Economics
As of 2007, crude oil prices were significantly in excess of the average cost of production, which was about $28 per barrel of bitumen. However, bitumen production costs are rising rapidly, with production cost increases of 55% from 2005 to 2007, due to shortages of labor and materials.
In mid-2007, Royal Dutch Shell announced that in 2006 its Canadian oil sands unit made an after tax profit of $21.75 per barrel, nearly double its worldwide profit of $12.41 per barrel on conventional crude oil.
The minority Conservative government of Canada, pressured to do more on the environment, announced in its 2007 budget that it would phase out some oil sands tax incentives over coming years. The provision allowing accelerated write-off of oil sands investments will be phased out gradually, so projects that had relied on them can proceed. For new projects the provision will be phased out between 2011 and 2015.
Read more about this topic: Oil Sands
Famous quotes containing the word economics:
“There is no such thing as a free lunch.”
—Anonymous.
An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cooke’s America (epilogue, 1973)
“The animals that depend on instinct have an inherent knowledge of the laws of economics and of how to apply them; Man, with his powers of reason, has reduced economics to the level of a farce which is at once funnier and more tragic than Tobacco Road.”
—James Thurber (1894–1961)
“I am not prepared to accept the economics of a housewife.”
—Jacques Chirac (b. 1932)