Earth Equity News

Big Oil Projects Put in Jeopardy by Fall in Prices. By Jad Mouawad, NYTimes, December 16, 2008. "From the plains of North Dakota to the deep waters of Brazil, dozens of major oil and gas projects have been suspended or canceled in recent weeks as companies scramble to adjust to the collapse in energy markets. But the project delays are likely to reduce future energy supplies -- and analysts believe they may set the stage for another surge in oil prices once the global economy recovers. Oil markets have had their sharpest-ever spikes and their steepest drops this year, all within a few months. Now, with a global recession at hand and oil consumption falling, the market's extreme volatility is making it harder for energy executives to plan ahead. As a result, exploration spending, which had risen to a record this year, is being slashed... The biggest cutbacks so far have been in heavy oil projects in Canada, where some of the world's highest-cost production is concentrated. Some operators there need oil prices above $90 a barrel to turn a profit. 'If we cut back dramatically on investments, we could end up in a situation where supply growth goes flat when the economy starts to recover,' said Peter Jackson, an energy analyst at Cambridge Energy Research Associates [CERA]. 'The steeper the decline, the steeper the response.'"