Illustration; Source: Frontier Centre for Public Policy (FCPP), an independent Canadian public policy think tank

No more oil & gas permits off Canada’s Pacific coast

In an ongoing push for environmental protection, Canada has seized control of all 227 offshore oil and gas exploration and production permits off its Pacific coast, putting a stop to further hydrocarbon extraction activities in this area.

Illustration; Source: Frontier Centre for Public Policy (FCPP), an independent Canadian public policy think tank

With the changing tides in the global energy arena, more pressure is placed on oil and gas players to decarbonize and pursue energy transition opportunities with more vigor. The same pressure is felt by many countries and governments around the globe as environmental and climate activists resort to legal action to stop further drilling activities and new oil and gas projects while doing their best to push governments into setting out plans for the phase-out of fossil fuels.

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This by no means signifies a definitive end for the oil and gas industry as these energy sources are still running the show all over the globe and control the lion’s share of the energy mix. However, the energy transformation to low-carbon and green sources is also gaining ground day in, day out. Canada’s announcement about the completion of the voluntary relinquishment process for the last remaining oil and gas permits off its Pacific Coast does not come as a surprise since this is the expected result after Chevron Canada decided to voluntarily give up its 23 offshore oil and gas permits on the country’s west coast.

“Chevron regularly evaluates its portfolio and has no plans to pursue development of these offshore permits, which are an estimated 5,900 square kilometres. We remain committed to safely and responsibly developing Canada’s onshore and offshore oil and gas resources. Providing affordable, reliable and ever-cleaner energy is essential to an orderly energy transition that balances energy security, economic prosperity and environmental protection,” outlined Chevron earlier in February 2024.

This came less than a year after ExxonMobil and Chevron surrendered 20 offshore oil and gas exploration permits off the coast of British Columbia, following a lawsuit challenge brought by Ecojustice, Canada’s largest environmental law charity. Many think that these permits, which were first issued in the 1960s and 1970s, should have expired decades ago, but they flew under the radar, as Natural Resources Canada extended them indefinitely.

Since 1972, a federal moratorium has been placed on all offshore oil and gas operations on Canada’s west coast, but any permits granted before this were still active and available for development. After the challenge Ecojustice brought, Chevron surrendered 19 offshore oil and gas exploration permits within sensitive marine areas on the west coast by April 2023 while ExxonMobil relinquished its permit earlier that same year along with several more off British Columbia, which were not challenged.

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Commenting on the relinquishment of the final permits, Jonathan Wilkinson, Canada’s Energy and Natural Resources Minister, said in a social media post: “Canada’s Pacific Offshore is now completely free from oil and gas permits – all 227 of them. Today, we have secured a better future for our Pacific Ocean, including for the Great Bear Sea and its marine life.”

The reactions to the relinquishment of these permits show that the public is divided on the issue. Some frown upon this move as they see it as a risk to Canada’s energy security. They believe that the move has the potential to hinder further development not just of energy projects but also the transition to a sustainable future, as investments from the oil and gas industry could have bankrolled these green and low-carbon projects.

Those opposed to this move believe it could negatively impact the country’s economy, leaving economic devastation in its wake. On the other hand, others celebrate the relinquishment as a big win for the climate and the environment, enabling the protection of coastal wildlife areas.

Jonathan Wilkinson, Canada's Minister of Energy and Natural Resources, and Justin Trudeau, Prime Minister of Canada; Source: Jonathan Wilkinson website
Jonathan Wilkinson, Canada’s Minister of Energy and Natural Resources, and Justin Trudeau, Prime Minister of Canada; Source: Jonathan Wilkinson website

The government’s decision to put an end to an offshore gas project in Nova Scotia recently triggered a similar wave of opposing reactions, with Brian Zinchuk, Editor and Owner of Pipeline Online and occasional contributor to the Frontier Centre for Public Policy, pointing out: “Nova Scotia and the feds kill an offshore gas project, while their bills are paid by Alberta and Saskatchewan oil and gas.

“Well, isn’t that just peachy? Nova Scotia’s Progressive Conservative government teamed up with the federal Liberal government to put a bullet in the head of the province’s natural gas industry, whose body was apparently still twitching, despite having been thought dead since 2018.”

With elections looming on British Columbia’s horizon this year and Canada’s general elections slated for next year, left-wing politicians are likely to put more pressure on oil and gas players to curb their emissions while their right-wing counterparts will continue to extoll the country’s hydrocarbon resources, which could clinch the nation’s place at the top of the global oil, gas, and LNG producers and exporters’ list.

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The government of Justin Trudeau, Prime Minister of Canada, has not been enamored with oil and gas or inclined to pursue significant new LNG infrastructure projects. Whether more oil and gas or green policies are in store for Canada and which side it will pick on the global energy chessboard will be determined by these upcoming elections.