Controversial Bay du Nord oil project awaits outcome of court challenge

Norwegian state-owned energy giant Equinor spent two days in court two weeks ago, tackling the scrutiny over the development of its controversial Bay du Nord oil project off the coast of Newfoundland and Labrador, as Ecojustice set out to overturn the government’s approval for the $12-billion project. The outcome of this challenge and its impact on the project will be known once the court’s decision is revealed.

Following delays, Equinor received approval from the Canadian government to develop the Bay du Nord project in April 2022, after the government found itself between a rock and a hard place due to energy security concerns. After the approval was granted, the country’s government claimed that Bay du Nord would be among the world’s lowest carbon projects per barrel of oil.

However, a plot twist came when environmentalist groups, outraged by the approval, vowed to work tirelessly “to ensure the project does not proceed,” which materialised in the form of more protests and a lawsuit. Once February 2023 rolled in, Offshore Energy reported that Equinor had a court fight on its hands that week with Ecojustice, which was challenging the government’s approval of the Bay du Nord project on behalf of Équiterre, Sierra Club Canada Foundation, and Mi’gmawe’l Tplu’taqnn Incorporated (MTI).

However, the court hearing was postponed, after Equinor asked for it to be adjourned. Things changed at the start of March 2023, as the court case against Equinor’s Bay du Nord oil project was heard in federal court in Ottawa while demonstrators gathered outside to call for the cancellation of Bay du Nord, marching to the nearby Norwegian Embassy in Ottawa.

In a recent update on the court hearing, Sierra Club Canada Foundation said that it was refreshing to hear the words of its lawyers, laying out why the Bay du Nord project should never have been approved, after “all the nonsense about clean oil, best in class regulations, and climate leadership spouted by the federal government.”

The organisation is adamant that there is no room for more oil in the global carbon budget, elaborating that the 16 per cent chance of a major spill from Bay du Nord places endangered whales and sensitive deep sea corals and sponges at “unacceptable risk.”

According to Sierra Club Canada Foundation, the assessment failed to address the concerns of its co-applicants, Mi’gmawei’l Tplu’taqnn, which represents eight Mi’gmaq communities in New Brunswick, about risks of tankers, encompassing oil spills, ships’ strikes with endangered whales and accidents. In addition, the organisation says that impacts on Atlantic salmon or plamu, a migratory species that swims from the Bay du Nord to rivers in the Bay of Fundy, also remain unaddressed.

On the other hand, Sierra Club Canada Foundation finds the arguments provided by the lawyers for Canada’s government and Equinor “less refreshing,” as Equinor claimed that excluding downstream emissions from burning oil was “simply” standard operating procedure. The organisation underscores that this is a position that has allowed oil companies to keep on drilling “while the climate burns,” which “must not be allowed to stand if we have a hope of stopping climate disasters from getting worse.”

Furthermore, the federal government argued they and not MTI determined the bar for consultation as “low,” thus, Sierra Club Canada Foundation points out that MTI never agreed to this designation. Additionally, the government added they were fine with the risk to ocean life from tankers and other vessels travelling to the project, which they assessed for a 30 km zone around the platforms. 

Gretchen Fitzgerald, National Programmes Director, Sierra Club Canada Foundation, remarked: “We will not let these arguments remain unchallenged… I pray the judge will decide in our favour. Either way, we are going to have to keep up the fight.”

Equinor’s plans for the development of the Bay du Nord project – located in the Flemish Pass basin, approximately 500 kilometres east of St. John’s, Newfoundland and Labrador, in the Atlantic Ocean – entail an FPSO vessel, suitable for the tie-back of adjacent discoveries and future prospects.

To this end, Salt Ship Design disclosed in September 2022 that it had designed a hull for a harsh environment FPSO, which would serve on the Bay du Nord project. Equinor is also working on early-phase concept studies for this project with the final investment decision expected in the next couple of years while the first oil could be achieved as early as late 2028. Previously, the FID was anticipated in 2021 and the first oil in 2025.

Fitzgerald points out that she is “horrified” by “gargantuan profits” that oil companies are raking in since last spring, as they continue to “do nothing” to shift away from fossil fuels “while people cannot afford basics of life and climate impacts worsen.”

The oil and gas giants appear to be doubling down on fossil fuels, as Equinor decided to buy Suncor UK, increasing its stake in more new oil in the North Sea while BP plans to explore for five times more oil than the Bay du Nord prospect this spring off Newfoundland and Labrador.

“The reason citizens and organisations are not even being consulted about BP’s plans is because of a flawed assessment for the area off the Island Newfoundland where they want to drill – an assessment we are also about to challenge in court later this month. Oil companies like Equinor have made it clear that they won’t stop until we make them stop,” concluded Fitzgerald.