Ottawa approves Total's Joslyn oil sands project

The federal government gave Total SA (TOT-N50.46-1.76-3.37%) approval on Thursday to start construction on its $9-billion Joslyn North oil sands project in Alberta, marking the fifth mining development in the vast crude deposit.

Total, the French oil major, and its Canadian, U.S. and Japanese partners aim to start production in 2017-18, hitting a peak of 100,000 barrels a day.

Natural Resources Minister Joe Oliver announced the decision as controversy spreads at home and abroad over the environmental impact of developing and transporting oil sands crude. Ottawa has made boosting and diversifying exports of the unconventional oil a top priority.

Environmental groups at the United Nations climate summit in Durban, South Africa, have been sharply critical of Canada’s aim to foster more development of the vast oil sands resource, which accounts for rising emissions of greenhouse gases.

Still, Mr. Oliver told reporters in Ottawa that a six-year approval process for the Joslyn North project showed the need to streamline regulations for investors in the oil sands, which is part of the federal government’s push. Mr. Oliver said he favours a two-year review process.

“The oil sands are generating jobs in just about every sector of our economy, from welders to office workers to engineers. But we cannot take these jobs for granted. Oil sands development does not just happen. Investors have other opportunities,” he said.

The approval comes two days after regulators said they extended the hearing process for Enbridge Inc. (ENB-T36.210.411.15%)’s Northern Gateway oil sands pipeline to the Pacific Coast by about a year to the end of 2013, possibly pushing back the start-up date should the controversial project be approved.

The Joslyn North project is located 65 kilometres northwest of the oil sands hub of Fort McMurray, Alta. Total said its construction work force will peak at 4,100 people.

The company said it expects to eventually process the crude at the Voyageur upgrader it plans with partner Suncor Energy Inc. (SU-T29.46-1.05-3.44%)

Total has a 38.25 per cent stake in Joslyn North and is the operator. Suncor holds 36.7 per cent and Occidental Petroleum Corp. (OXY-N92.74-3.53-3.67%) and Japan’s Inpex hold the rest.

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