February 23, 2016 – Inside Climate News
With Some Tar Sands Oil Selling at a Loss, Why Is Production Still Rising?
By: Phil McKenna
Canadian oil producers can’t address the downturn by slowing production without huge losses, so they now sell at a loss economically and for the climate.
Like a supertanker unable to make quick turns, production from tar sands in the Canadian oil patch continues to increase despite prices so low producers have to sell their output at a loss.
The industry's inability to cut production could have a profound impact on the climate as well as corporate bottom lines. Despite reductions in greenhouse gas emissions across Canada, continued tar sands oil production will most likely keep the nation from meeting targets it set as part of the international climate accord agreed to in Paris.
Energy-intensive tar sands production in Canada that requires steam to liquefy and extract the oil is expected to increase by 9 percent in 2016, according to the Canadian National Energy Board. Yet the oil currently sells for less than the cost of production when transportation costs are figured in, according to a detailed analysis by RBN Energy LLC, an industry consulting firm.
Read the full article here: http://insideclimatenews.org/news/23022016/tar-sands-becoming-worthless-production-rises-even-prices-plummet
