Controversial Bay du Nord oil project saga continues with court challenge

Following a lawsuit filed by environmentalists, Norway’s state-owned energy giant Equinor has a court fight on its hands this week regarding the development of its controversial Bay du Nord offshore oil project located in Canada, as Ecojustice works to overturn the government’s approval.

Following a period of uncertainty marked by delays, Equinor finally received approval from the Canadian government to develop the Bay du Nord project in April 2022. This came after the Canadian government found itself between a rock and a hard place due to energy security concerns while it was contemplating whether to greenlight the development of this project.

When the approval was granted, the government claimed that Bay du Nord would be among the world’s lowest carbon projects per barrel of oil. The plot thickened further 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.

The Norwegian giant was also working on a drilling campaign to boost the resources for the project. As reported in September 2022, operational challenges forced it to restart the second well in the campaign. As a result, drilling operations were expected to take longer than previously anticipated. BP was expected to join Equinor as a partner in the Bay du Nord project by the end of 2022.

In a recent update, Ecojustice revealed that it would be in court during the week, challenging the controversial $12-billion Bay du Nord oil and gas project off the coast of Newfoundland and Labrador, which was approved last year, “much to our disappointment.” The group justified its disapproval of the project by saying that just days before the government gave its blessing for the project, the United Nations chief had called funding new fossil fuel projects “moral and economic madness.”

Ecojustice further underscored that even though the UN was “not in the business of melodrama,” Steven Guilbeault, Minister of Environment and Climate Change, gave Bay du Nord the green light on numerous conditions, including that the project would be net-zero by 2050. 

The environmentalists say this sounds impressive until you realise that “not one of those conditions considers downstream emissions.” The activists also claim that drilling only accounts for 10 per cent of an oil project’s emissions while the other 90 per cent comes from burning the oil.

Moreover, Ecojustice underscores that “a billion barrels of oil extracted and burned is still a billion barrels’ worth of carbon, no matter where the emissions happen. So how can Minister Guilbeault approve Bay du Nord without considering downstream emissions — the greenhouse gases generated by refining, transporting, and burning the oil for energy?”

According to Ecojustice, it will be in Federal Court this week – on behalf of Équiterre, Sierra Club Canada Foundation, and Mi’gmawe’l Tplu’taqnn Incorporated (MTI) – to fight the approval, explaining that it is challenging the project on the grounds that “it didn’t properly consult with affected First Nations communities; threatens local ecosystems; and fails to account for downstream emissions. It’ll be a couple of big days in court and we’re expecting a full house.”

Offshore Energy has reached out to Equinor, seeking comment on the latest developments regarding the lawsuit, thus, the article will be updated if a response is received.

In the meantime, Equinor’s plans for the development of the Bay du Nord project located in the Flemish Pass, 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 will serve on the Bay du Nord project in the Flemish Pass basin. If developed, the Bay du Nord project would operate for 30 years.

The Norwegian player is 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.

Meanwhile, Equinor is working to develop its Rosebank project located West of Shetland with the FID planned in 3Q 2023. This project is also facing opposition from environmentalists.

If sanctioned, the Rosebank project is expected to create £8.1 billion of direct investment – including the development, operation and decommissioning of the field – based on Equinor’s projections.

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