Plunging oil prices caused companies to cancel or delay nearly three dozen projects. Extensive wildfires forced producers to shut down operations for weeks. And after a decade that saw little action on climate change policy, Canadian officials began shaping plans to cap the tar sands' emissions and set a national price on carbon with an eye to meeting the country's commitment to the Paris climate agreement.
Now the question is whether the downturn is just a blip or is the start of a trend away from the expensive and carbon-intensive fuel.
If enacted, the policies would implement the most stringent limits on the industry to date and send a signal that energy companies must balance development of the oil sands with climate action.
"This has been one of the most difficult years for us," said Ben Brunnen, vice president of oil sands for the Canadian Association of Petroleum Producers. "In addition to the investment climate, we are seeing some pretty substantial federal and provincial policies."
Since oil prices tanked in 2014, energy companies have delayed or canceled at least 64 projects in Alberta's oil sands, according to data from JWN Energy. Across the industry, producers have slashed billions of dollars from their balance sheets, with the latest a December divestment of oil sands assets by Norway's Statoil.
In October, ExxonMobil said it may wipe 3.6 billion barrels of tar sands oil from its reported reserves early next year in its annual filing to the Securities and Exchange Commission. The announcement came amid investigations by state attorneys general and reportedly the SEC into whether the company misled investors about the business risks of climate change and the value of its holdings. Reserves measure the amount of oil that a company can profitably extract, and Exxon had long resisted calls to reduce its reserves figure as oil prices fell.
Read more at 2016: Canada's Oil Sands Downturn Hints at Ominous Future
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