‘Extraordinarily bad timing’
Just days after UN Secretary-General Antonio Guterres pleaded with the world to take a “quantum leap in climate action,” Newfoundland and Labrador doubled down on oil and gas exploration and revived its seismic testing program.
The province is also exploring the feasibility of marketing liquid natural gas (LNG) for the first time ever.
“It’s sort of the last attempt to determine the feasibility of LNG from a provincial perspective. … We know that we have significant offshore stock there, but it’s about figuring out the feasibility,” Energy Minister Andrew Parsons told reporters Thursday, March 23, about the provincial budget’s allotment of $4.8 million for a resource assessment.
“We have an opportunity here where we have the resource, plus would like to think as a jurisdiction we rank pretty highly when it comes to GHG (green house gas) standards and human rights standards. If we don’t fill that, let’s not think that the demand is going to go untapped. It’s going to go somewhere else.”
Asked why the province is exploring feasibility while the federal government is moving away from LNG exports, Parsons said the province takes a different outlook.
“The feds have their ideology, we have ours. Again, we don’t always diverge on that," Parsons said.
"In many cases, we’re in synch as it relates to renewables and opportunities there. We see this as an opportunity to invest — when you think about it — a pretty small amount to see if there’s a feasibility there or not."
Parsons wouldn’t specify what jurisdictions might be interested in natural gas from the province.
But at least one energy transition expert says the market won’t be there by the time Newfoundland got around to developing it — if it did.
“My question would be, LNG for who?” Angela Carter, associate professor at the University of Waterloo’s Balsillie School of International Affairs, told The Telegram Friday, March 24.
“If the LNG is for Europe, given Russia’s invasion of the Ukraine and the energy insecurity now that’s being experienced across Europe … by the time our LNG would be developed, Europe would already have moved past the need for natural gas.”
As for a $50 million investment in the Offshore Exploration Initiative — money that will help Exxon dig a new well this summer — Joel Finnis says the subsidy makes no sense.
“It’s frustrating to see the province spending on oil and gas at a time when that industry is making massive profits,” the MUN geography professor said Friday.
“I understand that the province has economic concerns, and consider the oil industry as part of a solution. But expanding oil production really doesn’t feel like a safe — let alone ethical — option at this point.”
Exxon shattered its own record in 2022, raking in $52 billion.
“They do not need Newfoundland and Labrador’s public funds to drill some wells,” said Carter.
Parsons said the exploration fund— first floated during the downturn in 2020 — represents money that comes from forfeited oil and gas bids rather than general revenues.
But Carter says all such funds should be invested into moving away from fossil fuels, not back into the industry.
“The reality is this is a sunset sector,” she said.
Speaking to reporters Thursday morning, Finance Minister Siobhan Coady said industry experts predict the world will need oil and gas for anywhere from 30 to 50 years into the future.
Carter said that’s pure fiction.
“The numbers based on the science for any hope of staying within a 1.5 degree temperature limit indicates that we need to have a 30 per cent decrease in oil and gas consumption and production by 2030 and down by 65 per cent by 2050. And this all confirmed by the best science we have, not only on climate but also by the International Energy Agency.”
Even the Canada Energy Regulator predicts a decline.
Carter notes the current market for Newfoundland oil is particularly precarious.
“Our oil is currently being exported into the United States,” she said. “Industry experts are telling me it’s mostly being used to fill up gas tanks in the United States. … The United States is on track now with the Inflation Reduction Act to move away from using fossil fuels for transportation. It’s trying to electrify transportation.”
As for climate change, she noted the cruel irony of the province forging ahead on new exploration given recent climate-related events.
“It’s devastating that the government would keep refusing to see the reality of our climate crisis when we just saw in September on the south coast a hurricane fueled by the climate crisis from these extreme storms hitting our coast and causing what mayors in those towns … are indicating was total devastation.”
Peter Jackson, Local Journalism Initiative Reporter, The Telegram