Cancelled Teck oil sands project underscores global climate-energy policy tension

WINNIPEG, Manitoba/OTTAWA, (Reuters) - Teck Resources Ltd’s surprise decision to cancel a planned C$20.6 billion ($15.6 billion) oil sands mine in northern Alberta, citing uncertainty about Canada’s climate policy, underscores a global struggle to balance energy growth with environmental concerns.

The Frontier project became the latest casualty in oil-producing countries with robust environmental movements agitating to cut fossil-fuel development due to global warming. Pipeline and drilling projects in the United States and Canada, the largest and fourth-largest oil producers in the world, have been halted or delayed due to opposition to energy development.

Teck yesterday withdrew its application to the Canadian government to build Frontier.

“The world is changing .. you can no longer build a strong economy if you are not fighting climate change at the same time,” Prime Minister Justin Trudeau said in Ottawa’s House of Commons.

Delays in building new pipelines have forced the Alberta government to curtail oil production. Protests by indigenous groups linked to a planned gas pipeline have disrupted railways.

On top of those challenges, Frontier required higher prices, expanded pipeline capacity and a partner, Teck Chief Executive Don Lindsay said last month.

At an investor conference in Florida on Monday, Lindsay said Frontier landed in a national debate about energy development, indigenous issues and climate change.

Those concerns have motivated opposition to TC Energy Corp’s Keystone XL pipeline running through both the United States and Canada, which has been in development for a decade.

“Literally over the last few days, it has become increasingly clear that there is no constructive path forward,” Lindsay told investors in a speech.

Yesterday, Oklahoma-based energy giant Williams Companies Inc cancelled a natural gas pipeline that had been in development for eight years, in part due to ongoing opposition.