N.L. oil and gas still has a future following release of federal emissions plan, minister says

Officials in Newfoundland and Labrador's oil and gas Industry say the federal government's plan to dramatically curb greenhouse gas emissions by 2030 is an ambitious one, but the sector still has a future in the province.

The federal plan, announced by Prime Minister Justin Trudeau on Tuesday, leans heavily on cuts to the electricity, oil and gas and transportation sectors — all in the hopes of cutting emissions by at least 40 per cent by 2030.

The plan also includes nearly $2-billion in funding to be directed to the province's future fund, which will help workers in the oil sector upgrade or gain new skills to be on the leading edge of the future zero-carbon industry.

Although the plan is centred around cutting emissions and inefficient fossil fuel subsidies in the coming years, Newfoundland and Labrador Energy Minister Andrew Parsons said it was important for the federal government to recognize the need for oil made with lower carbon emissions.

"When you look at the carbon intensity of the oil and gas here, we average about 14.4 kilograms per barrel…Internationally, the average is 17.9. If you look at Alberta, it's 77. So we're already doing really good when it comes to the product here," Parsons told CBC News Wednesday.

He and other members of the industry point to the proposed Bay du Nord offshore oil project, located 500 kilometres off St. John's in the Flemish Pass, as a project that could be a world leader in low-carbon oil. A decision to move the project forward is yet to be made by Federal Environment Minister Steven Guilbeault.

If the project produces oil, which Norwegian oil giant Equinor say could happen by 2028, Parsons said the carbon intensity on production would be around eight kilograms per barrel.

"Bay du Nord is absolutely the product and the operation that this country needs," he said. "If we stop doing it here, then all we're doing is opening the market to less rigorous products around the world. We're not making the situation any better by excluding ourselves from it. That being said, what's going to be done here will be a national leader."

In a statement to CBC News, Equinor said they support the call from the federal government to reach net zero emissions by 2050, saying Bay du Nord has the potential to produce some of the lowest carbon oil in the world.

The Oil and Gas Corporation of Newfoundland and Labrador echoed a similar idea, saying it can help meet emission targets while meeting the demand for oil.

Energy N.L. CEO Charlene Johnson called the plan ambitious, but says members of the province's industry are equally ambitious when it comes to reducing emissions.

"When you look at where the federal government wants to be by 2030 for the oil sector, we're already there in Newfoundland and Labrador," Johnson said. "And no doubt we are going to work toward continuing to lower that already low carbon oil and we're going to be working on other things like renewables."

Johnson said the group, formerly known as the Newfoundland and Labrador Oil and Gas Industries Association, is confident the industry can be net zero before 2050, while adding the province can look forward to more oil and gas projects offshore if the Bay du Nord project moves forward.