Oil Sands Boom Dries Up in Alberta, Taking Thousands of Jobs With it

New York Times ^ | 12 October 2015 | Ian Austen

[Lorianne]

FORT McMURRAY, Alberta — At a camp for oil workers here, a collection of 16 three-story buildings that once housed 2,000 workers sits empty. A parking lot at a neighboring camp is now dotted with abandoned cars. With oil prices falling precipitously, capital-intensive projects rooted in the heavy crude mined from Alberta’s oil sands are losing money, contributing to the loss of about 35,000 energy industry jobs across the province.

Despite a severe economic downturn in a region whose growth once seemed limitless, many energy companies have too much invested in the oil sands to slow down or turn off the taps. In addition to the continued operation of existing plants, construction persists on projects that began before the price fell, largely because billions of dollars have already been spent on them. Oil sands projects are based on 40-year investment time frames, so their owners are being forced to wait out slumps.

“It really is tough right now,” said Greg Stringham, the vice president for markets and oil sands at the Canadian Association of Petroleum Producers, a trade group that generally speaks for the industry in Alberta. “We see kind of a lot of volatility over the next four or five years.”

After an extraordinary boom that attracted many of the world’s largest energy companies and about $200 billion worth of investments to oil sands development over the last 15 years, the industry is in a state of financial stasis, and navigating the decline has proved challenging. Pipeline plans that would create new export markets, including Keystone XL, have been hampered by environmental concerns and political opposition. The hazy outlook is creating turmoil in a province and a country that has become dependent on the energy business.

[ROCKLOBSTER]

I don’t think the Greens have anything to do with this.

The Green Hoard opposes construction projects involving Tar Sand oil, claiming it's "dirtier" (has more carbon)

[JediJones]

I think one article said the Saudis did the same thing some decades ago, driving up their output to drive prices down, and it took 30 years for our oil industry to recover from the hit. Our companies are not going to be willing to invest in domestic production even if prices rebound later when they live under the fear that the Saudis will simply do the same thing again and drive them out of business again. They’ll invest in something safer. We’re in full-tilt economic warfare with the Sauds. Chew some popcorn and await the outcome.

[Lorianne]

Yes but that is not why they are having financial trouble right now.