An interesting news item this past week concerning Royal Shell’s Athabasca Valley oil sands project. I spoke about the Athabasca tar sands in my January 20 post (here).

As reported by the Financial Times and in its lengthy Q & A session with Royal Dutch Shell chief executive Peter Voser, that company’s planned expansion of its existing tar sands project has been “clearly scaled down.” The previously-planned quintupling of growth (in stages) from the Athabasca project will now proceed “very much slower”.

At current trading prices, the profit margin is apparently too thin for Royal Dutch Shell to proceed. The Times referenced the development project as being a “costly distraction” for Royal Dutch Shell, and an increase to an eventual 255,000 barrels of oil per day is about all that can now be expected, rather than the 770,000 barrels per day originally envisioned by the expansion.

It’s hard to see this as anything but a blow to those who continue to claim that these tar sands and oil shale are the key, great solutions to the continuing decline in the availability of conventional oil resources worldwide. Merely mentioning “trillions of barrels of oil” underground doesn’t get it from there to here for free, or easily, or quickly—if at all.

Sources:

http://www.investorschronicle.co.uk/Companies/ByEvent/TradingNews/Analysis/article/20100127/5c1d623a-0b44-11df-8109-00144f2af8e8/Shell-forced-into-oil-sands-Uturn.jsp – Shell forced into oil sands U-turn. Created: 27 January 2010 Updated: 28 January 2010 Written by: Daniel O’Sullivan

http://blogs.ft.com/energy-source/2010/01/26/shells-ceo-peter-voser-interview-transcript-on-canadas-oil-sands-jobs-acquisitions-us-gas-iraq-nigeria-copenhagen-and-more/  – Shell’s CEO Peter Voser interview transcript: on Canada’s oil sands, jobs, acquisitions, US gas, Iraq, Nigeria, Copenhagen and more.  January 26, 2010 by Ed Crook