(Adds finance minister comment)
By David Ljunggren and Steve Scherer
OTTAWA, Feb 7 (Reuters) - Officials from the energy-rich Canadian province of Alberta on Friday insisted the federal government approve a massive oil sands project, rejecting the idea that aid from Ottawa would soften the blow if it were to be quashed.
Reuters reported on Thursday that Canada is preparing a financial package that would help dull the pain if it blocks Teck Resources Ltd's plan to build the C$20.6 billion ($15.7 billion) Frontier mine that has raised climate and wildlife concerns.
"We're not looking for a handout from the federal government; we're looking for the federal government to get out of the way of our province," Alberta's Environment Minister Jason Nixon told reporters in Calgary.
Any economic assistance for Alberta is "separate and distinct" from the Teck decision, Finance Minister Bill Morneau told reporters in Ottawa.
Alberta strongly backs the project on the grounds it would create 7,000 jobs and help revive a struggling provincial energy industry. The federal cabinet of Prime Minister Justin Trudeau must make a decision by the end of this month.
Alberta Premier Jason Kenney said Teck had spent close to C$1 billion over a decade as it cleared a series of regulatory hurdles. A rejection now would show global capital markets that major projects could obey all the rules and still fall afoul of what he called an arbitrary political decision, he said.
"I think that would be a devastating message to send in terms of investor confidence at a time when we are struggling to attract foreign direct investment to the Canadian economy," Kenney told a business audience in Washington, D.C.
Kenney said it would be "hard to overstate" Albertans' reaction to a possible rejection of the project. Unhappiness with the government's energy and pipeline policy cost Trudeau's Liberals all their Alberta seats in October 2019 elections.
Alberta sits on the world's third-largest proven reserves of crude, but low oil prices and a lack of pipeline capacity are hurting the industry.
Teck President and Chief Executive Don Lindsay recently questioned whether the mine would ever be built, in part because oil prices were not high enough.
Several proposed Alberta oil extraction sites have been approved but are not going forward.
"The Teck mine proposal would just join the twenty other oil sands projects sitting on the shelf because they don't make economic sense in a world moving away from oil," said Keith Stewart of Greenpeace Canada. (Reporting by David Ljunggren and Steve Scherer Editing by Bill Berkrot, Andrew Cawthorne and Richard Chang)