Open Letter to PM Trudeau: No Federal Funding For Oil & Gas

The following article by Andrew Robinson was published in The Telegram on June 13th.  It summarizes the open letter which was sent to PM Trudeau regarding federal funding for oil and Gas.

                        Federal support for offshore sector would be misguided, critics say
                 Open letter suggests funds better spent on clean industries, fisheries, tourism
 A campaign involving Newfoundland and Labrador’s offshore industry and other players looking for federal funding to boost the sector during a difficult time is receiving some pushback from multiple groups with ties to social justice and the environment.

An open letter to Prime Minister Justin Trudeau was published Wednesday on the website of the Council of Canadians, asking him not to provide funds to support exploratory drilling in the province’s offshore. It is signed by representatives of 23 groups, including Coalition for a Green New Deal NL, Social Justice Co-operative NL, Grand Riverkeeper Labrador Inc., Sierra Club Canada Foundation and Greenpeace Canada.

The combination of volatile oil pricing and the COVID-19 pandemic has been disastrous for the industry in Newfoundland and Labrador. The Newfoundland and Labrador Oil and Gas Industries Association (Noia) has reported that thousands of jobs have been lost. It’s also been projected that the province could lose $60 billion in gross domestic product in the next 18 years.
Noia issued its own open letter last week, asking the prime minister to consider applying two previously used incentives — the Petroleum Incentive Program (PIP) and Atlantic Investment Tax Credit — to encourage exploration.

NO SUBSIDIES
This week’s open letter to Trudeau has a decidedly different take on the situation. In it, the groups call on government to look for other ways to help Newfoundland and Labrador’s economy, suggesting it would be better off supporting clean industries, fisheries and tourism instead of subsidizing petroleum exploration.
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“This would be more of a transition to something other than oil and gas for our economy,” said John Jacobs, chair of the St. John’s Chapter of the Council of Canadians.
“There are certainly many options on that front. It’s exploratory drilling that really gets to me, because the fact is we have proven reserves. We have companies who were producing oil and shut down for other reasons. It had nothing to do with the COVID-19 crisis — (it’s) because of the world economy.”

The groups argue that funding for the offshore sector would be incompatible with the climate commitments Canada and Newfoundland and Labrador have already made. Neria Aylward, an organizer with Coalition for a Green New Deal NL, noted the province recently committed to achieving net-zero carbon emissions by 2050.

“In light of that, it makes even less sense, the advocacy they’re doing on behalf of the petroleum industry here in Newfoundland and Labrador,” she said. “The shift from a petroleum economy to a more diverse economy will not happen if our government is kind of playing for both sides. Right now ... petroleum isn’t profitable, we’re seeing that. What we’re asking is not for it to shut down overnight. We’re just asking that public money, which is limited ... that’s it’s not being given to an industry that’s in direct contravention of the government’s stated plans to be at net-zero by 2050.”

WRONG PATH
According to Jacobs, the province is not on a path to meet that target. He expects this year carbon emissions in the province will be down by four to seven per cent but that’s only because the pandemic slowed the economy.

“This is comparable to the rates of decrease that we need, but we need that kind of decrease — something approaching 10 per cent year after year — for the next decades to limit the climate change,” he said.

The letter suggests public trust in the industry has eroded due to safety concerns and regulatory oversight that tends to favour the interests of the oil and gas sector. It also notes the federal government is currently falling short on its commitment to eliminate fossil fuel subsidies, adding it should consult and seek consent from Indigenous people in the province before any further expansion of offshore activity proceeds.

NOIA’S RESPONSE
Noia CEO Charlene Johnson was out of the office Friday and unavailable to comment on the letter. In a statement released to The Telegram, Noia said it welcomes constructive debate, but reiterated its point that the industry is facing a “stark reality” that’s also hurting the province’s economy.

“As well, the letter does not acknowledge the lower carbon emissions of our offshore oil compared to the global average, the dedication of the people who work in the industry to ensure stringent safety and environmental regulations are upheld, the commitment of the provincial government to achieve net-zero emissions by 2050, and the commitment of our industry to help lead the transition to renewable energy mixes and use our considerable expertise to do so.

“Thousands of people are out of work and the future of an industry that provides substantive benefits to Newfoundland and Labrador and Canada is at risk. Noia will continue its advocacy efforts for support from the Government of Canada that allows our offshore to be globally competitive, attract investment and offshore exploration, and get people back to work and help our hurting economy. The consequences of not doing so would be disastrous to our people and province.”
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