In this market and economy, you take the good news where you can get it, and on Friday U.S. investors received one from up north. Namely: oil sands. Tar-sands oil in Canada is cleaner than previously calculated, according to an Alberta government report.
Carbon-dioxide emissions from producing oil in Western Canada sand deposits are roughly 10% higher than competing U.S. crude imports, the Alberta Energy Research Institute announced, Bloomberg News reported. Earlier studies had found that greenhouse gases from oil sands were as much as 40% higher.
Two oil producers in the region that may benefit from the report: Nexen (NYSE: NXY) and Royal Dutch Shell (NYSE: RDS.A). Each sells oil sands-based oil to the U.S., and each may face additional restrictions under new emission rules being considered by the U.S. Congress.
Oil Analysis: The carbon dioxide emissions study, if confirmed by companion, independent studies, also represents good news for the United States. Oil sands from Canada will represent a major source of U.S. oil, assuming the price of oil stays above $60 per barrel. (Oil traded Friday up 25 cents to $67.41 per barrel). True, there are forecasts of an oil price collapse in the year ahead to $30 or even $20, but long-term, 2-5 years out, oil's trajectory will be up. Further, as production from conventional oil fields continues to decline, the U.S. and world will seek out and tap more unconventional oil fields, which only underscores the importance of the new, less climate-impacting oil sands.
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