Ottawa's decision on Bay du Nord oil project off Newfoundland delayed another 40 days

A decision on the proposed Bay du Nord oil project off the coast of Newfoundland will be delayed by another 40 days, according to Federal Environment Minister Steven Guilbeault.

In a news release issued Friday, the federal government says more time is needed to decide if the project is likely to cause "significant adverse environmental effects." The minister will also take a report from the Impact Assessment Agency of Canada into account.

Ottawa's decision for the project was set for Sunday, but was originally scheduled for Dec. 6. The 40-day delay means a decision could come by April 13.

The project has reportedly caused a division within Prime Minister Justin Trudeau's cabinet, according to Radio-Canada, which reported in February that several Liberal ministers from Ontario, Quebec and British Columbia want to reject Bay du Nord. 

Sources told Radio-Canada that Deputy Prime Minister Chrystia Freeland was in favour of the project and had cited the economic benefits it would bring to Newfoundland and Labrador.

St. John's South-Mount Pearl MP Seamus O'Regan, the federal labour minister, had also defended the project, according to Radio-Canada, however in a message to CBC News on Feb. 10, an official in O'Regan's office said that the minister could not comment because the project is "under active review."

Norwegian oil giant Equinor and its partners are proposing to develop the massive oil field in the Flemish Pass, some 500 kilometres east of St. John's.

The plan is to use a floating production, storage and offloading vessel, commonly known as an FPSO, capable of producing up to 200,000 barrels daily.

Equinor confident resolution can be found

Equinor executives have suggested their intent to continue with the project, with an investment decision expected within the next two years, and first oil by as early as 2028.

In a statement to CBC News, Equinor officials say they are disappointed to see a further delay and are confident a resolution can be found in the coming weeks.

"The Impact Assessment Agency of Canada assessment concluded that 'the Bay du Nord Development Project is not likely to cause significant adverse environmental effects, taking into account the implementation of mitigation measures," the statement reads.

The Newfoundland and Labrador Oil and Gas Industries Association also called the delay disappointing, calling the project environmentally sound and critically important to the province's future.

Paul Barnes, director of Atlantic Canada and Arctic for the Canadian Association of Petroleum Producers, is confident the project can move forward — but said a second delay concerns him. 

"It sends the wrong signal, basically, to the international investment community," Barnes told CBC News Friday evening. "Companies that want to move energy projects here go through a very lengthy system and still there's no clarity as to when a decision can be made."

Barnes said he believes the delay could also impact future exploration projects off Newfoundland.

"There's a lot at stake. Companies who are planning to do exploration activity in Newfoundland will look at this and say 'Well, why would I want to explore here knowing that if I find something and wish to develop it, I may never get approval to develop it?' " he said.

"If these projects can't go ahead, it has a knock-on effect for additional investment."

O'Regan and Newfoundland and Labrador Premier Andrew Furey also both made statements through Twitter Friday, saying the project is under review by government.

"This project will play a key role in helping the province meet global demand for responsible oil while supporting our government's commitment to Net Zero by 2050," Furey wrote, adding he has spoken to Trudeau about the importance of the project.

Furey was not available for an interview Friday evening.

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