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Exxon/Imperial Shifts $2B From Retail Business to Tar Sands/Oil Sands

Werner77 / Pixabay

Exxon’s primary Canadian brand will invest $2 billion in a new tar sands/oil sands production facility after selling its last remaining company-owned Esso retail gas stations for $2.8 billion.

Imperial Oil Ltd., 70% owned by the U.S. energy giant embroiled in FBI investigations for having concealed what it knew about fossil fuels’ contribution to climate change, revealed its intention to develop a new production facility in Alberta’s bitumen region using a new “solvent-assisted” production process. It claims the technique will reduce the plant’s greenhouse gas emissions by 25% compared to conventional tar sands/oil sands technology.

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Ordinary steam-assisted gravity drainage (Sag-D) uses super-heated steam and water to melt bitumen underground, allowing it to flow to recovery wells. Exxon/Imperial’s new process will use solvents like butane and propane to reduce the amount of energy needed to heat water.

Alberta is phasing in new climate policies that will raise its carbon tax on tar sands/oil sands production to $30-per tonne beginning in 2017. Exxon/Imperial expects its new plant to go into production by 2022.

Last month, Exxon reported its lowest quarterly profit since September 2002 and announced a 25% cut in its capital spending for 2016. Imperial Oil, Canada’s second-largest integrated oil producer and refiner, reported quarterly net income of C$102 million, compared to $671 million in the last quarter of 2014, and a 22.5% drop in revenue.