Teck bows out of Frontier project

Late Sunday evening, only two days before a decision was scheduled, Teck Resources formally asked the federal government to rescind its application for the Frontier mine proposal.

In a statement on their website, Teck resources withdrew its regulatory application for environmental assessment approval.

In an accompanying letter, they said although they are “extremely proud of the work done on this project and the strong relationships” they have formed, Teck said “global capital markets are changing rapidly and investors and customers are increasingly looking for jurisdictions to have a framework in place that reconciles resource development and climate change, in order to produce the cleanest possible products”

“This does not yet exist here today and, unfortunately, the growing debate around this issue has placed Frontier and our company squarely at the nexus of much broader issues that need to be resolved,” the letter to Environment Minister Jonathan Wilkinson said.

“In that context, it is now evident that there is no constructive path forward for the project.”

Teck said the company “will write down the $1.13 billion carrying value of the Frontier project.”

A formal statement from Premier Jason Kenney was posted within half an hour of the Teck announcement, which became public at 7:58 pm on Sunday, February 23.

The premier noted that the decision was “disappointing, but in light of the events of the last few weeks… not surprising.”

“Weeks of federal indecision on the regulatory approval process and incaction in the face of illegal blockades have created more uncertainty for investors looking at Canada,” Kenney said.

“This was an economically viable project… so something clearly changed very recently.”

The statement was then edited to remove the following paragraph, including some redundancy that remained (as noted above):

“The timing of the decision is not a coincidence: Teck’s allusion to ‘public safety concerns makes that clear. This was an economically viable project, as the company confirmed as recently as this week, so something clearly changed very recently. The project would also have shrunk emissions intensity of oilsands production, with oil cleaner than the average barrel of North American oil.”

According to Maclean’s magazine’s Jason Markusoff, the amount of emissions Teck itself has projected are “lower emissions than roughly half” of the average. Alberta economist Andrew Leach notes the same.

“Frontier… has surfaced a broader debate over climate change and Canada’s role in addressing it. It is our hope that withdrawing from the process will allow Canadians to shift to a larger and more positive discussion about the path forward.” Teck’s letter stated.

“(T)here is an urgent need to reduce global carbon emissions and support action on climate change.”

“At Teck, we believe deeply in the need to address climate change and believe that Canada has an important role to play globally as a responsible supplier of natural resources. We support strong actions to enable the transition to a low carbon future,” the letter stated.

“We are also strong supporters of Canada’s action on carbon pricing and other climate policies such as legislated caps for oil sands emissions.”

Teck’s Frontier project had most recently come under fire by Nobel Laureates who said projects such as Frontier were “wholly incompatible with (the Canadian_) government’s recent commitment to net-zero greenhouse gas emissions by 2050.”

Both Teck and the Alberta government boasted a full approval from local First Nations communities in the region of the proposed mine.

But the Frontier mine project, and Teck itself, had become a political football in recent weeks.

In early February, Premier Kenney wrote a letter to the Prime Minister saying western alienation would be brought to a “boiling point” if Frontier was not approved. While Kenney may have seen that solely as a threat to the federal government, Teck couldn’t have relished the possibility of becoming the poster company for breaking up Canada.

There are also environmental considerations – and uncertainty – caused by the ongoing friction between the provincial and federal government, especially when it comes to climate policy.

“The promise of Canada’s potential will not be realized until governments can reach agreement around how climate policy considerations will be addressed in the context of future responsible energy sector development,” Teck’s letter concluded.

“Without clarity on this critical question, the situation that has faced Frontier will be faced by future projects and it will be very difficult to attract future investment, either domestic or foreign.”

Alberta Environment Minister Jason Nixon, after months of contrary sentiment, told Power and Politics that Alberta would be “open to having discussions about where our cap is parked in the oilsands” in order to approve Teck.

However, Teck’s Frontier project was not the only one in line.

Alberta currently has more approved projects than those that have been started since being approved – and it isn’t due to regulations. Oil prices, market access, and future global demand is causing companies to hold the line on development.

Leach said earlier this month that if all projects that were currently approved began development, Alberta’s oil sands emissions would jump to 130 Megatonnes of carbon emissions – a notable difference from the current ~70 Megatonnes – before Teck’s approval.

Teck’s official response should give Alberta’s premier, who is happy to blame Ottawa for Alberta’s troubles, pause – but it’s unlikely.

“Pause” doesn’t build the Party’s war chest, and it doesn’t gain support in the polls.

With the latest attack on Ottawa, the UCP is showing they are less concerned with governing for Alberta’s interests than their own.

This post contains fact and opinon.

Deirdre is a reporter and political observer in southern Alberta.

contact: [email protected], [email protected]

Twitter: @Mitchell_AB for all the commentary; @thisweekinAB for posts; @politicalRnD to guess “who tweeted that”?

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