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Ottawa, Nova Scotia veto $1.5-million offshore oil exploration bid by company

HALIFAX — A coalition of environmental and community groups are applauding a decision by the Nova Scotia and federal governments to deny a $1.5-million bid to relaunch oil and gas exploration in the waters off the province.

The licence application by Inceptio Limited for a shallow-water parcel on the Sable Bank of the Scotian Shelf was approved by the Canada-Nova Scotia Offshore Petroleum Board in October. However, the bid was subject to the approval of the federal and provincial ministers of natural resources, who ruled against it in a decision released late Monday.

Had it been approved, Inceptio’s bid would have renewed oil and gas exploration efforts off Nova Scotia. In 2018, production was permanently shut down at ExxonMobil’s Sable Offshore Energy Project and at Encana’s Deep Panuke project, which were the province’s only producing offshore natural gas fields.

In an interview Tuesday, Gretchen Fitzgerald, of the Sierra Club Foundation, called the ministerial veto “a really wise decision by our elected leaders."

“This is a really important moment and we think it indicates the big shift that’s going to be happening in Atlantic Canada to meet climate change head-on,” Fitzgerald said.

The Sierra Club, along with the Ecology Action Centre, the East Coast Environmental Law Association and the Offshore Alliance had warned that seismic blasting and drilling between Sable Island and the Gully Marine Protected Area could affect marine life, such as northern bottlenose whales. They also called for a consistent approach to climate change, as many jurisdictions have pledged to reduce the use of fossil fuels, such as oil and coal.

“The science is very clear that new oil and gas is not consistent with a safe climate,” Fitzgerald said.

The ministerial decision came after Federal Environment Minister Jonathan Wilkinson suspended the licence on Nov. 2 to consider more information.

In their joint statement on Monday, Wilkinson and his Nova Scotia counterpart, Tory Rushton, said that despite confidence in the offshore board’s regulatory process, they both shared a commitment to pursue economic opportunities in the clean energy sector.

“We both agree that this decision must account for broader policy considerations, including our shared commitments to advance clean energy opportunities … which are beyond the scope of the board’s regulatory purview.”

The ministers added that they are in the process of establishing a joint regulatory regime for offshore renewable energy by amending the Atlantic Accord Acts to expand the board’s mandate so it can regulate and enable the development of offshore wind.

In September 2022, the board issued a call for bids on eight offshore parcels and received just two; it approved one of them. At $1.5 million, Inceptio’s bid was small by industry standards and represented the amount of money it intended to spend during the initial six years of the nine-year exploration licence.

The board said Tuesday that the company’s bid deposit would be returned and the offshore parcel would remain Crown land. In an email, the board said it "continues to serve as the regulator for oil and gas activities in the Canada-Nova Scotia offshore area and is actively preparing for the expansion of our mandate to become the Canada-Nova Scotia Offshore Energy Regulator."

This report by The Canadian Press was first published Dec. 5, 2023.

Keith Doucette, The Canadian Press