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Oil Change: North America’s oil industry is downsizing
By Alan Septoff
Monday, February 08, 2010
Lorne Stockman over at Oil Change is at it again. This time he’s connecting the dots of recent media stories showing that the oil industry is realizing that demand has peaked in the United States… and tar sands investments are looking riskier all the time.
You should read the whole post, but here are some highlights:
“[T]he uncertain future for tar sands was brought more sharply into focus when it emerged that Suncor and Imperial Oil (60% owned by Exxon) are appealing to a US regulator to force Enbridge to hold back on increasing pipeline tolls from Canada because they say Enbridge is building too much pipeline capacity for tar sands oil into the US.
and
The problem as the oil producers see it, is that since they signed up for [the Alberta Clipper tar sands oil pipeline] back in 2007, the outlook for tar sands has deteriorated sharply and they are unsure how much tar sands crude they will have available to pump through Enbridge’s new line. The contract between Enbridge and oil producers guarantees Enbridge revenue making it more expensive for oil producers to use only a portion of their allotted capacity.
and
TransCanada’s Keystone XL pipeline proposal, which is slated to bring 500,000 b/d of tar sands crude to the Gulf Coast by 2013, will result in around 41% excess capacity in Canada-US pipeline systems, according to the G&M article. That means that on top of paying some of the most expensive capital costs in the oil industry to pull tar sands crude out of the ground, producers will be paying a premium to get it to refineries, while refineries will be paying the extra costs of processing the heavy sour crude into products that are decreasingly in demand. Sounds like the party’s over to me.”
Tagged with: alberta clipper, pipeline, enbridge, keystone xl, suncor, transcanada, peak oil, imperial, oil change international
