Tar sands investors threatened by uncertain oil prices, says new report

Intro

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.

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RT @MikeHudema 90% of future #oilsands projects at risk from eroding oil price: pic.twitter.com/aYEPebkbUG

Key Points

  • 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.
  • 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.

 

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