Alberta oil sands facing a new enemy

Financial crisis forces a corporate retreat from oil sands; billions of dollars of planned investment now on the shelf; Alberta government urged to rethink royalties; long-term impact on planned projects uncertain, but immediate impact is severe

Gary Park

For Petroleum News

Shifting sands The oil sands of Alberta are living proof of the old adage: The bigger they are the harder they fall. Even faster than they grew from a marginal resource to a key element in North America’s energy future, attracting capital spending estimates of C$317 billion over the next 22 years, the oil sands have gone into a tailspin, induced by the collapse of oil prices that did more damage in a few months than years of cost over-runs, shortages of construction labor and materials and the threat of harsh climate-change measures. Petroleum News’ Canadian correspondent Gary Park examines the fallout from a drastically revised oil sands agenda and the chances of a recovery in a two-part series.

Those who trumpeted the virtually unlimited commercial potential of Canada’s oil sands may have finally met their match after years of fending off skeptics and critics. Since production of tar-like bitumen made its debut 40 years ago, the deposits of more than 300 billion barrels that sprawl across....

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Dreams evaporated

Initial fallout severe

Long-term recovery expected

Growth will moderate

Project summary