Tar Sands Resistance Blowing Huge Hole in Oil Industry’s Bottom Line: Report
Led in large part by the Keystone XL resistance effort, anti-tar sands campaigns have created numerous delays and cancelled projects which have successfully impacted the bottom line for Canadian oil producers and drilling companies.
“Lack of market access, caused in large part by public accountability actions driven by pipeline campaigns, has played a significant role in the cancellation of three major tar sands projects in 2014 alone: Shell’s Pierre River, Total’s Joslyn North, and Statoil’s Corner Project,” notes the report, which is the first in a series of collaborative papers on the tar sands industry to be published by the groups.
Further, the report notes that capital expenditure into tar sands projects are declining while 9 of 10 leading tar sands producers in Canada have underperformed in the broader stock market in the last five years. Meanwhile, financial analysts have recently downgraded their outlook for tar sands production, once estimated to be as much as 4.8 million barrels per days.
“Industry officials never anticipated the level and intensity of public opposition to their massive build-out plans,” said Steve Kretzmann, Executive Director of Oil Change International, in a press statement. “Public opposition has caused government and its administrative agencies to take a second and third look. Legal and other challenges are raising new issues related to environmental protection, indigenous rights and the disruptive impact of new pipeline proposals.”
As report co-author Hannah McKinnon notes, the point of the tar sands resistance campaign “is not to bankrupt the oil industry, it is to protect our climate, and anything that depends on it (i.e. everything), as well as support the front line communities that face the impacts of this industry every single day.”
However, she adds, “It just so happens that if your business model is predicated on rapid expansion of some of the world’s highest carbon oil, then having an impact on your bottom line is one way to keep carbon in the ground.”
Protests against pipelines is slowly tar sands development and thus “changing the bottom line for the tar sands industry,” Kretzmann adds. “Business as usual for Big Oil—particularly in the tar sands—is over.”