Canada’s oil sands threatened by spiralling costs – report
A private government memorandum obtained by Canada’s CBC shows that Alberta’s oil sands, one of the country’s key economy engines, could soon get stalled due to mounting developing costs and labour shortages.
The sector, which provides Canadians with thousands of jobs and generates billions of dollars a year, is in trouble despite the recently forecasted $364 billion investment expected in the sector over the next two decades.
According to a Conference Board of Canada’s report released Wednesday, the development of the country’s oil sands deposits is one of the largest development projects in the nation’s history.
“It is so large that it will rival massive public works projects in scale, such as the building of the Interstate Highway System in the United States,” says the report.
But CBC News, which obtained the April memo from a high-ranking official within Canada's Department of Natural Resources, is reporting that investors may find future returns not as spectacular as promised.
Canadian oil sand production is a key piece on the ongoing discussion about United States energy independence, including a plan favoured by Republican presidential candidate Mitt Romney.
Ottawa is currently reviewing a debated proposal by Chinese state-run oil company CNOOC to acquire Alberta-based Nexen in a deal valued at about $15.2 billion.