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Fri Jan 14, 2022, 12:52 PM

One of the World's Dirtiest Oil Patches Is Pumping More Than Ever

TORONTO—Major oil companies, under pressure from investors and environmentalists, are fleeing Canada’s oil sands, the fourth-largest oil reserve in the world and by some measures one of the most environmentally unfriendly. Investment in existing projects has stalled, and banks are refusing to fund new ones. Nevertheless, oil production there is expected to continue for at least two more decades. Local companies have stepped in to keep working the existing mines and wells. Last year, the oil sands were on track to deliver more oil than ever.

Governments and financial institutions are pushing to wean the world from fossil fuels to address climate change. But demand for energy remains robust. So long as existing oil fields—no matter their carbon footprint—remain profitable, they are likely to remain in production long after big-name multinational companies walk away.

There are still roughly 170 billion barrels of thick, tar-like bitumen under boreal forests in the Canadian province of Alberta, the largest amount outside of Saudi Arabia, Venezuela and Iran. Domestic companies such as Canadian Natural Resources Ltd. , Suncor Energy Inc., Cenovus Energy Inc. and Imperial Oil Ltd , an affiliate of Exxon Mobil Corp. , extracted more crude from those fields in last year’s third quarter than the same period a year earlier.

Politicians and others pushing for a rapid transition to cleaner energy sources face a conundrum. Despite intensifying efforts to transition the global economy away from fossil fuels, alternative energy sources currently come nowhere near meeting present demand. That means companies will continue to pump oil even from carbon-intensive sources.


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