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Carbon price won’t affect oilsands plans if oil price tops $60: report

TD Bank economist Dina Ignjatovic said $60/barrel is the estimated minimum price oilsands companies need to go ahead with their projects


 
The Suncor oil sands facility seen from a helicopter near Fort McMurray, Alta. (Jeff McIntosh/CP)

The Suncor oil sands facility seen from a helicopter near Fort McMurray, Alta. (Jeff McIntosh/CP)

CALGARY – A new report says putting a price on carbon won’t likely affect oilsands development plans if the price of oil rises above US$60 a barrel.

TD Bank economist Dina Ignjatovic said that’s the estimated minimum price oilsands companies need to go ahead with their projects, and if it’s reached then the extra cost of a carbon tax likely won’t sway a decision.

If the price of oil stays below US$60 a barrel then the picture becomes murkier, said Ignjatovic, as advances in productivity and cost reduction would also need to be achieved and factored into any decision.

Ignjatovic noted that Alberta’s proposed carbon tax system would reward low-emissions oilsands producers and penalize high-emission projects, with Alberta Environment and Parks estimating most projects would see costs per barrel getting between 50 cents cheaper and 75 cents more expensive with carbon pricing.

The announcement of a federally-mandated carbon tax brings more uncertainty, since it pushes the price of carbon higher than what Alberta’s proposing by 2021, said Ignjatovic.

But even still, she said if the structure of the province’s carbon tax is followed, it shouldn’t be a driving force in rejecting a project, with the price of oil, more pipelines and greater efficiencies the key factors for project approval.


 
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Carbon price won’t affect oilsands plans if oil price tops $60: report

  1. Well they just discovered 20 billion barrels in Texas the other day

    • All in shale so it will have to be fracked. Here come the earth quakes. Gosh I am glad that Obama is such an environmentalist and he has people like Leo DiCaprio and Justin Trudeau in his camp. Otherwise, how would America maintain its spot as the world’s largest oil producer? Good thing Canada is getting out of the business. That 1.3 percent that we contribute to global emissions is really going to stop the warming trend while America fracks on.

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