Staking Canada’s future on continued tar sands development is a risky bet, according to a new report by the UK-based Carbon Tracker Initiative. According to the group’s research, 90 per cent of future oil sands projects are at risk from eroding oil prices. This means that investors in Canada’s tar sands risk wasting $271 billion on projects that depend on consistently high oil prices costing more than $95 per barrel to create returns. The release comes as global oil prices have taken a nosedive, with crude being sold for below the symbolic $80-a-barrel threshold, a two-year low. As major companies are starting to shelve existing tar sands projects, the financial risks of putting money into newer projects sounds another alarm for investors to move away from Canada’s dangerous oil extraction industry, which is accelerating climate change, destroying huge swaths of pristine forests, and imperiling waterways from coast to coast.
- Investors have billions of dollars at stake in an eroding oil industry. 90 per cent of future tar sands projects are at risk to eroding oil prices, and shareholders in the Canadian tar sands industry could find themselves wasting $271 billion on an already shaky industry. Barrels would need to cost more than $95 each in order for investors to turn a profit, according to Carbon Tracker.
- Tar sands put communities and the environment at risk. Many communities live in proximity of Alberta’s tar sands and pipeline routes, leaving them vulnerable to oil spills. The size and destructive capability producing oil from the tar sands will accelerate climate change, destroy huge swaths of pristine forests, and imperil waterways from coast to coast.
- Investments should be directed toward reliable projects that can power our society, drive the economy and give us cleaner air. Moving away from fossil fuel-based energy to renewables will result in a wide range of benefits – including creating more jobs and improving public health. According to the IPCC, creating an energy sector that will contain global warming to the international redline of 2 degrees Celsius will require shifting $30 billion each year globally out of fossil fuels and channeling $147 billion of investment into low carbon electricity and $100 billion into energy efficiency annually.
- The Keystone XL pipeline would create just 35 permanent jobs and bring massive environmental and economic risk to the US. According to the US State Department, building a pipeline connecting Canada’s tar sands to ports that will ship the oil to foreign markets would result in just 35 permanent jobs while driving climate change and destroying huge swaths of forests.
- Oil price slump exposes Canada’s tar sands risk – report (RTCC)
- Saudi Price Cut Upends Oil Market (WSJ)
- Canadian Oil Sands profit falls on forex loss, lower oil prices (Reuters)
- Canada’s oil sands feel heat of price drops (Gulf News)
- Oil-Price Plunge Gives New Ammo to Divestment Activists (Inside Climate News)
- Report: Oil Sands: Fact Sheets – Focus on future Canadian oil sands projects capex and production (Carbon Tracker)
- Press release: Nine out of ten barrels in undeveloped oil sands projects at risk from eroding oil price (Carbon Tracker)
- Blog: Worried About Falling Oil Prices? Divest and Re-Invest (Huffington Post)
- 2014-2050 potential future oil production by required market price (Carbon Tracker)
- RT @CarbonBubble #oilsands undeveloped projects needing prices of more than $95/bbl are unlikely to give investors a decent return http://tinyurl.com/nx54ca4
- RT @ESG_Comms New report from Carbon tracker says $271bn of capital at risk in Canadian Oil sands http://bit.ly/1ofzYbf
- RT @adrienneyuen Ninety percent of future oil sands projects at risk from eroding oil price: Carbon Tracker Initiative @CarbonBubble http://lnkd.in/dXxjnFT
- RT @dpcarrington Investors in Canadian #tarsands at high risk of wasting $271bn in next 10yrs, says @CarbonBubble