A joint federal-Alberta review panel is recommending approval of Teck Resources Ltd.’s proposed Frontier oil sands mine, despite finding it would have serious environmental impact and might make it difficult for Canada to meet its climate-change commitments.

In a report released late Thursday, the joint review panel said that the jobs and economic benefits from the oil sands mine outweigh the environmental impact, which include destruction of wetland and old-growth forests and threats to vulnerable species such as lynx, caribou and one of Canada’s few remaining wild bison herds.

“Although we find that there will be significant adverse project and cumulative effects on certain environmental components and Indigenous communities … we consider these effects to be justified and that the Frontier project is in the public interest,” the three-person panel concluded. Alberta was represented by the Alberta Energy Regulator, while Ottawa was represented by the Canadian Environmental Assessment Agency.

Among the findings, the panel said the Teck oil sands mine would be a major contributor of greenhouse gases (GHG), though the company says it would employ leading technology to ensure per-barrel carbon emissions are below those of the average crude refined in North America. Still, the mine would add four-million tonnes a year of CO2 emissions over its 41-year life span, even as Canada pledges to dramatically reduce emissions as part of an international effort to avert the worst effects of climate change.

The panel’s recommendation raises a new political challenge for Prime Minister Justin Trudeau over the government’s much-debated energy and environment policies. Heading into a fall election campaign, his government has been slammed by Conservatives for failing to defend the Alberta-based oil industry and assailed by the New Democrats and Green Party for approving the Trans Mountain oil pipeline expansion and falling short on commitments to reduce GHG emissions.

By law, Ottawa has until Feb. 28, 2020, to make a final determination on whether to approve the project, based on a finding that the significant adverse impact in areas of federal jurisdiction are justified.

The review panel concluded the Frontier project, which would produce 260,000 barrels a day of bitumen, would create 7,000 constructions jobs and 2,500 permanent ones, as well as contribute $70-billion over its lifetime to government coffers.

In a release, Environment and Climate Change Canada said the federal regulator will consult with Indigenous groups on the panel’s report, and invite the public and Indigenous communities to comment on potential conditions that could be attached if Ottawa approves the project. “The [environment] minister will consider the results of these consultations prior to issuing a decision statement and any potential legally binding conditions,” the department said in a release.

Teck has concluded benefits agreements with key First Nations in the area, including the Mikisew Cree First Nation and the Athabasca-Chipewyan First Nation; both communities have been critical of oil sands development in the past but said they needed to protect their interests in the face of likely government approval of the mine.

It’s not clear whether the Teck project will ever go ahead, and the company has offered no timeline for an investment decision. Analysts have argued that new oil sands mines are uneconomic at today’s crude prices, and the industry has been battered by insufficient pipeline capacity that has forced it to rely on more-expensive rail transportation to get its growing production to markets.

The company remains focused on concluding the regulatory process, spokesman Chris Stannell said in an e-mail.

“Any further decisions on the project will depend on factors including our review of the joint review panel report, the outcome of the regulatory process which is not expected to be completed until the first quarter of 2020, market conditions and other considerations,” he said late Thursday.

Pembina Institute analyst Nikki Way said the Calgary-based environmental group was disappointed the panel did not make recommendations requiring Teck to ensure it would set aside funds to reclaim the mine site, and to drive down GHG emissions during its long life. She said it is now up to all national parties to justify the approval of major resource projects such as the Frontier mine to voters in the coming election campaign.

“Climate change is a real threat, and every single party in Canada needs to demonstrate how any approval of a project like Frontier is consistent with our commitments to reduce emissions over the long term,” she said.

The Globe and Mail, July 25, 2019