ALBERTA HAS lured many an oilman in recent years. Tapping new wells of thick Canadian bitumen and processing it into crude is expensive, but the break-even oil price for operating an existing one can be as low as $25. Large reserves and low depletion rates mean that companies can offer measured growth and attractive dividends. Instead of lubricating profits, however, Canada’s tar sands are bunged-up with protests against new pipelines. Most international oil firms have fled. The latest firm to retreat is Teck Resources. On February 23rd the Canadian company scrapped plans for a C$20bn ($15bn) oil-sands mine. Canada has not yet aligned “climate policy considerations” with “responsible energy sector development”, wrote Teck’s boss, Don Lindsay. Without regulatory approvals, an investment partner, new pipelines and a high oil price, Teck might as well have sought the Moon.
Things are looking rather different south of the border. Fracking a virgin shale bed is simpler—and cheaper—than mining a new tar pit. American crude production surged by 94% from 2011 to 2018, hitting Canada twice over: by pushing down the oil price and sucking away investment. Canadian oil output rose only two-thirds as fast. Chevron and ExxonMobil are among the global energy giants to pump capital into America’s vast Permian basin in Texas and New Mexico; the pair...
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