A sticky ending for the tar sands ?

[OrangeCounty]

Is the situation in Alberta as bad as what is is portrayed in this article ?

http://www.economist.com/world/americas/displaystory.cfm?story_id=12932252

 

[BCguy]

Probably

 

[adnan_hsn]

From oil trading at such a low price due to the global slowdown in demand, it's not surprising to see that happening. The cost of extracting oil out of the oil sands in extremely cold environments like Alberta is very high so the global oil prices HAVE to be on a certain level to allow returns on investment for any company who operates in Canadian oil fields. Recently due to the low prices those companies have suffered losses in their ongoing projects and also by not making any significant new wins due to decreased govt: spending in the sector. Its is anticipated that companies will keep laying off employees for some time which will cause a decline in consumer spending and (along with other reasons) will result in cooling off of Alberta's economy and consequently, Canadian economy in general. This article doesn't really mention other companies alongside EnCana but from working in the industry I can tell that the situation is much worse.

We hope some miracle happens and the world economy makes some recovery by 2010. And I hope this in no way gets tied to USA and UK as according to some "if Australia, some European countries and Canada have years of recession ahead of them, USA and UK may have decades". Well, that's what happens when you blindly build your economy on credit and give a false inpression of growth.

 

[eduardoF]

It's bad. Oil prices are down (companies make less money per barrel), demand is also down (companies are selling less barrels).
Extracting oil from tar sands is difficult, environmentally problematic, and quite expensive. Unless the price of oil nearly doubles, it's not very profitable. And since the oil isn't going anywhere, the companies can simply (ok, not so simply) shut down and wait.

 

[newcomer]

Calgary flourishes when Iraq suffers

This was the headline of the article which i read almost one n a half years back in a leading GCC newspaper which stated tht as the oil sands of Alberta need a lot of expenses for extracting oil and due to adverse situation in Iraq n other problems in oil producing countries such as Nigeria ,the oil prices ve gone up so now its possible for Albertans to extract their oil from oil sands.

But now as we all know oil prices ve fallen as little as under 40$ ,so its not possible for Albertans to continue the operations so definitely when oil prices ll go up(may be in future)they ll be able to continue the operations.But definitely situation ll improve when there s improvement in global economy.