EXCLUSIVE: Wilkinson pauses East Coast offshore oil exploration bid

Federal Natural Resources Minister Jonathan Wilkinson has put a hold on a pending oil and gas exploration licence for the offshore of Nova Scotia, which, if approved, would restart fossil fuel activity offshore after years of dormancy.

In October, the Canada-Nova Scotia Offshore Petroleum Board, which regulates oil and gas activity, announced one successful bid of $1.5 million from Inceptio Limited to explore a parcel on the Scotian Shelf.

In an exclusive interview with Canada’s National Observer, Wilkinson said while he respects the role of the board — which recommended the bid move forward — he needs more time to come to a conclusion.

“I have also heard significant concerns expressed by a number of stakeholders in Nova Scotia about this particular proposal and certainly, it's been quite some time since there was significant oil and gas exploration and production in Nova Scotia,” he said.

“And I just felt like I needed to understand the concerns a little bit better to ensure that, you know, myself and the provincial minister have an opportunity to reflect on those concerns before any decisions are made.”

The Nova Scotia and federal governments both have to approve the bid for it to move forward with exploration, which could include drilling wells and performing seismic testing. However, on Friday, Wilkinson announced he was placing a 60-day hold on the fate of the licence while he works to engage with stakeholders and understand the environmental concerns. He has sent a letter to the board notifying them of the suspension.

Wilkinson’s department said the Liberal government has suspended four offshore exploration bid decisions in N.S. since coming to power in 2015.

There are currently no active exploration licences in the province or active projects, and critics are urging the province to take the opportunity to ditch fossil fuels for good and instead focus on offshore renewables. Nova Scotia has had five offshore fields, which operated from 1999 to 2018 and produced 2.1 trillion cubic feet of natural gas while in service.

Wilkinson said he plans to consult with Sierra Club Canada as well as people who are not necessarily in clear opposition, such as the business community.

The bid is approximately 119,803 hectares in size, an area which could fit on the Halifax Peninsula about 63 times. The area neighbours Sable Island, which is 290 kilometres southeast of Halifax and is known for its unique wild horse population and breadth of biodiversity. In 2018, exploration bids around the island faced harsh criticism and a successful bid was ultimately abandoned.

“And in addition, the licence is right beside the Gully Marine Protected Area, home to endangered bottlenose whales, which are very vulnerable to seismic blasting and drilling,” said Gretchen Fitzgerald, national programs director of Sierra Club Canada, in a press release this week.

In 2022, groups celebrated when they noted “BP and Equinor abandoned the last remaining oil leases offshore Nova Scotia.”

When the latest bid was announced, Fitzgerald told Canada’s National Observer continuing to allow offshore oil and gas exploration and extraction goes against mounting evidence that the world needs to slow down fossil fuel production and halt new project approvals to have a chance of staying within 1.5 C of global warming.

In September, the International Energy Agency reaffirmed there isn’t room for new oil and gas projects in a climate-safe future, and that a ramp-up of clean energy is needed to replace carbon-emitting energy sources.

Next door in Newfoundland

When asked if he thought there was an opportunity to avoid locking in another province to fossil fuels, Wilkinson said he is not “prejudging the outcome” but that it’s a point that has been raised by environmental groups and it “behooves us to reflect seriously on concerns that have been raised.”

However, there is precedent for offshore oil and gas development backed by the federal government right next door. In 2022, over $238 million worth of exploration licences were awarded in Newfoundland by the provincial-federal regulator. Also in 2022, Environment and Climate Change Minister Steven Guilbeault approved Bay du Nord, stating it was environmentally sound. He determined the project, about 500 kilometres east of St. John’s in Newfoundland, “is not likely to cause significant adverse environmental effects.”

Wilkinson said new exploration for offshore oil and gas needs to be thought about in the context of Canada’s climate change plan, which includes a 40 to 45 per cent reduction in emissions below 2005 levels by 2030.

“That doesn't mean there's no further exploration, but it does mean you better reflect on all of those issues in the context of that,” he said.

“As we did, for example, in the context of approving the Bay du Nord project, we thought very hard about all of those issues. We did approve it. But we thought very hard about those issues, and we will continue to do that every time these types of issues come up.”

The Sierra Club is currently appealing an unsuccessful court case against the approval of Bay du Nord along with Équiterre and Mi'gmawe'l Tplu'taqnn Incorporated — a group representing eight Mi’gmaq communities in New Brunswick, who say Guilbeault didn’t have the full picture when considering the project’s environmental effects and that the project was unlawfully approved. The environmental assessment he based his approval on was missing downstream emissions, which happen when the oil is burned, and ignored the potential effects marine shipping activity could have on the environment and Mi'kmaq rights, the groups maintain.

Meeting with Rushton

Wilkinson said his meeting with Nova Scotia’s Natural Resources and Renewables Minister Tory Rushton about the offshore bid was “very positive and very constructive.”

In October, N.S. and New Brunswick — both provinces that have recently been at odds with the federal government over climate policy — presented a united front with Wilkinson in their efforts to transition off coal. Later that month, Prime Minister Justin Trudeau announced the carbon price applied to home heating oil will be paused for three years on the East Coast.

“I do think this is an opportunity for us to collaborate and to work together and to come to sort of common, informed decisions just as we did on the Atlantic heating oil issue, and actually the heating oil issue across the country, but also on the electricity issue,” said Wilkinson.

“I think Nova Scotia showed great leadership in the context of putting aside differences and sitting down [to figure] out how we can actually make this work. And yeah, I see this as an opportunity to build on that.”