Unease within Alberta’s resource sector after Teck withdraws oilsands mine application
CALGARY -- Just days before the federal cabinet was set to discuss potentially approving the Frontier mine in northeastern Alberta, Teck withdrew its regulatory application for the project.
The $20 billion oilsands mine — that was proposed for a site roughly 110 kilometres north of Fort McMurray — was expected to provide 7,000 construction jobs and 2,500 full-time jobs.
Now, the fallout from the company’s decision’s to withdraw has some experts expressing concerns with the optics.
"We have created an environment that doesn't attract capital," said Richard Masson of the University of Calgary’s School of Public Policy. "Without that, we're not going to get the jobs and economic growth that our country needs."
Premier Jason Kenney called the news a "grave disappointment."
"Canada has lost the opportunity for $70 billion in new tax and royalty revenue that could have funded our generous social services over the next four decades," said Kenney in a statement.
Teck called the decision a "difficult" one. Company officials say they pulled their application due to low oil prices and unrest when it comes to Canada’s climate change plan.
"Global capital markets are changing rapidly and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products," said Teck resources CEO Don Lindsay in a letter to federal environment minister Jonathan Wilkinson.
"This does not yet exist here today and, unfortunately, the growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved.
"In that context, it is now evident that there is no constructive path forward for the project."
Kenney lays the blame on Ottawa for not being decisive with the project. "The federal government's inability to convey a clear or unified position let us, and Teck, down."
Alberta’s NDP leader blames Kenney for this projects failure saying it has become a "political football."
Rachel Notley says that if Alberta had a concrete carbon action plan, investors would not shy away from developing in the province.
"They're not looking for a framework that say have at 'er, it's the wild west," said Notley. "That’s what Jason Kenney would love to have in place. That is not what international investors are looking for."
One political scientist says that, given the economic uncertainty around oil prices, companies are having to think about making multi-billion dollar investments.
"It does say that there is a problem," said Duane Bratt, Mount Royal University political scientist. "At the same time, there's about 20 oilsands projects that have been approved that haven't been constructed because of the drop in the price of oil."
Operation of the mine would have started in 2026 and was expected to produce more than 250,000 barrels of oil each day. Approximately four million tonnes of greenhouse gases would have been emitted every year.
Over the weekend, the province announced that it had made agreements with two Indigenous groups in the area on the project.
Teck had benefit agreements with 14 Indigenous groups in the area. Some Indigenous elders opposed the project, saying the mine would "destroy this land completely," but others believed that the job opportunity could not be dismissed.
Earlier this month, the Canadian Association of Physicians for the Environment (CAPE) called for the government to not dismiss community concerns regarding potential increases in cancer rates, food contamination and pollution in a letter signed by 175 health experts.