. Canada is not a climate leader in terms of emissions, in fact we were the only G7 country to actually increase emissions since the Paris agreement and the main reason is our fossil fuel industry.
NL already has a steep hill to climb if the province is to meet its target of reducing emissions 30% in the next 8 years: from 11 MT to 7.6 MT. Bay du Nord would increase provincial emissions substantially and make these reductions unattainable. And there are no concrete plans to reduce these emissions, in spite of industry promises to do so.
P.S. If you’ve been told any one of the various climate myths about emissions not being tied to global warming, or myths about global warming not being caused by human GHG emissions, here is another resource where you can find out more information about why those myths are myths.
MYTH: Bay du Nord would be an environmentally safe project
FACT: Bay du Nord would drill at depths far below current production drilling off the coast of NL, and would represent the deepest production wells drilled in Canada located 500 kilometers from St. John’s. By Equinor’s own estimates a blowout could take well over 18-36 days to cap.
Further, DFO scientists found that Equinor’s submission on the project to the environmental assessment for the project contained ‘bias’ and ‘inappropriate conclusions’—and these issues have not been addressed even though the assessment process is complete. These inaccuracies include failure to accurately assess the risk of accidents and spills, failing to incorporate the 2018 spill of an estimated 250,000L by Husky Energy in the risk assessment, failure to address impacts on deep sea coral and sponges, and not accurately addressing risk of ship strikes to whales. Projections of oil produced from Bay du Nord has more than tripled since the assessment was complete, so many of the impacts assessed, including GHG emissions, risks of spills, and risks to ocean life would be expected to be even higher than described.
After a deeply flawed environmental assessment process the project cannot be proven to be environmentally safe for surrounding ecosystems or the existing industries that depend on them like fisheries.
Long story short, even in terms of immediate environmental impacts this is a dangerous and poorly thought out project that could negatively impact ecosystems and the existing industries in NL, like fisheries, that depend upon them.
Don’t let the myths keep spreading
The fossil fuel lobby would love it if people would just let the subsidies keep rolling into the industry, even if that means we effectively subsidize projects that don’t have a future. Please take a moment to share this article with your friends and family or with the people you think need to know more about these issues.
Because at the end of day it’s misinformation that’s driving climate change as much as fossil fuels.
Did you enjoy this article? Fund more like it, and support the future of journalism in Newfoundland and Labrador.