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The fate of the latest oil sands mining project in Alberta may be decided by the estimates of carbon emission from the province’s oil and gas industry—and Alberta and the federal government differ on how fast the oil-rich province is approaching its carbon emissions limit.
According to data from the federal Canadian government, as cited by The Globe and Mail, Alberta will reach 87 megatons of emissions this year, while its cap is 100 megatons.
The provincial government of Alberta, however, argues that the emissions in Alberta’s oil industry are 67-68 megatons, as per Alberta Premier Jason Kenney.
The federal government of Canada is set to decide by the end of this month whether to approve Teck Resources’ Frontier Project—a truck-and-shovel oil sands mine located between Fort McMurray and Fort Chipewyan in northeast Alberta.
The project, like many other energy projects in Canada in recent years, is polarizing the country. Analysts expect the federal government’s decision to seal the fate of the oil sands industry in Canada.
“With half the emissions-intensity of the average oil sands projects, Teck Frontier represents the path forward for the world's third-largest oil reserves. It's important that Canada get it right and approve this project,” Alberta Premier Kenney said last week.
If the federal government rejects the project, it would send a “devastating message” to investors, he added.
“I think that would be a devastating message to send in terms of investor confidence at a time when we are struggling to attract foreign direct investment to the Canadian economy,” Kenney said.
The Frontier project, estimated to be worth US$15.6 billion (C$20.6 billion), is an open oil sands mine that would yield 260,000 bpd at peak production, with its life estimated at 40 years. Yet it must first be approved by the Liberal government that has strict climate change fighting goals. However, according to Teck Resources’ CEO Don Lindsay, the project may not go through even if the government grants it approval. The problem, he said during an investor conference in Alberta recently, was oil prices, among other things.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.