Canada''s oil sands giant Suncor slashes spending
January 21, 2009
Suncor Energy Inc., Canada''s second-largest oil sands operator, slashed its planned 2009 spending in half and shelved major expansion projects with crude prices in free fall. The Calgary-based company said it plans to spend $3 billion Canadian, with just a third of that going toward growth projects, as reported by the Associated Press. It was the second time Suncor has scaled back projects in recent months. In October, the company slashed its planned capital expenditures from between $9 billion Canadian and $10 billion to $6 billion Canadian. Alberta''s once booming oil sands sector has cooled as major producers from Europe to North American pull back spending. It is extraordinarily expensive to extract crude from sand, making it less profitable to do so with even benchmark crude beginning to fill storage facilities. Industry officials estimate northern Alberta could yield as much as 175 billion barrels of oil, making Canada second only to Saudi Arabia in crude oil reserves. President Barack Obama has criticized America''s dependence on Middle East oil. Canada''s oil sands projects would help, but a top Obama adviser said during the campaign said last year that greenhouse gas emissions from converting the sands into oil are unacceptably high and may run counter to Obama''s plan to shift the U.S. away from carbon-intensive fossil fuels. Enormous amounts of energy and water are needed to extract the oil from the sand.