More court action brews on the horizon for giant Bay du Nord oil project

While the development of Canada’s controversial Bay du Nord offshore oil project has been put on a shelf for the time being, the legal challenges over the project’s approval do not seem to be over, as the appeal process regarding a lawsuit – filed by environmentalists – which was thrown out of court recently, is now waiting in the wings.

Back in May 2022, Canadian environmental groups decided to launch a lawsuit to overturn the federal government’s approval of Bay du Nord. To this end, Ecojustice, on behalf of Équiterre and Sierra Club Canada Foundation, filed the lawsuit in the Federal Court. At the time, the project’s approval was seen as a clash with Canada’s international obligations and the call to reduce global emissions as the climate emergency takes its toll, becoming more distressing with every severe weather event.

When March 2023 rolled in, Equinor spent two days in a court in Ottawa due to Ecojustice 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). The outcome of the challenge and its impact on the project, which the Canadian government expected to be among the world’s lowest carbon projects per barrel of oil, depended on the court’s decision.

This decision came in June 2023, when the court opted to dismiss the case challenging the Minister of Environment and Climate Change’s decision to approve the development of the $12-billion Bay du Nord oil project located off the coast of Newfoundland and Labrador. As a result, the environmental and Indigenous groups, which brought the case to court, were disappointed with the decision and were in the process of exploring options to appeal it. 

As Equinor recently put the Bay du Nord project on a shelf for three years due to – what it considers to be – “challenging market conditions,” due to the rise in costs, the project is not likely to be developed any time soon. This does not seem to be enough to bring legal battles over the project’s approval to an end, as the undertaking of the appeal process over the court’s dismissal of the lawsuit has now been confirmed.

Marie-Eve Leclerc, Équiterre’s Mobilisation manager, underscored: “We’re stunned to see just how out of step this court decision is with our climate reality. When Canada is warming twice as fast as the rest of the planet,  it makes no sense to keep authorising fossil fuel projects. Our forests are ravaged by fire, smog and smoke are causing public health problems, and heat domes and torrential rains are causing damage and death all over the planet.”

However, Équiterre is now out, as Leclerc and Marc-André Viau, Équiterre’s Director Government Relations, explain that the decision has been made, after careful consideration, not to follow the appeal process for the lawsuit against the approval of the Bay du Nord project, which Ecojustice, Sierra Club Canada Foundation and Mi’gmawe’l Tplu’taqnn Incorporated have decided to undertake.

Équiterre elaborates that its decision to step away from the appeal process was made due to Equinor’s suspension of the project for three years, which is a scenario that reminds it of – what it deems to be – the victorious conclusion of its battles against Energy East in 2017 and LNG Quebec in 2021 since these projects never saw the light of day following their initial postponement.

Leclerc and Viau are confident that this setback on Equinor’s part signals the definitive abandonment of the Bay du Nord project. The pressure on Canada to double down on climate action is mounting and the government is taking steps in this direction.

“If there’s one thing we’re convinced of, it’s that Canada can no longer afford to authorise new fossil fuel projects. While this announcement gives us a glimmer of hope, you can count on us to keep a close eye on Equinor’s activities and continue the work we’ve been doing for over two years as part of an international NGO coalition that includes Norway, Argentina, England, Australia and Brazil. We will make sure that Bay du Nord never sees the light of day in Canada,” underlined Équiterre.

The Bay du Nord project is located in the Flemish Pass basin, some 500 km northeast of St. John’s in Newfoundland and Labrador, Canada, where several discoveries have been made. The first discovery was made by Equinor in 2013, followed by additional discoveries in 2014, 2016, and 2020. The confirmed discoveries in 2020 in adjacent exploration license EL1156 – Cappahayden and Cambriol – are potential tie-ins in a joint project development.

The company’s plans for the development of the Bay du Nord project entail an FPSO vessel, suitable for the tie-back of adjacent discoveries and future prospects. In line with this, Salt Ship Design disclosed in September 2022 that it had designed a hull for a harsh environment FPSO for this project.

This is not the only project facing opposition from environmentalists, as Equinor’s other projects have found themselves in climate activists’ crosshairs. One of these projects is Rosebank, which Equinor is working to develop West of Shetland. The FID is slated for 3Q 2023.

However, uncertainty looms over Rosebank’s approval as it is stuck between the devil and the deep blue sea, thanks to the mounting pressure from environmentalists to put a lid on it due to climate change concerns. Recent reports indicate that the decision whether to greenlight this project, which is perceived to be one of the largest undeveloped oil fields in the UK, is unlikely to come before August.

Located about 130 kilometres off the coast of the Shetland Islands in the UK, the Rosebank oil and gas field is estimated to contain 300 million bbl of potentially recoverable reserves.