As expected, investment in Alberta Tar Sand (what the industry likes to refer to as "oil sands") developments are being cut back a bit; but tar sands developers still expect to remain profitable, even if oil hits US$60/barrel.
Suncor Energy Inc., which last week rolled out massive spending cuts because of the credit crisis and slumping oil prices, said it will earn C$28 for every barrel of oil it produces should crude trade at US$60/barrel and Canadian dollar hover around US78 cents.Via:Financial Post, Oil sands still viable at US$60 a barrel: Suncor So, tar patch boys will survive the credit crunch. However, it appears that the real business opportunity for them comes after Peak Oil gets serious, and prices spike.
Rick George, the Suncor's chief executive is quoted as saying:
"The advantage that we have in the oil sands business on that is no decline curves – and you're going to see some big decline curves, I believe, worldwide – and no exploration costs."
No mention of climate change, of course. Making a business investment contingent on climate action is still, apparently, a non-starter for the North American business class.
Alberta Tar Sands Gridlocked In The Pit Of Chinese Oil Demand Collapse
Given the precipitous fall in oil prices seen over the last three weeks, tightly coupled with greatlly reduced worldwide demand for oil - all of which is linked to a global credit crisis originating in USA - there should no longer be any doubt that the preceding run up in prices to over US$100/barrel was principally a matter of demand growth in China and India (where demand growth was highest).
Image credit:TotalPDA, Traffic Jam
Tip of the tip hat to Dr. B.
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