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Andrew Leach is an energy and environmental economist and associate professor at the Alberta School of Business at the University of Alberta.

Until it was suddenly withdrawn Sunday night, only days before the federal cabinet was to make a decision on whether it could go ahead, Teck Resources’ regulatory application for its Frontier oil sands mine had become a Rorschach test.

Environmental groups saw Frontier as a “carbon bomb” to be set off at a time when “any new production would result in warming well beyond 2 degrees Celsius.” For them, it was a project without economic foundation, a boondoggle in waiting and a looming environmental liability of billions of dollars.

For proponents, Frontier promised 7,000 construction jobs and billions in economic benefits, taxes and royalties. To them, concerns about economic viability were a myth – the project was a viable investment opportunity, even at current oil price forecasts. Its emissions a barrel would be lower than those of half the barrels refined in the U.S., perhaps even half the North American average or – why not – the lowest emissions ever.

So the mine had become a symbol. The facts no longer mattered.

Teck knew as much. In his letter explaining the decision, Teck chief executive officer Don Lindsay effectively said the company was no longer willing to have its project become fodder for an interjurisdictional bunfight over climate and energy policy, nor did it believe it should have to answer for matters well beyond the company’s control. “The growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” he wrote. "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.”

But here’s what Frontier really was: an improbably large bet on a bygone oil market. Its emissions would have been significant and, when combined with the local environmental effects, presented a significant barrier to its construction. But as the mine becomes, to some, a symbol of a broken regulatory process, the fallout from the application withdrawal should not distract from what has really changed in Alberta’s oil sands industry, nor should it provide comfort to those fighting for better local and national environmental policies. In winning the battle, they may still lose the war.

Frontier would have been a $20-billion investment for Teck, which is more than twice its current market capitalization. The company could not have built it without a partner, but it may not have been in a hurry to build it at all. Teck announced a $1.2-billion writedown in the future value of its 21.3-per-cent share of Suncor’s Fort Hills mine because of lower expected prices for bitumen. Frontier would have been, to a reasonable approximation, a larger version of Fort Hills, which at full operation barely generated enough cash to pay for continuing capital investment last year, while paying only $1.85 a barrel in royalties to the Alberta government. To generate a healthy return on the capital invested in Fort Hills, oil prices would need to be back in the range of US$80.

Leading industry analysts, including BMO’s Randy Ollenberger and ARC’s Peter Tertzakian, have argued that Frontier would have been substantially cheaper to build than Fort Hills, but oil prices would still need to be at least US$15 higher than they are today for the project to be remotely interesting – and even then, Frontier would need 40 years of oil prices well above today’s levels, adjusted for inflation, and would pay far fewer taxes and royalties while generating less economic value than the figures cited by proponents of the project.

Then there’s the matter of greenhouse gases. It’s true that Frontier would have been among the least emissions-intensive oil sands projects, with expected emissions intensity that would place it at roughly the median barrel in North America and about 40 per cent below the oil-sands average. But the average for projects similar to Frontier in 2018 was actually three kilograms of emissions a barrel of bitumen less than the prediction, so new ground wasn’t exactly being broken here.

Adding Frontier’s four million tonnes a year of emissions to Canada’s total would not have made it impossible to meet Canada’s 2030 or 2050 emission-reduction targets, but it would have made it more challenging. On its own, it certainly would not have changed the trajectory of global climate change one way or the other, though. But it was a potential bellwether: Economic conditions in which Frontier was viable would have seen many other oil sands projects advance as well. Recent work from the Pembina Institute held that, if all currently approved and proposed oil sands projects were to proceed, emissions from Alberta’s oil sands could double, reaching 173 million tonnes a year.

But as much of an emblem as the mine had become, laden down with the hopes and projections of myriad interests, it still failed to achieve some. I had hoped, for instance, that wrangling over Frontier would renew pressure to deal with the tailings and reclamation crisis in northern Alberta, which today already plays host to more than 1.2 trillion litres of tailings and more than 400 billion litres of process-affected water in tailings ponds. This is a looming crisis: Despite tens or even hundreds of billions of dollars of environmental liabilities, the Alberta Energy Regulator holds less than $1-billion in security deposits to ensure complete reclamation. As Alberta looks for help cleaning up its orphaned conventional oil wells, we should not ignore even larger unfunded liabilities on the landscape.

I had hoped that a conditional approval or a delay on Frontier could have forced the Alberta government to deal with these issues, so Albertans and Canadians could be confident they would not be left holding the bag.

But now, Frontier will not move ahead. And there may not be another mine project on the horizon to force the province’s hand. If that’s the case, we may yet come to rue the day Mr. Lindsay signed that letter, killing a symbol that housed so much potential, for better or worse.

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