Efforts to stop the Keystone Pipeline maybe closer to success than we realize -- regardless of what the Obama administration does or the industry says. The cost of the pipeline is rising and the profit margin is falling. This resulted in France's Total selling its 49% ownership in the Canadian oil sands to the Canadian energy company, Suncor, for a $1.65 billion loss. The executives of Total said that further investment in the project could not be justified because of rising costs and decreasing profit margins.
This decision should encourage Tar Sands Blockaders everywhere. There is no question our work for Climate Justice is making this project more costly, less profitable and providing bad media exposure for those who will profit from the project. Profitting at the cost of going over the tipping point for climate change is not where any business will want to be as climate disasters mount and the public gets angry.
Let the corporations that profit from dirty extraction fuels know that Climate Justice advocates will seek to hold liable corporations that are profiting at the expense of the planet. When there are disasters caused by climate change in the future, our fingers will be pointed at those corporations that are the cause of climate change -- especially those that pushed the planet over the tipping point.
Corporate boards should wake up and realize that scientists have said that the Alberta Tar Sands could push the Earth over the edge on climate change. The climate disasters that will result will cost hundreds of billions of dollars. Shouldn't corporations who know their product will have this effect be held liable? Climate Justice advocates will be in a strong position to make that argument.
Below is more on the sale of Total's investment.
A Canadian Oil Sands Project Was Just Dumped At An Enormous $1.65 Billion Loss
Jen Alic, OilPrice.com | Mar. 31, 2013
Originally published in Business Insider
France’s Total SA (NYSE: TOT) will sell its 49% stake in its Canadian oil sands project to Suncor Energy Inc. for $500 million, netting the French oil giant a $1.65 billion loss on the beleaguered project.
Total would have had to spend another $5 billion (at least) on the Alberta oil sands Voyageur Upgrader project over the next five years—an investment that cannot be justified according to its executives.
The project is beleaguered by increasing labor costs, a shortage of labor and the falling prices of Canadian heavy crude against rising US oil production. Profit margins have narrowed to the extent that the project is no longer economically feasible.
The sale to Canada’s Suncor (NYSE: SU)—from which Total purchased the project in 2010–and the resulting loss hasn’t affected Total shares to any significant extent as of the time of writing. These net losses won’t be reflected until Total releases its first quarter 2013 results.
Not only does the Total divestiture raise questions about the long-term viability of Canadian oil sands investments, it also raises questions about whether the controversial Keystone XL pipeline project is really in the US’ interests—at a time when US oil output is rising and Canada’s oil sands are becoming less strategically advantageous.
Total is still hanging on to two other oil sands projects in Canada—at Fort Hills and Joslyn—and for now there is no talk of divesting, but later this year Total will make a final decision on its Fort Hills investment, according to Bloomberg.