For the first time, a new report from the Institute for Energy Economics and Financial Analysis (IEEFA) and Oil Change International has quantified the financial and carbon impact of public opposition to pipelines and other expanded investment in oilsands production. The report, ‘Material Risks: How Public Accountability Is Slowing Tar Sands Development,’ includes market analysis and industry data to support its estimates on lost sales revenues to the oilsands industry as public opposition creates delays and project cancellations. The new report also describes other market forces that are putting oilsands developers at increasing disadvantages.
The report puts losses for oilsands development at US$ 30.9 billion between 2010 and 2013, in part from the changing North American oil market but largely due to intense movements against the development of the oilsands. The report attributes 55% of the lost revenue to citizen protests against pipelines and oilsands.
Tom Sanzillo, Director of Finance, IEEFA said, ‘tar sands producers face a new kind of risk from growing public opposition. This opposition has achieved a permanent presence as public sentiment evolves and as the influence of organisations opposed to tar sands production grows. They have a deep reservoir of committed talent from all walks of life: High profile billionaires and regular workaday folks. It’s a group that is very well schooled in the use of public accountability tools, and a group that is right also in its criticism of the questionable finances behind tar sands development.’
Steve Kretzmann, Executive Director, Oil Change International said, ‘industry officials never anticipated the level and intensity of public opposition to their massive build out plans. Public opposition has caused government and its administrative agencies to take a second and third look. Legal and other challenges are raising new issues related to environmental protection, indigenous rights and the disruptive impact of new pipeline proposals. Protests against pipelines are keeping carbon in the ground, and changing the bottom line for the tar sands industry. Business as usual for Big Oil, particularly in the tar sands, is over.’
This year alone, market forces as well as opposition from the general public has caused the cancellation of three major oilsands projects that would have produced 4.7 billion bbls of bitumen. The projects are Shell’s Pierre River, Total’s Joslyn North and Statoil’s Corner Project.
Between 2010 and 2013 oilsands producers lost US$ 30.9 billion because of transportation bottlenecks and the flood of crude coming from shale oil. Of that, US$ 17.1 billion can be attributed to public campaigns.
The combination of risks facing the oilsands sector has the potential to cancel most or even all of the planned expansion of the industry in Canada.
Rather than seeing more than a doubling of output from 2 million bpd to 4.8 million bpd, as predicted by the industry. Due to public intervention, the report projects flat oilsands production.
Oilsands producers have lagged as nine out of 10 in Canada are underperforming in the broader stock market in the last five years.
Edited from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/the-environment/29102014/public-protests-and-oilsands/