BP back in the tar sands business - December 06, 2007
Oil giant BP is moving back into tar sands in Canada (press release). While others have been hard at work on this fossil fuel source, BP abandoned it as uneconomic nearly a decade ago.
Now the company’s new deal with existing player, Canada-based oil company Husky Energy, is worrying environmentalists who have already been protesting the development of tar sands. Even before this announcement, Greenpeace was banging on about Canadian tar sands being dirty, bad for wildlife and generally energy inefficient and calling for them to close.
Chances of a scale back in tar sands work would seem even slighter now BP is on board. This latest hook up is, says Greenpeace, “very disappointing” (Times).
Key to the BP-Husky deal is the Sunrise oil sands field owned by Husky. This is expected by BP and Husky to be sanctioned in 2008 and to eventually produce 200,000 barrels of oil a day when it gets up to speed.
Despite environmental concerns, Canada’s markets seem happy. Stocks rose for the first time in three days on the news (Bloomberg). The deal could be worth over $10 billion say some sources, although officially it’s set at about $5 billion.
We’re probably going to see more and more of this kind of thing. If ‘normal’ crude oil is getting expensive / scarce sources like the tar sands are going to look more and more appealing...
UPDATE
Another avenue for ‘new’ fossil fuels is to make more use of the ones we’ve already found. As prices increase it is becoming more attractive to keep previously uneconomic fields going. To prevent ‘premature decommissioning’ in the North Sea, the UK’s government has given a tax break for companies keeping their field running (full story at the Guardian).
For the long view, see Nature’s news feature from January - Energy: That's oil, folks (subscription required).
Image: an oil refinery / Getty