The problem is that extracting oil from tar sands is difficult and costly. Prices need to be relatively high to make the extra effort profitable. For pipeline boosters, market conditions have turned gloomy as world oil prices have dropped to the lowest point in five years. lRelated Democrats Keystone pipeline bill falls short in Senate vote Nation Democrats Keystone pipeline bill falls short in Senate vote See all related 8 By some estimates, the price of oil already has dropped below what investors in Keystone would need to break even, and some analysts believe further drops are in store. The recent decline in [oil] prices has to give the sponsors some pause, said Chris Lafakis, a senior economist at Moodys Analytics. The prospect of abandoning the pipeline is something its Canadian builders and their supporters in Congress say they wont even entertain. Keystone is a decades-long investment that backers of the project say will not be changed by what they portray as a temporary glut in the oil market. We sign binding, long-term commercial agreements with our customers so they can reserve space to deliver the crude oil they need to their customers, Mark Cooper, a spokesman for TransCanada Corp., which would own the pipeline, wrote in an email.
Posted on: Mon, 15 Dec 2014 19:29:19 +0000
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