Is anyone really going to be surprised when the Feds cancel the Frontier project the same way they did Northern Gateway? This government has already shown that it is willing to pick and choose winners and losers at the 11th hour of our decade long approval process. While I don't agree with it, the precedent is already set and investors for these major projects have already left Canada for greener pastures.
Approval or not, I don't see any capital showing up to fund a new pipeline project or a greenfield oil sands mine in Canada other than those that are currently underway. New investment for oil sands mines is far from economic in today's environment of $50 - $60/bbl WTI and projections for peak oil demand in the 2030's. Teck is in no position to fund Frontier itself and the only likely partners (Suncor, CNRL, Imperial) have their own projects that can be expanded at a much lower cost.
I think the best case scenario for Alberta is to get some significant capital injected from the Feds into a reclamation/abandonment fund even if it comes at the expense of the Frontier approval. Abandonment programs can get the oilfield back to work in the short term and start to chip away at the massive liabilities that are overhanging the province. A Frontier approval, on the other hand, could mean a whole lot of nothing if there is no line of sight to the project getting sanctioned.
|