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The federal government of Canada has granted its approval for a $12-billion oil project offshore Newfoundland and Labrador, to be led by Norwegian state major Equinor.
According to the Norwegian company, the Bay du Nord project consists of several discoveries made between 2013 and 2020 that have combined recoverable reserves of some 300 million barrels of oil. Revenues for the Canadian government are estimated at some $2.8 billion (C$3.5 billion), according to the company.
For Canada, however, the project is highly controversial given the Trudeau government's energy transition agenda. Media reports on the news note that an environmental assessment for the project had been conducted and had found there would be no adverse effects on the environment from developing these resources.
However, environmentalists disagree. "The decision is tantamount to denying that climate change is real and threatens our very existence," said Julia Levin, a program manager with Environmental Defence, who spoke to Reuters.
According to the national programs director of Sierra Club Canada Foundation, a blowout from the offshore project would endanger various species in the vicinity, including whales, birds, and fish.
Supporters of the project, on the other hand, note that it would have a relatively low carbon footprint and that the project will create a lot of long-term jobs.
Canada has pledged to become a net-zero emitter by 2050. As part of this plan, the federal government eyes a reduction in national emissions by 40-45 percent from 2005 levels in the next eight years. The government has already set up a $6.4-billion (C$8-billion) fund to help emitters reduce their carbon footprint.
Canada's oil industry is the biggest polluter in the country and has been under growing pressure to reduce its footprint. However, a push for more production has recently developed to take advantage of the new opportunity created by the sanction-induced lower supply of Russian oil in key markets such as Russia and the United States.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.