Oil Prices, Jittery Markets Slow Oil Sands Project
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 Thursday that 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.”