Good morning!

Earth smashed heat records this week, and Canadians got a taste of a hotter world. Logging pollution is on the rise, but you won’t find it on the accounting books. And Canada’s carbon-storing peat has a climate conundrum that involves your garden.

It’s been a week of wild weather across the country. From thunderstorms to sky-high temps to more of that lingering wildfire smoke, I hope you’re staying safe wherever you are. I’m turning seaward for today’s newsletter as my colleague Cloe Logan reported this week on one province’s hopes for an oil boom off the East Coast and why that dream may never turn into reality. Read on to find out more about just how much the energy transition is already making some fossil fuel companies rethink their plans.

As always, you can let me know what you think of this newsletter at [email protected].

Have a great weekend and stay safe!

— Dana Filek-Gibson

Looking for more CNO reads? You can find them at the bottom of this email.

What’s happening off the East Coast?

On the East Coast, one province’s dreams of offshore oil may already be out of reach.

Newfoundland and Labrador has set its sights on doubling the province’s offshore oil industry by 2030. If the plan is going to work at all, it’s got to happen fast. The world is moving away from fossil fuels, and the province knows it. So it’s offering incentives to companies that start drilling sooner than later in a bid to bring in some much-needed cash.

But some of the major players exploring off the East Coast are already starting to back away. Just last month, fossil fuel giant BP announced it will abandon an exploratory well that was expected to uncover billions of barrels of oil. The company didn’t explain why, but industry watchers floated two main theories: either BP found nothing under the sea floor or the company decided investing in a new fossil fuel project was too financially risky in a world racing to net zero.

BP isn’t the first company to have second thoughts. The crown jewel of Newfoundland and Labrador’s offshore push is also in limbo, as Norwegian company Equinor recently announced an up to three-year delay for its development, too. Bay du Nord was billed as a megaproject and Canada’s first deepwater oil site. There’s still a chance the project could go ahead, but in a fast-changing energy market, it’s also possible it will be called off altogether.

To some, federal climate policies are responsible for the companies’ about-face on these projects. But there’s more to the story. As the Canadian Climate Institute’s Dale Beugin told CBC last month, “The biggest threat to the oil and gas sector in Canada isn't domestic climate policy. It is actually market conditions over the longer term.”

The Canada Energy Regulator backs up that assessment. If Canada lives up to its promise to achieve net-zero greenhouse gas emissions by 2050, our country’s oil production will peak as soon as 2026, according to a recent report from the federal agency. In Newfoundland and Labrador alone, production is expected to fall by 99 per cent, all but disappearing in a net-zero world. And that’s assuming Bay du Nord goes ahead.

The future is grim on the demand side, too. The International Energy Agency expects the world’s need for oil to max out this decade. In transportation alone, demand is expected to top out three years from now thanks to the rise of electric vehicles.

Nonetheless, Newfoundland and Labrador is standing firm in its goal to boost offshore oil and gas. But it’s an “ambitious” one, researcher Temitope Onifade told my colleague Cloe Logan this week. Temitope, who works in law and climate policy, says rising inflation, global competition, dwindling fossil fuel subsidies and more climate policy are driving uncertainty around new oil and gas investments.

But that doesn’t mean everyone has backed off. ExxonMobil, which already has operations off the coast of Newfoundland and Labrador, is set to kick off more East Coast exploratory drilling this summer. And around the world, the IEA estimates oil, coal and gas firms will put $707 billion (US$528 billion) into fossil fuel expansion this year. That lines up with the agency’s projections for oil demand from now until 2028. It doesn’t, however, square with Canada’s promise — one that’s shared by dozens of other countries — to reach net zero by 2050.

Ultimately, there’s a slim chance an offshore oil push could rake in some cash for Newfoundland and Labrador. Those projects will become worthless as the world shifts to clean energy, and some fossil fuel companies, it seems, are thinking twice before they drill. The East Coast oil boom could be over before it ever really started.

More CNO reads

If you’re not terrified, “you’re not paying attention.” Earth shattered heat records three times this week. Natasha Bulowski spoke with politicians and a climate activist about what the rising heat means for Canada and its climate policy.

“It's basically one of the reasons we're here as a people.” Salmon are a vital staple for Takla First Nation — and with the fish’s future in serious danger, the community is doing everything it can to save them before it’s too late, Marc Fawcett-Atkinson reports.

RBC’s merger with HSBC Canada will cost us all. Letting RBC — one of the biggest fossil fuel funders in the world — buy up HSBC Canada means Canadians will have one less option for more sustainable banking, writes Toronto parent Vanessa Brown.

Could wildfires wipe out Canadians’ access to home insurance? Yes and no. Tori Fitzpatrick breaks it down.

Ontario wants more nuclear power. Its proposed plan still has hurdles to cross with the federal government, but if Ottawa gives the green light, the expansion will be Ontario’s largest nuclear power project in more than 30 years, Cloe Logan reports. But First Nations near the proposed site are not saying yes to anything until they get some questions answered.

Compostable bags wound up on the wrong side of the federal plastics ban. When the next phase of Ottawa’s single-use plastics ban takes effect in December, the compost-friendly bags will no longer be allowed. Isaac Phan Nay explains why.

In B.C., a couple farms for the climate future. Tamara McPhail and Adam Schick are part of a team that’s been stewarding the land at Linnaea Farm on Cortes Island for nearly 25 years, Rochelle Baker reports.

Toronto is giving e-scooters a second chance. The city is designing a pilot program, set to launch next summer, that would allow residents to rent them, Abdul Matin Sarfraz reports.