ST. JOHN'S, N.L. — The fate of Husky Energy’s West White Rose project remains unclear, but an injection of $41.5 million of federal money will keep the restart of construction an option in 2022.
Premier Andrew Furey announced the money, which will be matched by Husky, will allow West White Rose to be placed in a warm idle mode throughout 2021. The move will allow the project to restart construction in 2022, but there are no guarantees Husky will resume construction when the time comes.
"We’re positioning ourselves for the rebound in this time of transition so we can capitalize on how valuable this resource is and return it to Newfoundlanders and Labradorians,” said Furey.
The government says the funding for the White Rose project will provide in-province employment for 169 people in project management and engineering, as well as 162 tradespersons in Argentia and Marystown, for a total of 331.
Furey says while there’s no guarantee construction will resume on the oil and gas platform, Thursday’s announcement shows oil and gas industry players are looking to the future.
“Everyone wants certainty, everyone wants a crystal ball, but of course we don’t have one. We don’t have that certainty,” said Furey.
“I think the signal you’ve received from Husky today is they’re planning to move forward. They recognize the value of this project or else they wouldn’t have invested, they wouldn’t have come here with this proposal.”
Federal Natural Resources Minister Seamus O’Regan says even if construction doesn’t resume on the project, the money is well spent.
“Right now, what we’re doing is we’re concentrating on two things: making sure we look after workers where we can, and that they’re doing good work,” said O’Regan.
“I want to be very clear about this: when I say that we’re looking after workers, this isn’t charity. No one is working for charity. These are talented, smart people that we need to keep in place as we get through two crises, the crisis in oil and gas and the pandemic. We can’t afford to lose good people in this province.”
The 50-50 cost share of the warm idle provides a model for how future oil and gas spending announcements could look.
“That’s the concept, it’s a guideline. We’ll kind of look at each on an individual basis, but that’s our goal and objective,” said Furey.
Furey says further announcements on how the remaining money from the original $320 million pot of federal dollars will be spent will come soon.
Jonathan Brown, senior vice-president of Husky Energy Atlantic, says the company’s review of its entire east coast operations remains underway, so he made no commitment to the future of the West White Rose project.
“This is something which is geared very much to maintaining that possibility, that option. Don’t underestimate the importance of that,” said Brown.
The West White Rose project — a 210,000-tonne concrete gravity-base structure that would be placed 350 kilometres east of St. John’s — had work halted in March due to the onset of the COVID-19 pandemic and commodity price crash.
The project was being constructed in Argentia, with as many as 700 jobs associated with the platform’s construction.
Work was approximately 60 per cent complete on the platform when work was suspended, before the company announced in September it was reviewing the future of the project. In late October, the company cancelled all work on the project through 2021.
Karen Winsor, co-chair of the oil and gas industry recovery task force, says the task force guidelines will ensure the money spent on the warm idle stays in the province.
“It needs to be spent within this province and within this community,” said Winsor.
Progressive Conservative Leader Ches Crosbie says Thursday’s announcement doesn’t go far enough. He says, were he premier, he would borrow more money in order to get construction restarted.
“He has to think outside the box. I know we have a debt problem, but I as premier, if we had no alternative, if I couldn’t somehow knock some sense into the federal government and (Prime Minister Justin) Trudeau about this, I would go out and borrow the investment money necessary to put the equity into the project and get it out and pumping oil,” said Crosbie.
“This is borrowing at low interest rates to make an investment. It’s not wasting money. You’ll get it back.”
New Democratic Party Leader Alison Coffin says the workers deserve certainty and that’s not what came on Thursday.
“We have no guarantees. It is so very, very important that we ensure workers have a future. They’ve been hurting for such a long time. They need certainty that work is going to be there for them,” said Coffin.
“The $40 million comes with no guarantees and that’s a problem.”
