Teck withdrawal might be the shakedown Alberta needs – Cochrane Today

Fingers are pointing in all directions.

On Sunday, Feb. 23 Teck Resources Limited announced a notice of withdrawal of their regulatory application for the Frontier oil sands project from the federal environmental assessment process.

The federal government was expected to grant or reject final approval of the mine by the end of this week. Premier Jason Kenney alleges that the federal cabinet advised Teck that they wouldnt provide a yes or no decision on the application this week, but instead it would be deferred to some point in the future. Trudeaus director of communications denied this allegation and in a statement said a decision hadnt been reached.

Regardless of who said what, and when, Kenney released a statement after the withdrawal that said his government did their part, but the federal governments inability to convey a clear or unified position let Alberta, and Teck, down.

Albertans had high hopes that the project, touted as a socially and environmentally responsible project by the Vancouver-based company, would provide 7,000 jobs and $70 billion dollars in new tax and royalty revenues that could have funded social services in the province for the next four decades. A day before the withdrawal the project received support from 14 First Nations and Mtis organizations in the area about 110 kilometres north of Fort McMurray.

In a statement addressed to Jonathan Wilkinson, Minister of Environment and Climate Change Canada, Teck Resources president and CEO Don Lindsay said there is an urgent need to reduce global carbon emissions and support action on climate change. He adds:

Global capital markets are changing rapidly and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconcils resource development and climate change, in order to produce the cleanest possible products.

In fact, throughout the two page letter the company made references to addressing climate change, global carbon emissions, environmental regulations and ethical oil. Images of clear water and greenery also grace the Frontier projects online brochure as if to cloud the reality that this very project would have generated about 4.1 million tonnes of carbon dioxide annually while producing up to 260,000 barrels of oil per day by 2037.

Last week Wilkinson said Albertas 100-million-tonne cap on oilsands emissions could be exceeded by 2030 if the $20.6-billion project was approved.

Teck Resources based the viability of its Frontier mine on the premise that oil prices would average about $95 per barrel until the 2060s. The current price of oil is less than $60 per barrel and Canadas National Energy Board predicts that $75 is likely a long-term price.

Teck also proposed a project that will cost $20 billion to build, while their entire market capitalization is under $10 billion. This endeavour is especially risky during a time when many investors are undecided on the future of the oil sands. The sector is in a tough position with low oil prices, legal challenges, regulatory uncertainty, opposition, constrained pipeline capacity and Trudeaus governments commitment to lower greenhouse gas emissions and adhere to climate policy.

Ottawa's handling of the rail blockades has also been to blame for Tecks withdrawal.

Its also understandable that Kenney feels hes lost a significant bid for greater control and autonomy for Alberta within Canada. He says factors that led to the withdrawal will further weaken national unity.

Reckoning aside, if Kenney wants to lead our province into economic prosperity he may need to look beyond oil and gas. This projects failure should be seen as a sign that our provinces economy needs to be diversified and action on Kenneys part needs to happen sooner than later.

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Teck withdrawal might be the shakedown Alberta needs - Cochrane Today