Norwegian oil giant Statoil is halting a Canadian oil sands project partly because of limited pipelines.
Shelving the proposed multibillion-dollar Corner oil sands project in Alberta, Canada, for three years will cost 70 people their jobs, Statoil Canada said.
“Costs for labor and materials have continued to rise in recent years and are working against the economics of new projects,” said Statoil Canada country manager Ståle Tungesvik. “Market access issues also play a role — including limited pipeline access which weighs on prices for Alberta oil, squeezing margins and making it difficult for sustainable financial returns.”
Lack of pipeline infrastructure has plagued development of Canada’s oil sands, a thick, carbon-dense type of crude that Canadian Prime Minister Stephen Harper’s government views as a crucial driver of economic growth.
But protests from environmental groups, ranchers and indigenous communities in both Canada and the United States have impeded construction of new pipelines, the most notable being the proposed Keystone XL project.
The Canada-to-Texas pipeline has been in administrative limbo in the U.S. for six years as builder TransCanada Corporation awaits a needed cross-border permit. The Obama administration has stopped its review of the application until the Nebraska Supreme Court rules on the legality of the pipeline route.
