There's a really interesting interview with the new CEO of Shell Peter Voser in the FT today, with an important development for tar-sands watchers. Shell, who are heavily involved in extracting oil from Canadian tar sands, are scaling back a planned expansion of their operations.
The FT say:
Shell is raising its tar sands production with the $14bn (£8.7bn) expansion of its 60 per cent owned Athabasca Oil Sands Project to a capacity of 255,000 barrels per day, due to be completed next year.
However, Mr Voser said the company had "clearly scaled down" its earlier plans for a further rise to 700,000 b/d.
Given the opportunities for developing clean, renewable energy sources, it's difficult to feel too enthusiastic about a scaling back from a planned 700,000 barrels a day to 255,000 barrels. Basically, any investment in the dirtiest form of oil production going is still a pretty regressive step.
Nevertheless, this is a pretty significant announcement that is clearly going to make people think about the delicate economics of tar sands production. Particularly as about a third of Shell's oil reserves - the oil production capacity that they can exploit in the future - are in the Albertan tar sands.
The quote in the FT is quite telling -
"Over the past two years and certainly over the past six to eight months, I've taken the pace out of that because we have enough other growth opportunities," he said.
He added that soaring costs in the tar sands region of Alberta had made investment there less attractive.
You'd certainly expect Shell's CEO to be talking up growth opportunities for the company. But the bit about rising costs is interesting. Getting oil out of 'unconventional' sources like tar sands is not only massively environmentally destructive, it's also more expensive.
That means that making investment worthwhile relies on there being a continued high and stable oil price. And with oil prices remaining pretty volatile, and with demand for oil hit pretty heavily by the global recession, tar sands isn't looking like such a sure bet for making money any more. Other oil companies - like BP - who are toying with heavy investment in the tar sands will certainly be reading this one with interest.
Of course, ultimately the frustrating thing is the lack of vision from the big oil companies. Of his role, Peter Voser says to the FT:
"That's the visionary part: the objective for the longer term. Where will the oil and gas companies go? Where is the energy industry going? So that's now my task, to set that."
You might think a visionary would have noticed the climate change debate, and the complete lack of ambition by companies like Shell to engage with it. Peter Voser is asking all the right questions, but in signalling a continued devotion to oil exploitation, coming up with completely the wrong answers.