Approve Teck Frontier oilsands mine to avoid ‘devastating impacts’ on economy and relations, Premier Jason Kenney tells feds

Rejecting a $20.6-billion oilsands mine in northern Alberta would tell international investors that Canada’s regulatory system is “arbitrary,” Premier Jason Kenney said in a Monday letter to the Prime Minister.

Some analysts have cast doubt on whether Teck would actually move ahead with the Frontier project at all, considering its steep construction costs and a prolonged slump in oil prices. Norm Betts for Bloomberg News

Rejecting a $20.6-billion oilsands mine in northern Alberta would tell international investors that Canada’s regulatory system is “arbitrary,” Premier Jason Kenney said in a Monday letter to the prime minister.

In a four-page missive to Prime Minister Justin Trudeau, signed off with a hand-written postscript, Kenney said a federal cabinet rejection of the Teck Frontier mine project would send a message that “even the best evidence can be trumped by narrow politics.”

The Alberta government is anxious for the project to move ahead, as it could generate a total of $55 billion in royalties and create 2,500 permanent jobs.

In July 2019, a joint provincial-federal review panel found the 29,000-hectare project was in the public interest. Some environmental and Indigenous groups oppose the project, saying it would threaten Canada’s ability to meet international greenhouse gas emission reduction goals and put water, wildlife and forestry at risk.

Teck’s president and CEO has also said the project may not be viable unless Canadian oil prices rise.

Federal Environment and Climate Change Minister Jonathan Wilkinson said on CBC TV’s Power and Politics program Monday afternoon the Teck mine was approved under an older federal regulatory process that is inferior to the current one.

Wilkinson said the joint review panel didn’t consider greenhouse gas emissions or climate change in its approval, because it was beyond its scope of study.

Federal cabinet is set to make a decision about the mine before Feb. 28.

In his Monday letter, Kenney said there is no reason for cabinet to deny approval.

“Given the level of economic benefits, Teck’s environmental commitments, and broad Indigenous support for Frontier, if this project is not approved, it would send a chilling signal regarding federal intentions on future oilsands or natural resource development projects,” Kenney wrote.

A late-stage decision to stop the project would “echo in global markets like a slamming door,” Kenney wrote.

Alberta cabinet ministers have been promoting the project aggressively since Friday, when reports emerged that federal cabinet ministers are mulling an aid package to Alberta that could help soften the blow, should they reject the mine.

Alberta Environment and Parks Minister Jason Nixon said Friday the Teck mine is “not a political gift” to be bargained with, and should be approved on its merits.

Alberta’s emissions cap looms

If built, the mine would produce up to 260,000 barrels of oil per day by 2037 and generate about 4.1 megatonnes of carbon dioxide annually.

The former NDP government put an annual 100-megatonne emissions cap on Alberta’s oilsands, but no regulations have been released spelling out how government would enforce the limit.

Kenney’s letter said oilsands emissions subject to the cap were 67 megatonnes at the end of 2018.

However, Alberta’s qualifying emissions from the oilsands are projected to be 87 megatonnes in 2020 and reach 100 megatonnes by 2030, according to a federal government climate change report submitted to the United Nations last year.

Wilkinson said on Power and Politics he wants Alberta to get its emissions cap regulations in place. Even without Teck, if all approved oilsands projects were built, greenhouse gas emissions would reach 130 megatonnes per year, Wilkinson said.

In his letter, Kenney also said it’s unclear how the Government of Canada plans to achieve its commitment to be “net zero” in energy use by 2050.

“As a matter of fundamental justice, your government cannot assess a project against a standard that does not yet exist, so we trust that you will honour your previous commitments and satisfy existing expectations,” Kenney said.