Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports, noting the move could have dire long-term consequences for the production facilities.
Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production.
Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel.Oh, what's another $12-15 billion? It's money we don't have pissed away and that's all it is.