The $20B Frontier mine shelved amid escalating rail blockades, CEO says Canada must reconcile climate and oil

Teck Resources has officially withdrawn its application to build the £20-billion Frontier oilsands mine, just days before Prime Minister Justin Trudeau was expected to issue a ruling on the contentious project. In a letter to Trudeau published late Sunday, Teck chief executive Don Lindsay said the company made the decision as protests against a separate pipeline project stretch into their second week, blocking rail lines across the country and occupying public spaces. Lindsay said the Frontier project put his company “squarely at the nexus” of much deeper-lying tensions in Canada between natural resource extraction and First Nation land claims.

“The promise of Canada’s potential will not be realized until governments can reach agreement around how climate policy considerations will be addressed in the context of future responsible energy sector development,” Lindsay said in his letter. “Without clarity on this critical question, the situation that has faced Frontier will be faced by future projects and it will be very difficult to attract future investment, either domestic or foreign.” He said Canada lacks a “framework in place that reconciles resource development and climate change,” and warned that the absence of such an understanding could bar future projects from reaching completion. The Frontier mine has gone through nearly a decade of regulatory review, and a decision by the Liberal cabinet, which was expected by end of week, would have marked the final stage in the drawn-out approval process.

Alberta Premier Jason Kenney blamed the decision on “federal inaction” under Trudeau, as protestors block rail lines and other infrastructure in opposition to the Coastal GasLink pipeline in northern B.C. The project, which is entirely separate from the proposed Frontier oilsands mine, would transport natural gas from northern Alberta and B.C. to an export facility on the West Coast. ‘Militant minority’

“The timing of the decision is not a coincidence,” Kenney said in a statement. “This was an economically viable project, as the company confirmed this week, for which the company was advocating earlier this week, so something clearly changed very recently.” “It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority,” he said.  Federal Conservative leader Andrew Scheer also tied the decision to the federal government.

“Justin Trudeau’s inaction has emboldened radical activists and public safety concerns are now shutting down nation-building energy projects,” he said on Twitter. Teck had secured community benefit agreements with all 14 of the First Nations who reside near the proposed mine, which would have been built a short distance north of Fort McMurray in northern Alberta.

Members of Beaver Hills Warriors and Extinction Rebellion Edmonton protest further expansion of the oil sands, specifically the Teck Frontier Mine, inside Canada Place, in Edmonton Wednesday Jan.

22, 2020. David Bloom

But pressure had been building on the Trudeau government to cancel the project, due to concerns that it would inhibit the federal government’s ability to meet its 2030 and 2050 climate targets. Frontier would have emitted roughly four million tonnes of greenhouse gas emissions per year, compared to the roughly 94 million tonnes currently emitted across the oilsands industry, including refineries.

Pausing the project offers immediate relief to the Trudeau government, whose caucus was deeply divided over the mine. The prime minister has long sought to balance interests in both the environmental community and industry, arguing that Canada can both grow its economy while also meeting stringent international climate targets. But those claims have been heavily challenged in recent weeks amid prolonged protests that have snarled major railway lines, and will likely dent the broader Canadian economy as the movement of goods are halted.

Several environmental advocacy groups had called on Trudeau to reject the project. Industry groups and the Conservative opposition have warned that such a move would send a bad signal to investors, who have already turned their backs on Canada amid an inability to build critical infrastructure like pipelines.

The situation that has faced Frontier will be faced by future projects

During the election campaign Trudeau pledged that Canada would reach net-zero emissions by 2050. Ottawa is separately set to fall short of its 2030 commitments to reduce greenhouse gas emissions.

“As Teck has rightly pointed out, and as many in the industry know, global investors and consumers are increasingly looking for the cleanest products available and sustainable resource development,” federal Environment Minster Jonathan Wilkinson and Natural Resources Minister Seamus O’Regan said in a joint statement. The economics of the Frontier megamine had long been in question after oil prices collapsed in 2014. Large-scale, open-pit mines like Frontier have largely been eschewed in favour of nimbler expansion projects that require much less capital costs.

Many First Nations support projects like Teck. All elected band chiefs along Coastal GasLink, for example, support the project, though a handful Wet’suwet’en hereditary chiefs are vehemently opposed. Activist groups have promised similar blockades and civil disobedience in response to construction of the £12.6-billion Trans Mountain pipeline expansion, a project now owned by Ottawa.

That development would nearly triple capacity for oil products flowing from northern Alberta to a port in Vancouver.

Teck’s decision on Sunday came just after Alberta signed updated agreements two First Nations on Frontier[1], the Athabasca Chipewyan First Nation and Mikisew Cree First Nation.

The Chipewyan had recently come out against the Alberta government’s handling of the file, and called for increased funding on several environmental efforts tied to the project.

References

  1. ^ after Alberta signed updated agreements two First Nations on Frontier (nationalpost.com)

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