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Oil Prices, Jittery Markets Slow Oil Sands Project

Judy Fahys/KUER
U.S. Oil Sands still plans to begin operating the first U.S. tar sands mine on 317 acres in eastern Utah, but this mine will be cleaner and more economical than those in Canada because of an innovative process, the company says.

Money issues have prompted a temporary slowdown of work in eastern Utah on the first tar sands mine in the U.S.

Calgary-based U.S. Oil Sands announced Thursdaythat it’s slowing down construction -- partly because of low oil prices and partly to line up more funding for its $60 million project. The mine’s 85 percent complete, but oil prices dipped below $30 a barrel last month.

“If we were to start up with prices at these levels, we wouldn’t be able to be profitable,” says Barclay Cuthbert, the company’s vice president of operations. “But forecasts we see show oil prices are expected to recover later on in the year, so we’re going to try to time our startup to better prices so that we’re better off economically.

U.S. Oil Sands wants its pilot project in Uintah County to demonstrate how it can separate crude oil from the porous rock with a solvent made of citrus peels that leaves the surrounding land and water clean.

Cuthbert says U-S Oil Sands remains confident its process is viable environmentally and commercially.

“It’s a bit of a setback,” he says. “But we’re still very enthusiastic and optimistic about our future.”

Environmentalists have fought the project because of its proximity to three Colorado River tributaries. They also want to see an end to fossil fuel development because of climate change.

Judy Fahys has reported in Utah for two decades, covering politics, government and business before taking on environmental issues. She loves covering Utah, where petroleum-pipeline spills, the nation’s radioactive legacy and other types of pollution provide endless fodder for stories. Previously, she worked for the Salt Lake Tribune in Utah, and reported on the nation’s capital for States News Service and the Scripps League newspaper chain. She is a longtime member of the Society of Environmental Journalists and Investigative Reporters and Editors. She also spent an academic year as a research fellow in the Knight Science Journalism program at the Massachusetts Institute of Technology. In her spare time, she enjoys being out in the environment, especially hiking, gardening and watercolor painting.
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