Royal Dutch Shell announced last week that it is abandoning its 200,000 barrel-per-day Pierre River tar sands/oil sands mine, the largest project so far to be deferred due to falling oil prices.
Pierre River “remains a very long-term opportunity for us but it’s not currently a priority,” said Shell Canada President Lorraine Mitchelmore. “Our current focus is on making our heavy oil business as economically and environmentally competitive as possible.”
Shell “originally halted work on the Pierre River project a year ago, stating the need to re-evaluate the timing as a heated environmental review process was taking longer than anticipated,” Think Progress reports. The company “was one of the earliest tar sands producers to cut staff due to low oil prices, laying off around 300 workers at its Albian tar sands project in Alberta” beginning in January.
Phillips notes that “instability makes it hard for most companies to do business, and unreliable oil prices are no different,” with crude oil down more than 50% in the last six months. “Last August, Mitchelmore said Shell Canada’s tar sands business met profitability markers when crude traded above $70 per barrel.”