Environmental Economics

he can approve it all he wants, it ain’t gonna get built…as i wrote a few weeks ago, “it seems certain that oil prices at these levels make it extremely unlikely that Transcanada can continue to pursue the Keystone XL pipeline, simply because oil sands expansion is out of the question at these price levels…because they have to burn one barrel of oil to extract three, the breakeven cost for extracting oil from Canada’s tar sands is much higher than most other places around the world; most figures i’ve seen indicate they need $50 US oil prices just to operate the extraction facilities now in existence, without any expansion…Keystone was originally proposed at a time when oil prices were twice what they are now., but 64 of the tar sands projects that were on the drawing board when oil prices first started falling have since been cancelled, with many of of the oil companies involved taking large losses, so the oil that was to fill the Keystone will no longer be there if the pipeline were to be completed…about a year ago, IHS estimated that a new greenfield oil sands mine (without an upgrader) required a WTI price between $85 to $95 per barrel on average to breakeven…a month ago, petrogeologist and oil analyst Art Berman at oilprice.com also showed that it would take at least $85 oil prices for 10 years to develop enough new oil sand projects to fill the Keystone XL…furthermore, there are already two massive Canadian tar sands pipeline projects already approved, which would ship any new dilbit production to the west coast and to the east…the major oil companies see the writing on the wall; just this week, Shell decided to divest nearly all of its Canadian oil sands interests in exchange for $7.25 billion, and Marathon announced an agreement to sell its Canadian subsidiary, including their interest in the Athabasca Oil Sands, and use the proceeds to buy Permian basin assets in Texas…all the deep pocketed major oil companies are getting out of the oil sands, and the small companies left with an interest there do not have the capital wherewithal to expand…”
links for all that are here: http://focusonfracking.blogspot.com/2017/03/oil-price-breaks-as-crude-supplies-hit.html