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Wed Mar 18, 2020, 09:35 AM

Teck's Tar Sands Cancellation Came For The Simplest, Deadliest Reason - It Would Lose Lots Of Money

The abrupt decision by Teck Resources to withdraw its application for the Frontier bitumen mine project reveals a truth that politicians like Jason Kenney and other industry boosters continue to deny — that investing large sums of money in Canada’s oilsands no longer makes any financial sense.

“I think it’s a huge market signal for the oilsands,” said Kathy Hipple, an analyst with the New York-based Institute for Energy Economics and Financial Analysis. “There’s a very real risk of stranded assets for oilsands projects and there’s a huge risk even for other oil and gas projects going forward, they’re not needed.”

Instead of acknowledging that risk, however, Alberta’s political leaders are reacting to Teck’s decision with shock and anger. “It’s going to be real blow to the region,” Fort McMurray Mayor Don Scott told the Calgary Herald. “It was going to be a catalyst for the future.” Kenney meanwhile is blaming the federal Liberals. “We did our part, but the federal government’s inability to convey a clear or unified position let us, and Teck, down,” the Alberta premier said in a statement.

Yet the financial barriers to building a new oilsands mine twice the size of Vancouver during a climate emergency were simply insurmountable for Teck and will likely be difficult for any company in the future to overcome. Teck could not justify spending $20.6 billion on a project that requires oil prices above $95 per barrel to be profitable — a price even companies like BP, Shell and Total see as unrealistic. The four to six megatons of carbon emissions Frontier would have emitted annually until the 2060s would have been a huge financial liability at a time when Wall Street giants like BlackRock and other investors are cutting ties to high-carbon fossil fuels.



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