As a lifelong resident of Newfoundland and Labrador with deep family ties, the recent announcement from Premier Wakeham regarding Bay du Nord is deeply concerning to me—both for environmental reasons and financial reasons.
On Tuesday, March 3rd, NL Premier Tony Wakeham announced the signing of an agreement with Equinor and BP to pave the way for the construction of the controversial offshore oil megaproject, Bay du Nord, located around 500 kilometres northeast of St. John’s in the Flemish Pass Basin—reaching up to 1,200 metres deep.
The estimated $14 billion project, which has yet to receive investment approval, would be Canada’s first ever deepwater oil development and Newfoundland and Labrador’s first offshore oil project since Hebron.
First discovered in 2013, Bay du Nord has been in talks for over a decade. A 2018 statement estimated official approval by 2020 with first oil produced by 2025, when the province was under the leadership of former Premier Dwight Ball.
Since then, Bay du Nord has been continuously delayed, largely owing to volatile economic conditions.
In 2023, three years past the initial expected deadline for approval, Equinor announced that the project would be postponed for up to three years “in the face of challenging market conditions.”
The location of the development site outside of Canada’s Exclusive Economic Zone—in international waters—exacerbates financial concerns, with Ottawa agreeing to pay fees related to the United Nations Convention on the Law of the Sea that may reach up to $1 billion in taxpayer funds.
Despite rocky market conditions, Equinor and partners present Bay du Nord as a boon for the province and country’s economy, suggesting the development will create thousands of jobs, up to $20 billion in government revenues, and $50 billion in total GDP contribution.
Although Premier Wakeham and project proponents have sold Bay du Nord as an economic opportunity for Newfoundlanders and Labradorians, allegedly expected to generate $6.4 billion in direct revenues for the province, the global fossil fuel market paints a different picture for the financial viability of future extractive megaprojects such as Bay du Nord.
The International Energy Agency (IEA) announced in 2021 that no new oil and gas projects could be approved beyond that year, if the world has a chance of meeting global climate targets to achieve net-zero carbon emissions by 2050, and maintain the mere opportunity of keeping the global temperature rise at 1.5 degrees celsius.
The International Institute for Sustainable Development (IISD) has further emphasized the importance of not approving new fossil fuel megaprojects, with research demonstrating that existing oil and gas developments are sufficient to sustain global economies during the transition to renewable energy.
Given the legally-binding commitment of global leaders to achieve net-zero emissions by 2050 as part of the Paris Agreement and the wealth of data that indicates construction of new fossil fuel projects makes this target nearly impossible, it is deeply confusing and troubling to support a project that is not expected to produce first oil until 2031, and has the stated potential to extract 430 million barrels over a period of 20 to 30 years—years after 2050.
Premier Wakeham went so far as to say “Bay du Nord is not the finish line of our ambition in this sector. It is the starting line,” suggesting possible continued investment in similar developments.
Beyond environmental implications related to global temperature rise, of which there are plenty—such as, extreme weather events, loss of biodiversity, mass extinctions, ocean acidification, risks for fisheries and agriculture, and more—there are significant economic risks associated with doubling-down on fossil fuel investment.
A 2025 IISD report indicating up to 66% of Canada’s future capital investments in fossil fuel megaprojects are at risk of becoming stranded assets.
Political support for fossil fuel development among global leaders has proceeded to rise in the face of skyrocketing oil prices related to energy shocks as a consequence of Russia’s invasion of Ukraine and the current US-Israel war on Iran.
Canadian leaders, including current Prime Minister Mark Carney and former Premier Andrew Furey, have taken advantage of globally-reaching geopolitical crises to present Canada and NL’s oil as a “green” or low-carbon alternative, which climate scientists have disputed.
Chart demonstrating volatility of global crude oil prices in response to geopolitical events
Ironically, as the former chair of the Financial Stability Board Task Force on Climate-related Financial Disclosures, Mark Carney stated that a carbon budget consistent with a 2 degree global temperature rise, “would render the vast majority of reserves ‘stranded’—oil, gas, and coal that will be literally unburnable without expensive carbon capture technology,” which has not yet been proven to be effective.
Political leaders have yet to take necessary actions to manage the global energy transition and have stubbornly clung on to notions that the fossil fuel industry is critical to Canada and Newfoundland and Labrador’s combined economies; nonetheless, the data supports a global decline for the fossil fuel industry leading to 2050, which is occurring largely independently of government management or energy transition policies.
Current research suggests that global demand for fossil fuels may reach its peak by 2030, carrying a significant risk that high-cost oil producers, such as Canada, will be among the first to get pushed out of the global market as the fossil fuel market faces oversupply.
Without an adequate plan to manage an energy transition aligned with the Paris Agreement, this peak in demand could have devastating impacts on Canada’s biggest oil producers, including Alberta, Saskatchewan, British Columbia, and Newfoundland and Labrador.
NL’s oil and gas revenues would be eliminated nearly entirely, dropping from $4.4 billion to $300 million.
A report from the Centre for Future Work reveals the amount of Canadians directly employed in the fossil fuel sector is relatively small, comprising around 1% of total employment, of which most are near retirement age.
The report also indicates that despite Canada ramping up oil and gas production, employment in Canada’s fossil fuel sector has declined by 38,000 jobs since the sector’s employment peaked in 2014—losses which took place mostly without any government oversight or targeted support for impacted workers.
Meanwhile, owing to geopolitical pressures, record low costs, and global emissions reductions targets, renewable energy is booming—providing an alternative energy source that is not dependent on imports or volatile energy markets.
Even though Canada has yet to fully take advantage of this unique opportunity, the growth of employment in renewable energy outpaces the wider economy and could offset potential losses—Natural Resources Canada estimates that 400,000 low-carbon jobs could be created by 2030 alone.
These realities make it even harder to understand why the Government of Newfoundland and Labrador would continue to invest in a likely high-risk, low-reward megaproject that may end up being even more expensive than was originally projected.
The Government of NL should instead take advantage of the province’s wealth of natural resources (e.g. offshore wind and solar) and the continuously decreasing costs of installation and maintenance of renewable projects to protect our beautiful lands while growing our economy.
There is a way forward that neither sacrifices our land and sea, nor our energy workers. We can choose a path that recognizes the climate crisis and the cost of living crisis as related issues.
A path that invests in community-owned renewable energy projects which have, in some cases, eliminated energy costs for consumers and generated revenue from surplus energy that may be directly reinvested in the community.
It is past time for Newfoundland and Labrador to say no to oil megaprojects, say no to climate destruction, and build a truly sustainable and just economy. Bay du Nord cannot be a part of the drastic change for a better future this province so desperately needs.
