Simon Dyer is executive director of the Pembina Institute, a non-profit think tank that advocates for strong, effective policies to support Canada’s clean-energy transition.
Canada is facing a decision on the biggest oil sands mine proposal in almost a decade. Alberta’s Frontier oil sands mine, proposed by Teck Resources, has gone through a lengthy regulatory process culminating in a recommended approval from a joint federal-provincial review panel and is now under consideration by the federal cabinet. A casual observer might assume that given the potential environmental and economic effects, this process would have been comprehensive.
Yet, the panel’s report, which shares the reasoning behind the decision, is remarkably weak on its considerations of climate effects. Surprisingly, no conditions were proposed that mitigated any of the project’s climate effects. In a year in which two thirds of Canadians voted for stronger climate action, this is unacceptable.
In the 1,300-page report, only seven pages were spent discussing the climate effects from the project, and in that space, the panel dismissed much of the evidence put in front of it. Moreover, the panel remained silent on whether emissions from the mine would result in a “significant adverse effect.”
Contrary to popular belief, the bitumen that would be produced by the project – as approved by the joint review panel – would not be best in class from a climate emissions standpoint. Yet the panel accepted that, as proposed, Frontier would be, at best, an average emissions performer per barrel, compared with its oil sands neighbours. This has much to do with the lower quality of the ore that the company would extract, leaving it exposed as investors increasingly consider carbon risk. It encouraged the company to do better, but imposed no conditions to ensure this aspiration.
The panel also rejected any consideration of alternative oil price forecasts put in front of it. It instead relied on a highly optimistic forecast for global oil demand and future oil prices. This means that in order for Canadians to enjoy the stated economic benefits from the project, we are likely accepting that the world will fail to prevent the worst effects of climate change.
The panel concluded its seven-page climate discussion by recognizing that because it would create a large source of emissions, the Frontier project may make it more difficult for Canada to meet its climate targets. Whether it did make it more difficult was deemed by the panel to be outside the scope of its review.
The panel’s assessment is proof of the need for better climate assessments in project decision-making. Canada’s new Impact Assessment Act has the potential to treat greenhouse gas effects more rigorously, but it is still unclear what guidance future panels will be given to properly assess climate.
What we really need are tools, such as clear carbon budgets, to understand how individual projects fit into Canada’s long-term decarbonization pathways, and for the use of those tools to be mandatory in project decision-making.
Teck Resources’ recent announcement that it will aspire voluntarily to meet net-zero emissions by 2050 is an important acknowledgment of the significant climate effects of this project. However, much remains to be defined about how this project fits into Canada’s climate budget.
It is the federal government’s role to ensure that Canada and its major projects are prepared for the coming years of decarbonization. But until our regulatory processes connect the dots between individual projects and our country’s stated climate goals, and our provincial and federal leaders start co-operating on short-term emissions reduction targets and the federal government’s commitment to reach net-zero emissions by mid-century, projects such as Teck’s Frontier will continue to be controversial.
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