WAITING, WAITING – for Bay du Nord Sanity to Break Out

Guest Post by Cabot Martin

Welcome, perhaps, to the age of Climate Change Sanity? 

My words, I fear, will not match danger of the hour or
the honour of filling the highly regarded Uncle Gnarley Monday morning slot. 
Only last night, I was on the phone with the man himself, dodging and
weaseling, trying to get out of it.
 

But Uncle Gnarley, with his big white beard and all,
is not to be trifled with and he soon laid down the law –
 

“How can I run a Blog if you are going to get on like
that, changing your mind at the last minute?”
 he asked sternly,
after raining down fire and brimstone, or at least the threat of such.
 

So I, whimpering , slung off in my chastised state to
ponder with nothing more than a few fragments of an idea to work on.
 

Of course, my present confused condition is totally Bay
de Nord induced.
 

I watched the PM’s Climate Change Guidelines Announcement
out in Vancouver this week, seeking some comfort  – live or just about live, thanks to someone
who shot and posted it on YouTube. Very informative and partly reassuring
except that the long portions in French were completely garbled.
 

Either the guy with the camera had failed to pay his French
translation software bill or someone had hacked the proceedings. When the text
on the screen was going on about “Narcos” I just knew something was wrong.  
 

It’s a worry. 

And then there’s the West Hercules drilling rig making
her way across the Atlantic. Spotty reports since she cleared the Shetlands – is
she still really on her way?
 

More worry. 

I know I shouldn’t be like that. 

Sure , I know, I know, that given all the reasons why
doing Bay du Nord makes sense, the project should pass with flying colors. The
Environmental Review Plan basically gave it a green light.
 

Still a feeling of dread.

West Hercules (Equinor photo)

 

I’d even tried to put myself in place of the members
of the Federal Cabinet , a daunting task, akin to trying to imagine what a
Martian  would be thinking.

The plan outlined by the PM, or something like it, is
both necessary and very complicated; the implementation of it even more so.

The need for rational moves and the generation of political
consensus will take many initiatives and years to bring to fruition. A
countless series of moves and compromises; real world meeting “aspirational”
goals. Big rackets will not help the process.

And sure, the Ukraine Crisis has changed the water on
the beans anyway and projects such as Bay du Nord will be needed – particularly
to help supply our European allies who are already wondering if Canada really
gets it. For Europe, the current state of affairs is not a short term problem –
the break with Russia, and all that that means, is fundamental.

And Bay du Nord’s ultra low CO2 intensity per barrel
of oil produced would be by far the lowest in Canada!

And that’s the measurement by which, under the Trudeau
Plan, all activities must now be judged; that’s something that is decidedly in
our favour. And every industry – and the transportation sector – will need to be
put under that same micro-scope.

To avoid financial chaos, objective criteria, tempered
by compassion, will need to be adhered to;
political Dog eat Dog fights have to be
avoided.

And, sure, then
there’s the fact that Bay du Nord is located outside the 200 mile limit.

Now, under the Law of the Sea Convention, Bay du
Nord’s oil and gas is still ours just as much as Hibernia is. And we have just
as much regulatory control over it’s development as if it were inside 200 miles.

BUT

Even though Canada (aka Newfoundland) has one of the
few continental shelves in the world that goes beyond 200 miles, at the Geneva
Session of the Law of the Sea (LOS) Conference in April 1977, Ottawa
proposed
  that the LOS Treaty say that
wide shelf states like Canada should pay an escalating and eventually
substantial royalty on all oil & gas produced beyond 200 miles to a UN
entity.

Ottawa said that this offer, eventually enshrined in
the LOS Convention, was fair given all the other benefits Canada, as a whole,
would get from the overall Law of the Sea Convention.

But think, Bay du Nord would be the very first oil field
anywhere in the world to pay a royalty on every barrel produced to the UN’s
International Seabed Authority
 – for the
benefit of, and to be distributed to, the world’s least developed countries –
how could Ottawa be against that?
  

Sure it was their idea !

And then I starting thinking about the reputational
loss that would come with a cancellation of Bay du Nord.

For a “cancellation”, not a “failure to approve”, is
what has been held out as a possibility.

Equinor and partners have spent hundreds of millions
of dollars on exploration at Bay du Nord.

In 2020, they drilled an Exploratory Well at the Cambriol G-92 location that made a
brand new discovery that reputable sources say contains
more oil than
all the other fields in the Bay du Nord complex put together. And they want to
drill again in the next few months, using the West Hercules, to get a better
idea just exactly how big it might be.

In other words, the Cambriol structure, alone, looks
to be a “Giant” field , the kind oil companies dream of, work towards, and
prize – and they need them to make up for all the small finds and the many dry
holes they drill.

And they have, like all such investors, a reasonable
expectation that they will be able to reap their just reward.

And now Ottawa is going to “cancel” all that?

And bear the opprobrium of the worldwide investment
community that Canada is a place where rule changes can totally upset your investment
applecart?

No, Ottawa, I eventually reasoned, will not want it’s
big and important Climate Change Plan jeopardized, which will need the support
of the financial community and industry (and not just the oil industry) if it
is to succeed.

No, there really should be nothing to worry about.

No, Climate Change Sanity can indeed break out in
Ottawa.

Stranger things have happened – though, and here I go
again, the list is short.
 


 

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