Emissions cap offers stability for offshore oil amid a coming peak in oil and gas demand and globally declining investment.

Media Statement: For Immediate Release February 3rd, 2025

Sierra Club Canada is responding to statements by Energy NL shared on their "X" account this morning which positioned offshore oil and gas as a solution to current economic threats from the United States and singled out the emissions cap as an obstacle. Energy NL’s statements are the latest in a long line of attempts by oil and gas corporations to exploit international crises to their own short term benefit. In this case the the tariff crisis is being exploited by Energy NL to the short term benefit of projects not even located in Newfoundland and Labrador.

While Sierra Club Canada shares a concern for workers well-being in this time of crisis the organization stresses that supports for workers should go directly to workers themselves and to retraining programs rather than to oil and gas corporations.

There are three main problems with what Energy NL has said about offshore oil and gas and the emissions cap, according to Sierra Club Canada: 

• First, new offshore oil projects, like Bay du Nord, would take years to come online even if started today and oil demand is set to peak globally within this decade. Thus they would have no market by the time they were built. A declining investment interest in new oil and gas projects is not a factor of domestic climate policy but rather a factor of a realization among investors that this peak is coming.
  
• Second, with increased oil production in the U.S. and Trump calling for lower oil prices, new offshore projects are going to become less practical, not more practical. Equinor's stock was downgraded last year in part because the company continued to consider Bay du Nord - showing how economically risky even the most realistic project is. 
• Third, in relation to the emissions cap, and given the factors above, the only chance existing offshore oil will have to compete will be in being able to show it is greener. An emissions cap could allow the existing offshore oil industry to sell carbon credits to more polluting projects in Alberta providing stability. This will not happen, however, without government regulations like the emissions cap to facilitate those claims and sales.

"Trump is blocking offshore wind in the United States," says Gretchen Fitzgerald, National Programs Director with Sierra Club Canada. "Canada should be taking this opportunity to lead on that file and build energy resilience and connectivity, and a greener data future."

"What you've got here is Energy NL using a national crisis to defend more polluting oil and gas projects at the expense of NL's own oil industry, workers, and Canadian energy security," says Conor Curtis, Head of Communications with Sierra Club Canada. "The EU is still following through on climate action and scrapping climate policies only plays into Trump's hands by holding us back on an energy transition."

It is imperative the Government of Newfoundland and Labrador not dedicate any public funding or subsidies to future oil projects and instead focus on renewable alternatives. It is our reliance on oil and gas that has gotten us into this mess and lobby groups like Energy NL continue to put the short term profits of largely U.S.-owned oil companies ahead of the economic well-being of Newfoundland and Labrador. 

Only by shifting to alternative industries can we hope to solve the threat posed by the United States’ proposed tariffs.

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For more information and interviews please contact:

Conor Curtis, Head of Communications, Sierra Club Canada

Phone: 7096380072

Email: conorc@sierraclub.ca