A Canadian company’s efforts to produce oil sands in the United States are not dead, but thanks to crude oil prices that have dipped below $30 per barrel, they may be in critical condition.
U.S. Oil Sands, the Alberta-based company working on a project slated to produce crude oil from oil sands on public lands in Utah, is slowing its PR Spring oil sands project to nearly a halt amid a lack of labor and low oil prices.
“We’re just slowing the project down to focus on critical path items,” U.S. Oil Sands President and CFO Glen Snarr said. A contractor providing most of the project’s labor decided to close its operations in Utah, leaving U.S. Oil Sands without many of its workers, he said.
“Our focus is to reduce manpower at the site,” he said.
Oil sands, known as tar sands in the U.S., are a thick and clay-like substance composed of a hydrocarbon called bitumen. Found mostly in eastern Alberta, Canada, tar sands’ climate impacts are significant. Oil production from tar sands is about 17 percent more carbon intensive than production of an average barrel of oil.
In November, citing climate concerns, the Obama administration killed the proposed Keystone XL Pipeline, which was slated to pipe tar sands bitumen from Canada to refineries in Texas. Last June, a group of 100 scientists called for a moratorium on tar sands development in Canada, saying it is incompatible with meeting greenhouse gas reductions targets.
Tar sands are rare in the U.S., but companies have been trying for decades to produce tar sands oil in eastern Utah, where the country’s largest deposits are locked deep beneath the desert. With oil prices dropping to below $30 per barrel, however, the outlook for U.S. Tar Sands’ operations is uncertain.
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