Shell has shelved plans for a major new tar sands mine in Canada, the largest project yet to fall victim to low oil prices.
The company has withdrawn its application for the 200,000-barrel-per-day (bpd) Pierre River project and will instead concentrate on boosting the profitability of its existing 255,000-bpd oil sands operations.
“The Pierre River Mine remains a very long-term opportunity for us, but it’s not currently a priority,” said Lorraine Mitchelmore, president of Shell’s Canada. “Our current focus is on making our heavy oil business as economically and environmentally competitive as possible.”
Oil sands extraction is controversial because of its high carbon footprint compared to conventional crude. Furthermore, a series of analyses have found that the world’s fossil fuel reserves are already three times greater than could be burned if global warming is to remain below 2C, the stated aim of the world’s nations.
If governments keep their pledge, the unburnable fossil fuels will have to remain in the ground and would become worthless, potentially endangering trillions of dollars of investors’ funds.