Environmental groups, First Nations continue fight against $16B oil and gas project

By Ian Burns

Law360 Canada (September 20, 2023, 1:00 PM EDT) -- The fight over a multi-billion-dollar energy project has entered a new stage as environmental groups and an organization representing several Indigenous communities have appealed a court ruling which gave the development the green light.

Bay du Nord is a $16-billion oil and gas mega project proposed off the coast of Newfoundland and Labrador, with reserves estimated between 300 million and one billion barrels of oil. It was approved by the federal Liberal government in April 2022, with Environment and Climate Change Minister Steven Guilbeault determining the project was not likely to cause significant adverse environmental effects under the Canadian Environmental Assessment Act. His decision was accompanied by the release of an environmental assessment report by the Impact Assessment Agency of Canada (IAAC), which imposed 137 conditions on the project.

The approval was challenged in court, primarily because the report failed to consider the impacts of downstream greenhouse gas emissions (GHGs) and marine shipping of oil from the project. Downstream emissions describe the carbon emitted after a product or service leaves the company’s control or ownership, including from the ultimate burning of fossil fuels for energy. It was also argued the decision was invalid as there was no proper consultation and accommodation on marine shipping with Mi’gmawe’l Tplu’taqnn Incorporated (MTI), an organization which represents eight Mi’gmaq communities in New Brunswick.

Federal Court of Canada Justice Russel Zinn ruled in June (Sierra Club Canada Foundation v. Canada (Environment and Climate Change), 2023 FC 849) that the approval was reasonable, noting Canadian regulators “have repeatedly found that downstream GHG emissions need not be considered in environmental assessments and those decisions have been upheld on appeal or review.” But now environmental law charity Ecojustice, on behalf of clients Sierra Club Canada Foundation and MTI, is taking the case to the Federal Court of Appeal.

Ian Miron, Ecojustice

Ian Miron, Ecojustice

Ecojustice managing lawyer Ian Miron said he and his clients were disappointed with the earlier decision “and we say with respect the court made a number of errors in its analysis of the issues.”

“I think a lot of this comes down to the application of the reasonableness standard under Vavilov [Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65],” he said. “I don’t want to prematurely argue the case, but we certainly think there were some errors in methodology. And it is our view that a reasonable reading of the statute requires the minister to assess these particular impacts like the downstream emissions and the shipping impact, and we will be making these arguments in court.”

Bay du Nord is a case where the government has to get it right and “we don’t think they have,” said Miron. According to Ecojustice, the approximately one billion barrels of oil Bay du Nord is expected to produce will generate about 400 million tonnes of greenhouse gas emissions — the equivalent of running 100 coal facilities for a year or adding 89 million fossil fuel cars to the road over the same time period.

“And the shipping of oil from this project to Newfoundland and Labrador was not assessed, and the potential harm an oil spill to one of these ships could cause to salmon that migrate through the area and eventually make their way to the communities represented by [MTI],” said Miron.

Equinor, the Norwegian company behind Bay du Nord, said in May it was pausing the project for three years “in the face of challenging market conditions.” Then, in August, the company announced it would spend roughly $100 million on drilling exploration which could expand Bay du Nord even further and push the project passed the one-billion-barrel mark.

Representatives for the IAAC were not immediately available for comment.

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