It’s official: Oil sands giant Suncor Energy Inc. has agreed to buy Petro-Canada for $19.3 billion, a record takeover that will create Canada’s largest energy company. Not that it will solve any of the malaise being felt in Alberta’s oil patch. The fundamental problem remains–oil sands are just too expensive at current crude oil prices, no matter how big you are. “In the end,” writes the Wall Street Journal‘s Keith Johnson today on the Environmental Capital blog, “Canada’s oil sands are at the fringe of oil production anyway: The combined company’s oil sands production represents less than 10% of Canada’s total crude production, which in turn accounts for only about 4% of global output. What’s important about Canadian production is that it represents a rare potential growth area among non-OPEC countries; places like Mexico, Russia, Norway, and Central Asia are all seeing steady declines in output.” What we need for an oil sands surge, Johnson adds, is $100 oil; don’t hold your breath.
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