• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
BP Predicts Faster Oil and Gas Decline as Clean Energy Spending Hits $1.1T in 2022 January 31, 2023
Canada Needs Oil and Gas Emissions Cap to Hit 2030 Goal: NZAB January 31, 2023
Ecuador’s Amazon Drilling Plan Shows Need for Fossil Non-Proliferation Treaty January 31, 2023
Rainforest Carbon Credits from World’s Biggest Provider are ‘Largely Worthless’, Investigation Finds January 31, 2023
Danske Bank Quits New Fossil Fuel Financing January 23, 2023
Next
Prev

THE END OF GROWTH: Industry Data Show Tar Sands/Oil Sands Entering Managed Decline

June 30, 2017
Reading time: 3 minutes

sbamueller, Oil Sands Discovery Centre/flickr

sbamueller, Oil Sands Discovery Centre/flickr

 

The fossil industry’s own data shows Canada’s tar sands/oil sands entering a period of managed decline, with no commitments at all to new project construction beyond 2020, Oil Change International concludes in a provocative briefing note issued yesterday.

“Promises that the sector will bounce back are either misinformed or deceitful,” said Senior Campaigner Adam Scott. “The golden era of the tar sands is over—just ask international oil companies. Instead of ignoring the writing on the wall, governments should be coupling a phase-out of oil with a phase-in of meaningful jobs and a stable economy.”

  • Concise headlines. Original content. Timely news and views from a select group of opinion leaders. Special extras.
  • Everything you need, nothing you don’t.
  • The Weekender: The climate news you need.
New!
Subscribe

Unpopular as the idea may be, in Alberta and in the rest of Canada, “the only real alternative to a managed decline is something much worse: an unmanaged decline,” writes Senior Campaigner and briefing note co-author Hannah McKinnon. “This is a dramatic change of events in a sector that just a few years ago was anticipating major expansion and sustained growth. Instead, the sector is facing the end of any significant capex [capital expenditure] in new growth, and the challenge of trying to squeeze a profit out of projects that were sanctioned in a US$100 per barrel world in one that is instead moving towards decarbonization.”

McKinnon notes that tar sands/oil sands capacity additions have fallen sharply since 2013, with no new approvals so far in 2017. And capital expenditure beyond 2016 “only includes investment in projects that have already been approved. This capex ends in 2019, as projects currently under construction begin production. For that to change, new projects will have to be sanctioned by oil companies.”

Fossil boosters like the Canadian Association of Petroleum Producers like to point to the short-term rise in tar sands/oil sands production as a sign of the industry’s resilience, she adds. But those projects, approved before the oil price crash, are only “still lumbering toward their start-up dates because of the long construction timelines that are common to the sector. What is less discussed is the exodus of major international oil companies that have seen the writing on the wall, leaving a handful of Canadian companies holding the reins of an industry that has likely boomed for the last time.”

The industry’s long-term prognosis is not likely to draw new investment, McKinnon warns. “Because tar sands projects are so capital intensive, take a long time to build, and produce for many decades, investors need to feel confident that oil prices are going to be sustained at high enough levels to make massive up-front capital expenditures worth it. This isn’t the picture that they see right now,” with U.S. shale production keeping prices stable around $55 per barrel, and the combination of climate action, electric vehicle growth, broader clean technology development, and the push for cleaner air in Europe and Asia “poised to radically change the oil market forever.”

“The political and economic ramifications of no new growth in the sector should not be overlooked because of a misplaced faith in rising oil prices,” the briefing note states. “By recognizing the current conditions, political decision-makers and industry have an opportunity to prepare and manage the no-new-growth scenario such that it minimizes impacts on communities, jobs, and provincial and federal budgets.”

In an unrelated report earlier this week, analysts at GMP FirstEnergy warned that spending increases announced by Canadian fossils in late 2016 and early 2017 are at risk, with oil prices mired below $50 per barrel. Citing “significant degradation” in exploration and production cash flows in the first half of this year, analysts Ian Gillies and Kory Cross stated that “if current depressed commodity prices remain into the future, we believe it is very likely that customer capex programs for the second half of 2017 and 2018 [will be] reduced or deferred.”

They report that Canada’s projected rig count for 2018 could fall from 7,850 to about 5,000 wells.



in Energy / Carbon Pricing & Economics

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

Ken Teegardin www.SeniorLiving.Org/flickr
Clean Electricity Grid

Virtual Power Plants Hit an ‘Inflection Point’

January 31, 2023
117
EcoAnalytics
Media, Messaging, & Public Opinion

Albertans Want a Just Transition, Despite Premier’s Grumbling

January 23, 2023
322
Climate Denial & Greenwashing

Exxon Had the Right Global Warming Numbers Through Decades of Denial: Study

January 17, 2023
229

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

Mike Mozart/Flickr

BP Predicts Faster Oil and Gas Decline as Clean Energy Spending Hits $1.1T in 2022

January 31, 2023
316
Gina Dittmer/PublicDomainPictures

Canada Needs Oil and Gas Emissions Cap to Hit 2030 Goal: NZAB

January 31, 2023
192
Doc Searls/Twitter

Guilbeault Could Intervene on Ontario Greenbelt Development

January 31, 2023
130
Ken Teegardin www.SeniorLiving.Org/flickr

Virtual Power Plants Hit an ‘Inflection Point’

January 31, 2023
117
RL0919/wikimedia commons

Danske Bank Quits New Fossil Fuel Financing

January 23, 2023
2.4k
/snappy goat

Rainforest Carbon Credits from World’s Biggest Provider are ‘Largely Worthless’, Investigation Finds

January 31, 2023
92

Recent Posts

CONFENIAE

Ecuador’s Amazon Drilling Plan Shows Need for Fossil Non-Proliferation Treaty

January 31, 2023
59
Victorgrigas/wikimedia commons

World Bank Climate Reforms Too ‘Timid and Slow,’ Critics Warn

January 31, 2023
42
United Nations

Salvage of $20B ‘Floating Time Bomb’ Delayed by Rising Cost of Oil Tankers

January 27, 2023
120
@tongbingxue/Twitter

Extreme Warming Ahead Even as Worst-Case Scenarios Grow ‘Obsolete’

January 23, 2023
340
Rachel Notley/Facebook

Notley Scorches Federal Just Transition Bill as Fossil CEO Calls for Oilsands Boom

January 23, 2023
313
EcoAnalytics

Albertans Want a Just Transition, Despite Premier’s Grumbling

January 23, 2023
322
Next Post

Climate refugees will search hard for homes

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}