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Carney Administration Considering Increase in Offshore Oil Production

Ottawa backs new 85,000 square kilometer oil and gas exploration licenses in Newfoundland and Labrador.

Ottawa endorses the choice to issue 85,000 square kilometers of fresh exploration licenses off the...
Ottawa endorses the choice to issue 85,000 square kilometers of fresh exploration licenses off the coast of Newfoundland and Labrador.

Carney Administration Considering Increase in Offshore Oil Production

Government Greenlights Offshore Oil Exploration Expansion Along Newfoundland and Labrador Coasts

The Carney administration has decided to auction 85,000 kilometers of offshore petroleum exploration permits along the coasts of Newfoundland and Labrador, a move that some critics argue is inconsistent with combating climate change. The permits offered, administered by the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), overlap with a significant marine biodiversity protection zone.

The upcoming auction comprises 36 exploration permits, divided between two sectors. The first block, located east of Newfoundland Island, consists of 19 permits spanning 47,000 square kilometers. This area is considered a "high activity" sector with several petroleum research projects, active exploration permits, and permits related to "significant discoveries." It is situated northeast of producing fields.

A second block of 17 permits, totaling 38,000 square kilometers, is located farther north, in an area east of Labrador's territory, in a "low activity" sector with no active exploration permits. Companies have until November 5 to bid for exploration permits, with the C-NLOPB stipulating that the sole criterion will be the amount the bidding company commits to invest in exploration work over the next six years. The minimum amount of money is $10 million per zone offered for auction.

Part of the zones offered for auction overlap with the North East Newfoundland Slope Closure, a large marine refuge established for environmental protection objectives. However, the C-NLOPB maintains its support for the government's climate change and marine environment initiatives.

The debate continues on the compatibility of oil exploitation with fighting climate change. Johnson Dabrusin, the Minister of Environment and Climate Change, has yet to respond to our inquiry on the matter. The federal government argues that it recognizes the significance of the oil and gas industry to Newfoundland and Labrador's economy and its commitment to protecting the environment, combating climate change, and responsibly developing resources.

Despite the government and provincial support for oil exploration expansion, not all parties are in agreement. While Energy NL, representing companies active in the offshore energy sector, advocates for fostering industry growth, the Sierra Club Canada calls for banning new exploration permits. They argue that oil demand should peak and decline by the end of the decade and that provinces should instead focus on developing renewable energy sources for economic stimulation.

The Bay du Nord project, the only new exploitation project approved by the federal government, was put on hold in 2023 by Equinor. Although the company is working to optimize the project, the final exploitation decision remains undecided.

The environmental risks associated with offshore petroleum exploration include substantial greenhouse gas emissions, oil leaks, and methane emissions, all of which exacerbate climate change and harm marine ecosystems. Expanding exploration also complicates marine biodiversity protection efforts due to legal challenges and weakening safety regulations. These issues highlight the need for stricter regulations, monitoring, and a phase-out of fossil fuels to combat climate change and preserve marine biodiversity.

  1. Critics argue that the Carney administration's decision to auction offshore oil exploration permits, particularly in regions overlying marine biodiversity protection zones, is inconsistent with efforts to combat climate change.
  2. The upcoming auction, administered by the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), includes exploration permits in a high-activity sector that already hosts numerous petroleum research projects, active exploration permits, and significant discoveries.
  3. The C-NLOPB's decision to auction permits overlapping with the North East Newfoundland Slope Closure, a marine refuge established for environmental protection objectives, has raised concerns from environmental groups like the Sierra Club Canada, who advocate for banning new exploration permits.
  4. The debate persists regarding the compatibility of oil exploitation and fighting climate change, with Minister of Environment and Climate Change, Johnson Dabrusin, yet to respond to inquiries on the matter.
  5. The environmental risks associated with offshore petroleum exploration, such as greenhouse gas emissions, oil leaks, and methane emissions, not only exacerbate climate change but also harm marine ecosystems, highlighting the need for stricter regulations, monitoring, and a phase-out of fossil fuels to combat climate change and preserve marine biodiversity.

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