Why It Matters That Statoil Just Shelved Its Multi-Billion-Dollar Tar Sands Project
by Emily Atkin, Think Progress
September 26, 2014 at 2:19 pm
Statoil is putting the project on hold for a few reasons, but the most notable is the company’s assertion that there is “limited pipeline access” for the oil. In other words, Statoil is not sure there is enough pipeline capacity for it to actually get the oil out of northern Canada. According to Reuters, Statoil is the first company to explicitly cite pipeline access as a reason for delaying or cancelling a project.
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The momentum surrounding opposition to Keystone XL has done more than just delay the one pipeline – it’s made companies extremely wary of pursuing pipeline projects that cross the border to bring Canadian tar sands oil into the United States. According to Leach, that broader fact is now making some companies rethink tar sands production projects.
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Because of Statoil’s postponement, some have called into question the accuracy of the State Department’s claim that building Keystone XL would not impact global greenhouse gas emissions, because the oil produced in Canada would get to market anyway. But as Leach points out, the State Department’s assessment only looked at the 800,000 daily barrels of oil that would be produced by Keystone – not the ripple effect approval might have on other cross-border pipeline projects.
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Another reason Statoil may have put its project on the shelf is because of its shareholders. Unlike most Canadian-based oil companies, stockholders of the Norwegian energy company have put a decent amount of pressure on the company to make environmentally-friendly investments.“Statoil has been under a lot of pressure at home in terms of their oil sands investments,” Leach said. “For them, building a new oil sands project is going to be difficult given the opposition … They won’t be able to push ahead if it’s even slightly risky.”
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