Since oil prices collapsed, ‘the economics have just turned against it entirely,’ one economist said.
The long-term future of Canada’s tar sands suffered a blow Thursday when TransCanada announced it would cancel a major pipeline project. The decision on the line, which could have carried 1.1 million barrels of crude from Alberta to the Atlantic coast, sets back efforts by energy companies to send more of the oil overseas.
The Energy East project had slumped through three years of regulatory review. Over that period, the price of oil collapsed, dragging down the prospects for growth in production in the tar sands, which is among the most expensive and carbon-intensive sources of oil.
In a statement, TransCanada said that the decision came after a “careful review of changed circumstances.” The company said it expects to write down an estimated $800 million after-tax loss in its fourth quarter results.
Simon Dyer, Alberta director for the Pembina Institute, a Canadian environmental research group, said darkening prospects for the oil sands doomed the pipeline.
“There does not appear to be a business case for the project,” he said in an email.
Inside Climate News – Nicholas Kusnetz – 10.05.2017
Posted by Nelson Bailey