When the Minister of the Environment, Steven Guilbeault, approved the new oil exploitation project Bay du Nord, in April 2022, the potential of the deposit was estimated at 300 million barrels. Less than a year later, the confirmation of a “significant discovery” brings this potential to almost a billion barrels. However, for the moment, there is no question of reviewing the federal environmental assessment, which will be challenged in court this week.
The Bay du Nord oil project is the result of various drillings that led to discoveries of oil under the seabed, east of the coast of Newfoundland and Labrador. When the Norwegian multinational Equinor project was approved last year, it was essentially talking about a potential of 300 million barrels exploited over a period of about 30 years.
The company subsequently indicated that the potential of the sector could exceed 500 million barrels, but without advancing further on the quantity of oil that would be exploitable. However, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-TNLOHE) recently confirmed a “significant discovery” of 385 million barrels which, combined with other discoveries in the sector, would bring the potential to 979 million barrels of oil.
This new data confirming the extent of the deposit, which is now controlled by Equinor and BP Canada, stems from data collected with the “Cappahayden K-67” well, drilled in 2020, two years before the federal green light. The Office did not wish to specify whether this “significant discovery” modified the scale of the project, simply specifying that the decision rests with Equinor. The oil company has not yet submitted an application to launch the commercial exploitation phase, we said by email.
Equinor for its part argued that the potential of 385 million barrels is included in the Bay du Nord project, while reiterating that “recoverable reserves” represent “more than 500 million barrels”. A decision concerning the exploitation phase of this oil in the marine environment must be taken “in the next few years”, for a start of production by “the end of the decade”, specified a spokesperson for Equinor, Ola Morten Aanestad, in a written response.
Federal Assessment
Even if the exploitable oil potential could triple, compared to the figures mentioned in the spring of 2022, there is no question for the moment of revising the federal environmental assessment which led to the green light given by the Minister of the Environment and of Climate Change, Steven Guilbeault.
This was not based on the quantity of oil in the deposit, recalls the Impact Assessment Agency of Canada (AEIC) by email. It was “based on project location, number of years, components and activities (including equipment, number of project vessels and drilling units, etc.)”. Equinor wants to drill up to 60 production wells over a 30-year period, while continuing exploratory drilling, in an area located 470 kilometers off the coast of Newfoundland and more than 1,000 meters deep.
The AEIC points out that “the possibility of additional wells and connections to the production facility (future development) has been taken into account”. It adds that the environmental assessment “has taken into account the potential effects of the exploitation” of other oil reserves that would be discovered later.
If the proponent makes significant changes to the description of the project included in the “environmental assessment report”, it should, however, “notify” the CNSA and specify the changes. The description in question gives indications on the schedule of realization and the zone of exploitation, but it does not specify the type of drilling platform, nor the final number of wells. We also mention the realization of seismic surveys, without confirming it.
Legal challenge
The approval of the project is also challenged in court by the Sierra Club Canada Foundation and Équiterre, an organization co-founded by Steven Guilbeault. Hearings begin Wednesday in Ottawa.
“The environmental assessment did not sufficiently take into account the greenhouse gas emissions produced downstream, which represent 90% of the emissions related to the project”, points out Marc-André Viau, director of government relations at Équiterre. . These could amount to hundreds of millions of tons.
The two organizations, which are represented by Ecojustice, also dispute “the rhetoric of industry and governments” according to which the project will ultimately be “carbon neutral”. In its decision, the Trudeau government affirmed that the Bay du Nord project will be carbon neutral by 2050. But this carbon neutrality does not take into account the use of the oil that will be exploited off the coast of Newfoundland.
In addition to the climatic impacts of exploitation, there are very real risks for marine environments, according to Sylvain Archambault, biologist at the Society for Nature and Parks of Quebec. “It’s quite worrying, because we are talking here about a very deep water exploitation project, more than 1,000 meters, which is a first in Canada. By way of comparison, the Hibernia platform exploits oil at a depth of around 90 meters. And with Bay du Nord, we should have several areas exploited and connected by submarine pipes to an operating vessel. »
Mr. Archambault adds that the possibility of a spill does exist. He recalls that fishing expertshes and Oceans Canada themselves warned against such a risk in their analysis of the proponent’s impact study. In this document, dated January 2022, the ministry refutes the claims of Equinor, which affirmed in its impact study that the risk of a spill is “extremely low”. “If 40 wells are drilled in 30 years, the probability of an extremely large spill is 16%,” write the federal experts.
The final report of the AEIC concluded for its part that “taking into account the implementation of the mitigation measures, the Agency concludes that the proposed development of Bay du Nord is not likely to cause significant negative environmental effects”.
The assessment nevertheless highlighted several environmental issues. The Equinor project is located in an “ecologically and biologically significant area of the United Nations Convention on Biological Diversity”, but also in “vulnerable marine ecosystems”.