The Teck Frontier mine

2019-12-11

in Canada, Economics, Politics, The environment

Not only is the Trudeau government calling into question its seriousness about decarbonization by allowing the Trans Mountain pipeline expansion, they are considering allowing Teck to build another open-pit bitumen sands mine which will produce 6 million tonnes of CO2 per year in its operations and far more when the fuel it produces is burned.

Every Canadian government must live in fear of being the ones in power when the markets and Canadians finally realize that developing the bitumen sands has been a mistake and the industry has no future. Since every government wants to avoid the blame when that happens, they each do what they can to maintain the illusion of a future for the industry which will justify the tens of billions that have been invested. In so doing, they inadvertently tell Canadians and the world that they are willing to create a permanently destabilized global climate in exchange for as many more years of oil profits as they can get away with.

{ 36 comments… read them below or add one }

. December 19, 2019 at 4:24 pm

Minister ‘wrestling’ with how Frontier oilsands mine would fit into climate commitments

Teck’s proposed $20B mine would produce 260,000 barrels of oil per day

. December 29, 2019 at 2:29 pm

Federal and provincial environmental regulators are both recommending approval of a massive new oilsands mine, but whether the environment minister in Ottawa agrees is up in the air.

Teck’s Frontier project is estimated to cost $20.6 billion, significantly more than any other facility in the region. It would also be the northernmost oilsands operation and cover a territory about half the size of Montreal.

Even if it receives the green light, it may not get built. Investors aren’t keen these days to sink big money into an oilsands project that will take many years to produce a return.

In addition, oil prices will need to rise to between $70 and $80 US per barrel before large oilsands mines can be economically viable, said Mark Oberstoetter, a Calgary-based oil and gas analyst at Wood Mackenzie.

Some industry insiders believe that Teck may look to sell the project to an existing oilsands player in the area, if it receives federal approval.

. January 28, 2020 at 10:58 am

Kenney calls for swift approval from Trudeau for Teck oilsands mine

Alberta’s premier says if the mine doesn’t move forward, it means Ottawa wants to phase out oilsands

. January 28, 2020 at 2:35 pm

Decision on Teck’s massive $20.6-billion oilsands project could be delayed, environment minister says

Officials say final say rests with cabinet, noting ministers have the power to ask for more information, which would mean extending the deadline

. January 28, 2020 at 2:39 pm

With decision expected soon, Indigenous communities divided over Teck oilsands project

The $20-billion Frontier mine has the First Nations group that support it calling for respect from those opposed

. January 28, 2020 at 2:41 pm

First Nation says Alberta premier is ‘killing’ proposed oilsands mine by failing to address concerns

‘This would be the first time that the Alberta government is killing its own oilsand project,’ says chief

. January 30, 2020 at 1:19 pm
. February 1, 2020 at 7:25 pm
. February 5, 2020 at 4:27 pm

Canada, on the other hand, elected a government that believes the climate crisis is real and dangerous – and with good reason, since the nation’s Arctic territories give it a front-row seat to the fastest warming on Earth. Yet the country’s leaders seem likely in the next few weeks to approve a vast new tar sands mine which will pour carbon into the atmosphere through the 2060s. They know – yet they can’t bring themselves to act on the knowledge. Now that is cause for despair.

The Teck mine would be the biggest tar sands mine yet: 113 square miles of petroleum mining, located just 16 miles from the border of Wood Buffalo national park. A federal panel approved the mine despite conceding that it would likely be harmful to the environment and to the land culture of Indigenous people. These giant tar sands mines (easily visible on Google Earth) are already among the biggest scars humans have ever carved on the planet’s surface. But Canadian authorities ruled that the mine was nonetheless in the “public interest”.

https://www.theguardian.com/commentisfree/2020/feb/05/when-it-comes-to-climate-hypocrisy-canadas-leaders-have-reached-a-new-low

. February 6, 2020 at 6:46 pm

Canada readies aid for Alberta as deadline for provincial oil sands project nears: sources

OTTAWA — Canada is preparing an aid package for Alberta, heart of the country’s struggling oil industry, that would help dull the pain if it blocks an oil sands project that could create thousands of jobs, sources familiar with the matter said this week.

Rejecting the project would be “a devastating signal for investors looking at Canada,” a spokesman for Alberta’s energy minister said. About 20 oil sands projects currently sit dormant despite receiving approval.

Options being considered in the provincial aid package, to be featured in the upcoming budget, include a cash injection to help clean up thousands of inactive oil and gas wells abandoned by bankrupt companies, five sources with knowledge of the situation said.

. February 13, 2020 at 1:42 pm

Alberta environment minister says First Nations concerns with Teck Frontier are about money | CBC News

https://www.cbc.ca/news/politics/environment-minister-nixon-acfn-teck-frontier-1.5460388

. February 13, 2020 at 1:46 pm

Clearing the air on Teck Frontier: Here are the expected benefits — and harms — of the oilsands project

Andrew Leach & Martin Olszynski
CBC News · Posted: Feb 12, 2020 2:00 AM MT | Last Updated: February 12

The project is being framed as both a test of Prime Minister Trudeau’s resolve to combat climate change, and a referendum on the federal government’s support for Alberta’s economic interests and its commitment to national unity.

Frontier is among the most destructive oilsands projects assessed to date.

Frontier’s remediation and reclamation plans, which like all of its predecessors must address the contentious issue of the project’s tailings, are marked by a high degree of uncertainty.

Teck’s plan would see 240 million cubic metres (about 100,000 Olympic-sized swimming pools) of fluid fine tailings accumulate on the landscape by 2037.

Teck estimates that reclamation liabilities on the site will peak at $4.3 billion in 2037, and that $2.9 billion of reclamation liability will remain when the mine ceases production in 2066.

Teck’s reclamation plan requires “45 to 65 years or more” of post-closure care. Sixty-five years after the mine’s expected closure would be the year 2131.

The JRP did not make a final determination with respect to the project’s greenhouse gas (GHG) emissions, estimated at 4.1 million tonnes of CO2 equivalent per year.

Whether Frontier’s significant adverse environmental effects are “justified in the circumstances” appears to depend largely on the positive economic ones. The JRP is explicit: “the economic benefits for Alberta and Canada and the expected social and economic benefits for Indigenous communities outweigh the adverse environmental effects.”

The environmental damage doesn’t change with the oil price, but economic benefits do. As oil prices change, so do the taxes, royalties and returns to investors that inform the benefit side of the equation.

These likely benefits have dropped — a lot.

. February 13, 2020 at 1:47 pm

“Moving from a 2011 oil price forecast to a current equivalent would reduce expected revenues from the Frontier project (all else equal) by about a quarter, while reducing taxes, royalties and return on capital each by about a third.

If oil prices follow the $65 plus inflation break-even cited by the Canadian Energy Centre, that would reduce revenues by almost two thirds, and taxes, royalties and returns to investors by about three quarters.

At today’s oil prices, plus inflation, revenues would be reduced by three quarters relative to 2011 forecast levels, and taxes, royalties and returns on capital would be reduced by about 95 per cent.”

. February 14, 2020 at 7:50 pm
. February 17, 2020 at 11:44 am

Liberal MPs Urge Trudeau To Reject Massive Alberta Oilsands Mine

Liberals are concerned the $20-billion project would undermine a pledge to be net zero by 2050.

. February 19, 2020 at 4:53 pm

Ottawa formally asks Alberta to enact cap on oilsands emissions as Teck Frontier decision looms

Annual 100-megatonne cap was introduced introduced by Alberta’s previous NDP government

. February 19, 2020 at 6:31 pm

Regardless of the decision, Teck Frontier proves the system is still broken

Canada is facing a decision on the biggest oil sands mine proposal in almost a decade. Alberta’s Frontier oil sands mine, proposed by Teck Resources, has gone through a lengthy regulatory process culminating in a recommended approval from a joint federal-provincial review panel and is now under consideration by the federal cabinet. A casual observer might assume that given the potential environmental and economic impacts, this process would have been comprehensive.

Yet, the panel’s report, which shares the reasoning behind the decision, is remarkably weak on its considerations of climate impacts. Surprisingly, no conditions were proposed that mitigated any of the project’s climate effects. In a year in which two thirds of Canadians voted for stronger climate action, this is unacceptable.

In the 1,300-page report, only seven pages were spent discussing the climate impacts from the project, and in that space, the panel dismissed much of the evidence put in front of it. Moreover, the panel remained silent on whether emissions from the mine would result in a “significant adverse effect.”

Contrary to popular belief, the bitumen that would be produced by the project – as approved by the joint review panel – would not be best in class from a climate emissions standpoint. Yet the panel accepted that, as proposed, Frontier would be, at best, an average emissions performer per barrel, compared to its oil sands neighbours. This has much to do with the lower quality of the ore that the company would extract, leaving it exposed as investors increasingly consider carbon risk. It encouraged the company to do better, but imposed no conditions to ensure this aspiration.

The panel also rejected any consideration of alternative oil price forecasts put in front of it. It instead relied on a highly optimistic forecast for global oil demand and future oil prices. This means that in order for Canadians to enjoy the stated economic benefits from the project, we are likely accepting that the world will fail to prevent the worst impacts of climate change.

. February 20, 2020 at 1:47 pm
. February 20, 2020 at 1:56 pm

What the Teck Mine Will Destroy

Old growth, wetlands, wildlife. Everything the review panel added up and wrote off.

. February 20, 2020 at 2:20 pm

Dene National Chief says Teck mine could be ‘our Wet’suwet’en’

The Dene National Chief believes a forthcoming decision on Teck Resources’ Frontier mine could trigger the NWT’s equivalent of recent protests seen on Wet’suwet’en land and around the country.

. February 21, 2020 at 2:33 pm

As Nobel prize winners, we demand Justin Trudeau stop the Teck Frontier mine

All new projects that enable fossil fuel growth are an affront to our state of climate emergency. It is a disgrace Canada is considering them

. February 21, 2020 at 2:33 pm

The Wet’suwet’en are more united than pipeline backers want you to think

Amber Bracken: The difference between Wet’suwet’en hereditary chiefs and elected chiefs is rooted in Aboriginal title, an issue that the Government of Canada continues to leave unresolved

. February 21, 2020 at 6:41 pm
. February 21, 2020 at 11:15 pm

Decision on Teck oilsands mine coming next week: Jim Carr

Carr insists he’s not signalling approval: ‘Canadians will decide if they agree’

. February 24, 2020 at 5:08 pm

Last-minute negotiations settle a First Nation’s concerns over the Teck Frontier oilsands mine

Alberta and a First Nation announced deal over the Teck Frontier mine Sunday — but project now in doubt

. February 24, 2020 at 5:09 pm

Teck withdraws application for $20B Frontier oilsands mine

Announcement came hours after Alberta said it struck deal with First Nations on project

. February 24, 2020 at 5:10 pm

As Teck shelves $20B oilsands project, Kenney blames Ottawa | Calgary Herald

Federal cabinet was expected to rule on the mine this week. Teck’s sudden decision to withdraw its application has many consequences, but one is to get Ottawa off the hook for a ruling that deeply divided the Trudeau cabinet

. February 24, 2020 at 5:11 pm

Teck’s decision to bail on Frontier lets everyone off the hook to the country’s detriment | Calgary Herald

But here’s the thing: that discussion was happening, thanks to the impetus of a deadline to decide on a project that had the potential to crystalize what this country’s elected government means when it says we can maintain a fossil-fuel industry and fight climate change at the same time.

Instead, Lindsay might have sabotaged the dialogue he said he wants, not encouraged it.

With a federal Conservative leadership race in train, a minority government in Ottawa, and a pack of right-wing premiers keen to blame Prime Minister Justin Trudeau for everything that’s wrong with the country, you tell me if you think Canada’s political leaders will use that “space” constructively?

. February 26, 2020 at 8:15 pm
. February 26, 2020 at 8:28 pm
. February 26, 2020 at 8:28 pm
. February 26, 2020 at 8:29 pm

Now that Teck Frontier is dead, is there a future for Canada’s oilsands?

‘A lot of companies are saying, ‘Why bother with Canada? We’re going elsewhere,’ analyst says

. February 27, 2020 at 1:56 pm

Teck’s Oilsands Mine: The Case Kept Getting Worse and Worse

Alberta’s Kenney blames Ottawa, but the project killer was the market.

. February 28, 2020 at 4:44 pm

Teck knew as much. In his letter explaining the decision, Teck chief executive officer Don Lindsay effectively said the company was no longer willing to have its project become fodder for an interjurisdictional bunfight over climate and energy policy, nor did it believe it should have to answer for matters well beyond the company’s control. “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 wrote. “It is our hope that withdrawing from the process will allow Canadians to shift to a larger and more positive discussion about the path forward.”

But here’s what Frontier really was: an improbably large bet on a bygone oil market. Its emissions would have been significant and, when combined with the local environmental effects, presented a significant barrier to its construction. But as the mine becomes, to some, a symbol of a broken regulatory process, the fallout from the application withdrawal should not distract from what has really changed in Alberta’s oil sands industry, nor should it provide comfort to those fighting for better local and national environmental policies. In winning the battle, they may still lose the war.

Frontier would have been a $20-billion investment for Teck, which is more than twice its current market capitalization. The company could not have built it without a partner, but it may not have been in a hurry to build it at all. Teck announced a $1.2-billion writedown in the future value of its 21.3-per-cent share of Suncor’s Fort Hills mine because of lower expected prices for bitumen. Frontier would have been, to a reasonable approximation, a larger version of Fort Hills, which at full operation barely generated enough cash to pay for continuing capital investment last year, while paying only $1.85 a barrel in royalties to the Alberta government. To generate a healthy return on the capital invested in Fort Hills, oil prices would need to be back in the range of US$80.

. February 28, 2020 at 4:56 pm

‘Amazing News’: Climate Activists Celebrate Victory After Forcing Company to Abandon Proposed Tar Sands Project

While welcoming this win against the fossil fuel industry, organizers vowed to “continue to fight because our planet and future is at stake.”

. March 10, 2020 at 4:58 pm

Teck is dead. What’s next?

Clayton Thomas-Muller, a member of the Mathias Colomb Cree Nation and an organizer with the environmental organization 350.org, won’t call it a death knell for the oil and gas industry in Canada until it comes straight from the top. “It’s only a matter of time, but [Teck being rejected federally would have been] the final nail, that represent[ed] the end of big oil in Canada. But Teck wasn’t rejected. Wherever the pressure came from, […] they pulled their own application. I think that that was to avoid [federal rejection].”

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