FOR IMMEDIATE RELEASE
June 29, 2017
Lorne Stockman, lorne [at] priceofoil.org, +1 540 679 1097
Adam Scott, adam [at] priceofoil.org, +1 416 347 3858
Data driven reality check points to end of growth in the tar sands.
A new briefing released today points to a dramatic drop-off in investment in growth in the tar sands sector. After already under-construction projects – sanctioned before the oil price drop – are completed, no significant new production growth is planned.
This is a starkly different state of affairs for a sector that just a few years ago expected inevitable and rapid growth through the coming decades. It also contradicts the Canadian Association of Petroleum Producer’s recent annual publication, suggesting that the industry lobby-group is misleading Canadians by trying to pass off the wishful thinking of an industry in decline as a forecast.
“Promises that the sector will bounce back are either misinformed or deceitful,” says Adam Scott of Oil Change International. “The golden era of the tar sands is over – just ask international oil companies. Instead of ignoring the writing on the wall, government’s should be coupling a phase-out of oil with a phase-in of meaningful jobs and a stable economy.”
The key findings of the report, released by Oil Change International, include:
- Anticipated tar sands production growth is a legacy from before the 2014 oil price crash. The vast majority still to come on line was sanctioned in 2013.
- After those projects are completed in 2020, no new construction activity is planned.
- As reserves deplete, substantial spending will be required just to maintain slowly declining production.
- Tar sands production growth depends on sustained oil price recovery that many analysts say is unlikely given changing economic and political conditions.
“The tar sands sector is digging in for the fight of its life, but the real casualties will be the workers and communities that are about to be caught in the crossfire,” says Hannah McKinnon of Oil Change International. “Now is the time for governments and shareholders to step-in and ensure the sector doesn’t take everyone down with it.”
In combination with low oil prices, public campaigns to slow and stop tar sands infrastructure in recent years have been successful in staving off investment and delaying projects that would either be in direct conflict with Canada’s climate commitments, or set the sector and province up for debilitating stranded asset risk.
“Managed decline shouldn’t be the scary concept – it is unmanaged decline that should terrify people,” says Lorne Stockman of Oil Change International. “The world is moving away from oil. Climate action and clean technologies are coming online faster than many realize. Expensive tar sands production is the primary loser in a world of declining oil demand. Canada has an unprecedented opportunity to show the world how to responsibly sunset its fossil fuel sector, and it would be wise to take it.”
Download the briefing here.