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What happens to the tar sands over the next year or two will tell a lot.
The fact that a lot of the deep offshore development is moving very slowly if at all as shown that even with current prices their seems to be a cost that above what oil companies are willing to spend.
I think at the end of the day the key problem is you have to pay millions and even billions upfront for a very long term payout. I suspect the tar sands esp given enviromental/NG/Water/Cost issues are either barely profitable or losing money now.
One scenario that will get people out of the tar sand quick is if a company drops out or slows production and get hit with a environmental cleanup bill. The large ponds of waste are a ticking time bomb.
I suspect the plan is to let the companies doing the extraction go bankrupt instead of paying for cleanup.
So my prediction is environmental concerns will shut down the tar sands probably after a major accident and soon.
In their 3rd quarter earnings conference call this morning, Schlumberger said that the problem is a lack of rigs. They expected that shortage to continue constraining production for the foreseeable future.
They said there is plenty of equipment, etc. for pressure pumping of natural gas--but producers were abandoning production because current prices don't justify the increasing costs. The rapid decline rates should lead to increased prices and extraction in the future, but Schlumberger said they didn't see a bottom yet.
So I expect we'll see a lot of pressure for continuing tar sands production for the intermediate term.
The cost will shut it down.
Here:
http://www.polarisinstitute.org/deh_cho_leader_calls_for_tar_sands_morat...
and then Higher Royalties figured in. And Canadians to the East wondering why they have an energy problem while NatGas is
poured into making US cars run and US/Mexican factories
humm.
Arkansaw of Samuel L Clemens