19 hours ago
- Business
- National Observer
Newfoundland and Labrador's big offshore gas bet clashes with climate reality
Offshore natural gas is Newfoundland and Labrador's latest pitch for development that it claims will be 'part of the solution to the global path toward-net zero emissions' despite ample evidence that fossil fuels like oil and gas must be phased out to reach climate targets.
Last week, the province announced findings from its natural gas resource assessment, which looked at the recoverable volume of natural gas from previously discovered deposits in the Jeanne d'Arc Basin, about 340 kilometres off the coast. The assessment concluded the natural gas resource base ranges from 8.1 to 11.3 trillion cubic feet, and that other adjacent deposits were also discovered. As a comparison, Nova Scotia's Sable Offshore Energy Project recovered two trillion cubic feet of natural gas during its 20-year lifespan, the N.L. government noted.
Following the assessment, Minister of Industry, Energy and Technology Steve Crocker said that natural gas is considered a transition fuel and that the discovery could help extend the life of oil projects in the area by justifying the business case.
'In the future, natural gas production may play a crucial role in ensuring that the oil and gas sector continues to support the province's economy and revenue streams,' he said.
The oil and gas industry applauded the assessment, calling it a positive step forward for the sector. Energy NL CEO Charlene Johnson said there is already expertise in offshore oil, which could be applied to the development of the gas industry as well.
The rhetoric fits into a broader push by the province to significantly expand offshore fossil fuel production. The province is committed to doubling offshore oil production by the end of the decade to even out its struggling balance sheet, which experts say would be a significant blow to Canada's emission reduction targets. The province touts its offshore oil as low-carbon, because extracting oil off the shore of N.L. emits fewer greenhouse gases compared to Alberta's oil sands (which generate 2.2 times as many emissions per barrel than the average crude extracted in North America). However, the claim refers only to emissions during the production phase and ignores those generated when oil and gas is burned, which is the primary source of climate change.
And while Crocker and others dub natural gas a 'transition fuel' from fossil fuels to renewables, it is made mostly of methane, which is responsible for approximately a quarter of global warming and is over 80 times more powerful than carbon dioxide (CO2) for the first 20 years in the atmosphere. Natural gas production is a huge source of methane leaks in Canada and the gas also produces CO2 when burned.
Offshore natural gas is NL's latest pitch for development that it claims will be 'part of the solution to the global path toward-net zero emissions' despite ample evidence that fossil fuels like oil and gas must be phased out.
'The problem is that when people say we are going to start developing low-carbon fuels, they have no mechanism or control to do that in place of the high-carbon fuels,' explained Memorial University Geography professor, Joel Finnis, referencing the prospect of offshore natural gas.
'In Canada, Saskatchewan plans to ramp up production. Alberta plans to ramp up production. Nobody's talking about ramping down production … that's always left to somebody else.'
N.L.'s insistence on developing offshore natural gas — which would take years to reach production — ignores the fact that the world needs to reduce the production of fossil fuels, said Finnis.
According to the International Energy Agency, worldwide oil and gas demand is set to peak by 2030, and no new fossil fuel projects are needed for the transition to net-zero greenhouse gas emissions by 2050.
'I suppose you could make a case for closing some fields and opening others, but there is not any system of cooperation in place that would allow that to happen,' said Finnis, explaining that offshore oil and gas isn't replacing onshore fossil fuels, it's just adding to them.
'...there's no instance where I can imagine that Alberta is going to say, 'Oh, great, you take over this production. We'll shut down this' — right?'
Meanwhile, a 2020 International Institute for Sustainable Development analysis also found that after 2030, global demand for oil will start to sharply decline, and stresses that Canada needs a plan to avoid these big upfront investments becoming stranded assets.
Meanwhile, there are signals from the offshore industry itself that these types of projects might not be worth pursuing, said Jim Dinn, the leader of the provincial NDP. One example is the Bay du Nord project, which was approved by the federal government in 2022 but is currently on hold due to cost increases and is still waiting to be sanctioned. He notes that any fossil fuel — including offshore natural gas or oil — produces harmful greenhouse gases when burned.
Dinn says the province should be focusing on a just transition away from fossil fuels, but notes that it's been resistant to that framing in the past. In 2022, Dinn put forward a private members resolution asking the province to adopt just transition planning, which was defeated.
'How do we protect our own economy, our workers, the environment?' he said, noting that workers should be supported to transition to working in renewables. 'We've already got a planet that's warming.'
