This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Post

Teck Gives Up on Frontier Tar Sands/Oil Sands Mine

Twitter

In a bombshell announcement yesterday evening, Vancouver-based Teck Resources has withdrawn the application for its C$20.6-billion Frontier tar sands/oil sands mine in northern Alberta, less than a week before the federal cabinet was due to accept or reject the contentious and carbon-intensive project.

“Global capital markets are changing rapidly, and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products,” Teck CEO and President Don Lindsay wrote in a letter to Environment and Climate Change Minister Jonathan Wilkinson.

 “This does not yet exist here today and, unfortunately, the growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” he added. “In that context, it is now evident that there is no constructive path forward for the project.”

Lindsay conceded that “questions about the societal implications of energy development, climate change, and Indigenous rights are critically important ones for Canada, its provinces and Indigenous governments to work through.” But “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,” he wrote.

“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 he was “disappointed to have arrived at this point,” claiming the project was “socially and environmentally responsible” and had achieved “unprecedented support from Indigenous communities”.

News reports had Teck contacting Indigenous communities in the area of the proposed mine with advance notice of the announcement.

In a statement of their own, Wilkinson and Natural Resources Minister Seamus O’Regan confirmed there will be no cabinet decision on the project. “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,” they said.

“We agree with Teck and leading industry groups that all orders of government need a real plan for climate action now, and to reach a net-zero economy by 2050,” they added. “We also recognize Teck’s leading class consultation work on this project, including their efforts to engage with local Indigenous communities throughout the project development and review process. Teck’s consultation model is a positive example for future  proponents.”

Greenpeace Canada Senior Energy Strategist Keith Stewart told CBC the decision came as a surprise, but Teck had made the right call.

“This project never made economic sense; it didn’t make climate sense; it wasn’t really going to happen,” he said. “So I’m glad that we can now actually focus on real projects that will create good jobs in Alberta, across the country, fighting climate change.”

Alberta Premier Jason Kenney called the announcement a grave disappointment for his province but no surprise.

“It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority,” he said, referring to mounting, Canada-wide protests against the Coastal GasLink pipeline.

“The factors that led to the today’s decision further weaken national unity,” he added. “We did our part, but the federal government’s inability to convey a clear or unified position let us, and Teck, down.”

“Political unrest has killed 7,000 jobs,” agreed federal Conservative leader Andrew Scheer. “Justin Trudeau’s inaction has emboldened radical activists and public safety concerns are now shutting down nation-building energy projects.”

(None of the predictable pushback made any reference to the horrid quarterly financial results Teck reported last week, nor to Lindsay’s statement late last month that the project might never be built, even if cabinet approved it.)

Prime Minister Justin Trudeau’s office told the Globe and Mail the PM had discussed the Teck decision with Kenney. “Both the Prime Minister and the Premier agreed on the importance of Canada’s natural resource sector to our economy. They discussed their commitment to developing our natural resources sustainably and creating jobs,” the PMO said in a statement.

Industry analyst Richard Masson, executive fellow at the University of Calgary’s fossil-affiliated School of Public Policy told the Globe the reaction from investors is “going to be very negative, I don’t think you can interpret any other way.” He added that the recent decisions by Teck and Houston-based Kinder Morgan to walk away from fossil megaprojects in Canada “are recent examples that should really give us all pause as Canadians about what we’re doing for our investment climate.”

Read More

The Energy  Mix's picture

Thank The Energy for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Discussions

Matt Chester's picture
Matt Chester on Feb 24, 2020 10:52 pm GMT

“Political unrest has killed 7,000 jobs,” agreed federal Conservative leader Andrew Scheer. “Justin Trudeau’s inaction has emboldened radical activists and public safety concerns are now shutting down nation-building energy projects.”

I feel for anyone whose job is eliminated as a result of shifting away from fossil fuels, and we need to have a safety net for those affected communities, but is the presence of jobs it can create alone reason to move forward with environmentally harmful projects? Artificially keeping jobs alive is a half step, retraining and creating new clean energy jobs is the full step that should instead be focused on

The Energy  Mix's picture
The Energy Mix on Feb 25, 2020 2:04 pm GMT

Matt, that question/comment goes to the heart of the very intense debate we've been having about the transition off fossil fuels in Canada. Our fossil-producing regions are hurting terribly, and the most realistic way to frame the situation is that Alberta and Saskatchewan will continue to be hurt first and worst until their politicians stand up to the fossil lobby and start building the future, rather than trying to rebuild the past.

But that's not what it looks or feels like to a great many people on the ground. After getting used to the inflated wages of a fossil boom, and building household budgets around those incomes as any of us probably would in the same circumstances, much of the fear for people in fossil jobs is that a just transition means shifting to a role where you utter the phrase "Would you like fries with that?" 200 times a day. The transition is so much more than that -- but it's hard (and unfair) to blame people for demanding proof when their livelihoods are on the line.

In the lead-up to Teck's announcement Sunday, there was talk that our next federal budget would come up with funds to deploy the skills in the fossil industry to begin tackling an orphaned well cleanup that will take 2,800 years to solve based on present trends, as assessed by a provincial regulator. That would bring jobs to Alberta and other provinces, begin tackling a wicked environmental problem, and I hope, begin to detoxify the public debate over the transition. So we'll see what Ottawa announces next month...

Matt Chester's picture
Matt Chester on Feb 25, 2020 5:13 pm GMT

Thanks for the reply-- definitely good proof about how even the best of intentions doesn't always mean the path forward is an easy or obvious one. 

But I really like how you put this: 

until their politicians stand up to the fossil lobby and start building the future, rather than trying to rebuild the past

Hopefully other regions who could fall into similar predicaments will listen to these lessons

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »