Conservatives Furious With Trudeau Over $20B Teck Mine Project Cancellation

Teck Frontier's CEO cited a lack of climate change policies in his decision, but experts say bad economic prospects for the oil industry are likely to blame.
February 24, 2020, 8:29pm
Jason Kenney and Justin Trudeau
Jason Kenney, left, Adrian Wyld (CP) and Justin Trudeau, right, Fred Chartrand (CP)

This article originally appeared on VICE Canada.

A massive $20 billion-Alberta oil sands project has been cancelled, infuriating Canadian conservative politicians, who are blaming Justin Trudeau and Indigenous-led rail blockades.

Vancouver-based Teck Resources Limited CEO Don Lindsay said his company is pulling its application for the Frontier oil sands project, a $20.6-billion mine that would have produced 260,000 barrels of oil per day, in a two-page statement addressed to Jonathan Wilkinson, Canada’s Minister of Environment and Climate Change. A parliamentary vote on whether to green-light the project was planned for Tuesday, but has since been canceled.

Lindsay cited incomplete climate change policy as a reason for hitting the breaks.

“Customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change,” Lindsay said. “This does not yet exist here today, and, unfortunately, the growing debate around the issue has placed Frontier and our company squarely around much broader issues that need to be resolved.”

An onslaught of responses from politicians, mostly from Alberta but also outgoing Conservative leader and Paw Patrol fan Andrew Scheer, ensued after the letter was published.

Shannon Phillips, an NDP MLA from Lethbridge, said Teck canceled the mine because Premier Jason Kenney dismantled Alberta’s climate leadership. In a long statement, Kenney maintained the mine was economically viable and lamented that its cancellation means 7,000 fewer potential jobs in Alberta. He blamed recent events for catalyzing a lack of trust between Teck and the government.

“Teck’s decision is disappointing, but in light of the events of the last few weeks it is not surprising,” Kenney said. “It is what happens when governments lack the courage to defend the interests of Canadians in the face of a militant minority.”

Scheer directly linked Teck’s decision to the ongoing Indigenous-led railway blockades taking place across the country in solidarity with Wet’suwet’en hereditary chiefs—and Prime Minister Trudeau’s inability to stop them.

“Make no mistake, Justin Trudeau killed Teck Frontier,” Scheer told reporters on Monday.

In his statement, Lindsay said he is not “shying away” from political tension.

“The nature of our business dictates that a vocal minority will almost inevitably oppose specific developments,” Lindsay said. “We are prepared to face that opposition.”

Dana Andersen, is a University of Alberta professor of economics, called the company’s letter “vague” and said it was likely purposefully written in a non-partisan tone.

A lack of cohesive climate change policies between Ottawa and provincial governments might have influenced Teck’s decision to drop the Frontier project, he added.

“That a big question mark that lots of companies have,” Andersen told VICE. “Even with the election of Kenney, climate change policies have been changed and that itself has created a lot of uncertainty about how the federal and provincial governments will work together in order to establish climate change policy for Alberta.”

Ultimately, Andersen said the biggest issue likely lies with oil prices, and he’s skeptical that a long-term oilsands project of Frontier’s scope is economically viable today.

“Kenney is saying it indeed was an economically viable project, but people have raised some concerns with those projections,” Andersen said. “I read that the project was originally forecasting oil prices that were much higher than prices are currently.”

“People in Alberta have viewed the last half-decade as a time of low oil prices,” Andersen added. “Some people think things are eventually going to pick up, but I’m pretty skeptical of that.”

According to Andersen, companies have slowed investment in large-scale mining operations because it’s no longer economically feasible as countries around the world work to decrease greenhouse gas emissions. Canada is already far from reaching its commitment to decrease emissions to 30 per cent below 2005 levels by 2030. As countries start thinking about doubling down on their commitments to decrease emissions, oil prices will continue to drop, Andersen said.

“If there are policies put into place to meet global objectives, demand for fossil fuels drops, and then prices,” Andersen said. “With projects like Frontier, I question whether they’re economically viable at all.”

A Finnish government report recently warned that the global oil industry is on the verge of a meltdown due to its underlying economics.

Minister of Natural Resources Seamus O’Regan put out a joint statement with Wilkinson in support of Teck’s decision.

“Global investors and consumers are increasingly looking for the cleanest products available and sustainable resource development,” the statement said. “We agree with Teck and leading industry groups that all orders of government need a real plan for climate action now and to reach a net zero economy by 2050.”

Trudeau reaffirmed his commitment to Alberta’s energy sector in his own vague statement.

Follow Anya Zoledziowski on Twitter.