Oil Sands Output Growth Second Only To Shale

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Canada’s Mordor, as environmentalists like to call the oil sands, is notorious for how “dirty” oil extraction is there. It’s also notorious for how expensive it is to extract. The dirt argument, which concerns the energy intensity of oil sands production compared to other oil extraction methods, has been partially refuted: some oil production in California is dirtier than oil sands. The price argument is also being refuted by the producers themselves: oil sands extraction is becoming cheaper, and it is rising.

Oil sands production has historically had some of the highest production prices in the industry due to the complexity of the process that turns bitumen into fluid crude oil. Like their peers in the shale patch, however, oil sands miners were motivated to increase their efficiency during the recent price crash. The results from this boost are now becoming evident.

Earlier this week, the Canadian Association of Petroleum Producers reported a forecast that the industry will reduce its spending for the third year in a row in 2017—to US$11.3 billion (C$15 billion). This is compared to US$25.6 billion (C$34 billion) spent in 2014…

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