By Bruce Lantz
Canada’s mothballing of attempts to tap into the world’s fourth-largest oil reserves took another step last week when the federal government announced it would replace decommissioned offshore oil wells in Nova Scotia with clean energy efforts, establishing a competitive, world-class offshore renewables sector.
Minister Jonathan Wilkinson, Canada’s minister of natural resources, and Tory Rushton, Nova Scotia’s minister of natural resources and renewables, on April 11 jointly announced plans to collaborate on establishing an offshore renewables sector focused on wind energy and clean hydrogen production. A similar agreement already has been signed with the province of Newfoundland and Labrador.
The agreement would see the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) mandate expanded to include the regulation of offshore renewable energy development, amendments to the Canada-Nova Scotia Offshore Energy Board, and even renaming the CNSOPB to the Canada-Nova Scotia Energy Board (CNSOEB). This new board will become the lead regulatory body for offshore energy in the areas offshore of Nova Scotia, “creating a predictable and streamlined regulatory environment and promoting investor confidence in the deployment of renewables,” the federal government said in a news release.
“The Government of Canada is supporting Canada’s energy sector as it seeks to compete in the net-zero economy of tomorrow,” said natural resources minister Jonathan Wilkinson in the release.
The move signals a change in direction for government, which in the past has facilitated offshore oil rigs in the area. The federal government in late March tabled its 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy, citing an emissions reduction target of 40-45% below 2005 levels by 2030, and net-zero emissions by 2050, with a key component being a cap and cut of emissions from the oil and gas sector at the required pace and scale.
“Nova Scotia is a national leader in fighting climate change and we’re committed to having 80% of our electricity needs met with renewables by 2030,” said Tory Rushton, Nova Scotia’s minister of natural resources and renewables, in the release. He said the expected offshore wind and clean hydrogen production projects will provide “multiple pathways” to clean energy goals and will also provide good quality “green jobs” for Nova Scotians.
He said offshore renewables projects could include tidal energy, wave energy, offshore wind including hydrogen, and “any renewable resource that can sustainably be harnessed through the ocean”. But he stressed that this won’t mean the end of oil and gas projects on the East Coast.
“As we move toward clean energy it is important that we have a diversity of options available,” he told Resource World Magazine. “While there has been a decline in the offshore oil and gas interests, natural gas is an important part of the transition. This change doesn’t close the door on new exploration projects but allows the board the ability to focus offshore development for renewable energy projects to support our commitments to clean energy.”
Rushton said the next step will be a regional assessment that will be used to inform governments regarding future planning for offshore wind developments. The CNSOEB’s regulatory experience, technical expertise and administrative capacity for operating energy projects in a marine environment will be “invaluable”.
The board welcomes the expansion of their mandate. “With the two offshore natural gas projects successfully decommissioned and no drilling planned, we are all excited to work with both governments, indigenous groups and our stakeholders . . . to transition our world-class experience and expertise to the regulation of the renewable energy sector,” said CNSOPB chair Barbara Pike.
Nova Scotia has a long history with offshore exploration and development, which started with the first project off Sable Island in 1959. Canada’s first commercial production of offshore oil began in 1992 from the Cohasset and Panuke fields located offshore Nova Scotia, and followed in 1997 by production from the Hibernia oilfield off the coast of Newfoundland and Labrador. Hebron, the newest offshore project off the coast of Newfoundland and Labrador, came online in 2017 with production expected to peak at150,000 barrels per day. In the past, Nova Scotia and Newfoundland and Labrador have accounted for 5% of Canada’s oil production and 1% of the nation’s gas production – 220,000 barrels of oil and a trillion cubic feet of gas every day.
“With some of the best offshore wind resources in the world, Nova Scotia can develop this resource to meet increasing demand for clean electricity, and also to produce clean fuels such as green hydrogen for export and domestic use,” Elisa Oberman, executive director of Marine Renewables Canada, said in the news release.
Things are much different on Canada’s west coast, where there has been no offshore drilling since 1972, thanks to moratoriums imposed by both the provincial and federal governments at that time. There has been a moratorium on offshore drilling in the Canadian Arctic since 2016, although the Beaufort Sea offers reserves of 67 trillion cubic feet of natural gas and 7 billion barrels of oil.
According to the Canadian Association of Petroleum Producers (CAPP), while there has been no offshore activity offshore of Nova Scotia in recent years, assessments show “significant resource potential” with 120 trillion cubic feet of natural gas and 8 billion barrels of oil predicted. Combined with the proximity to markets, existing infrastructure and the approval of the environmental assessment of the Bay du Nord project, there is an expanded potential for offshore opportunities, said CAPP spokesman Jay Averill.
“A reliable, secure and sustainable offshore oil and natural gas industry requires continued long-term investment in exploration and development,” Averill said.
The expanded mandates for offshore boards reflects an expanded opportunity for energy development in Canada at a time when Russia’s invasion of Ukraine has brought the global energy security and affordability crisis to the doorsteps of Canadians, and getting more Canadian natural gas and oil to international markets is a “vital solution” to reducing global emissions and enhancing energy security, said Averill.
“Canada’s offshore industry is part of the solution to a lower carbon energy future, the long-term diversification of Atlantic regions’ economies as well as the energy supply to a growing population as oil and gas will continue to be an important part of the world’s energy mix for the foreseeable future.”