Teck Resources’ blockbuster decision to walk away from its C$20.6-billion Frontier tar sands/oil sands mine was a “wake-up call” to abandon “a version of Alberta that no longer exists,” Calgary-based opinion writer and self-described “proud centrist” Max Fawcett writes in an opinion piece for CBC News.
The company’s announcement Sunday evening brought a furious response from multiple corners, with the Kenney government and federal Conservative leader Andrew Scheer blaming it on federal government hostility to the fossil sector, while the NDP provincial opposition scorched Kenney for dismantling Alberta’s climate action plan.
“Such is the beauty of Teck CEO Don Lindsay’s letter to federal environment minister Jonathan Wilkinson” that it “allowed both sides to see what they wanted in the company’s rationale, and it ensured that Teck wouldn’t get caught in the ensuing crossfire,” Fawcett writes. “Whoever crafted that statement surely deserves a raise.”
But much as the letter “is a public relations win for Teck, it’s another black eye for Alberta—and another reminder that, for all the talk about balancing economic goals and environmental objectives, Canada still hasn’t really figured out how to do that effectively,” he adds.
“It also raises an important question: How did a project with such obviously marginal economics become such a crucial litmus test for Canada’s ability to balance economic objectives and environmental responsibilities—and, if the premier’s response to the decision is any indication, Alberta’s relationship with the rest of the country?”
Fawcett traces the nearly decade-long history of a project that was launched when global oil prices were above US$100 per barrel, the U.S. shale boom hadn’t yet materialized, and a big, new tar sands/oil sands project “surely seemed like a good hedge for the Vancouver-based mining company—a way to expand and diversify into a sector that seemed poised for almost limitless growth and opportunity.”
But now, oil prices are falling faster than fossils can cut costs to keep up—and no one believes a new bitumen mine built today will be supported by 50 years of higher prices.
“Those sorts of bets used to be fairly common in Alberta, of course, and at the time Teck started to lay its chips on the table, it was one that had paid out handsomely for many. But the cards have turned over the past few years, and some of the players at that table have been bled dry trying to win back what they lost.”
That reality made the Teck project “a metaphor for a version of Alberta that no longer exists,” Fawcett concludes. “There are many who don’t want to acknowledge that the world is changing, that capital markets are rapidly pricing in the risks associated with climate change, or that oilsands mines with 40-year life spans are no longer viewed as attractive investments. And there are many who would prefer to fight for the restoration of this past rather than come to terms with the reality of a lower-carbon economy.”
But even so, “Teck’s decision on Frontier should be a wake-up call to everyone that it’s time to move forward—and a reminder that bets on the past don’t tend to pay out in the future.”