A few months ago it was all boom in Alberta. There was a labour shortage, skills shortage and the dollars were pouring in. Not any more. One by one the investments are drying up, as the crunch hits and the oil price bounces around the $50 mark.
Oil giant Shell has announced it is delaying yet another project, saying it has withdrawn a regulatory application for its 100,000 barrel per day Carmon Creek thermal project. Only last month, Shell, one of the biggest players in the oil sands, delayed an expansion of its Athabasca project.
As Reuters in Canada argues: “The delay is the latest blow to what had been an ambitious schedule of projects for Canada’s oil sands. “A number of other companies, including Suncor, Petro-Canada, Nexen and Opti Canada, have all recently delayed investment plans in the oil sands, which is one of the highest-cost areas for oil production in the world.
There is no hiding the fact that Shell has been hit by rising costs and falling oil revenue. Adrienne Lamb, a spokeswoman for the company, said Shell is reviewing and redesigning the Carmon Creek project. “The review is looking at opportunities to reduce costs and improve the profitability of the project.”
Any delay can only be good news for the climate. Hopefully by the time Shell has worked out what to do and what its costs are, Barack Obama will be in office and say that America will no longer take Canada’s dirty oil. That would be a difficult decision. But it would not be an impossible one.