Banks may be going bust at an unprecedented rate, but the financial crisis could start hitting oil development, no more so in Alberta, where the high oil price is a pre-requisite for profitable investment.

This is OilWeek’s gloomy assessment “Plummeting oil prices and the stock market meltdown have raised concern that Alberta´s energy boom may be heading for a bust.”

Canadian MPs are trying to spin that their industry could be in real trouble. They are downplaying the recent shelving of the BA Energy Heartland multibillion-dollar upgrader project near Edmonton. “I see no bust whatsoever,” Canadian Finance Minister Iris Evans said earlier this week. “We have such a solid footing here in Alberta … we’re going to continue to grow and flourish.”

But despite Evans’ false sense of optimism, OilWeek reports that “five other major projects in the same area are also being reconsidered.” The trade magazine quotes one long-time oil analyst who says that we are entering a “critical junction with oilsands, and that “New capital investment is starting to look questionable.”

Oil Week is not the only one pointing out oil sands problems. The Canadian Globe and Mail reports today that “Market woes” are hitting the oil sands projects. The paper reports that “global financial crisis is threatening new Alberta oil sands processing projects, as tighter credit lines and lower oil prices cause companies to look for cheaper alternatives.”

The last time there was a bust in Alberta’s energy industry in the eighties, it took nearly two decades to recover. This time the boom has been much greater and the bust could be much deeper.