High costs deter oil sands investment

CALGARY, Alberta, Nov. 16 (UPI) -- Output from Alberta's oil sands will most likely slow due to higher costs.

Analysts say the industry will more than likely grow more slowly than it was predicted 2006. The National Energy Board said the cost of adding just one new barrel per day of synthetic crude production capacity in the oil sands is up to between $80,000 and $100,000.

The high costs have begun to deter investment. The oil sands are one of Canada's largest oil resources, but the oil is more difficult to recover than traditional oil, the Globe and Mail reported.

A recent report released by the NEB suggests that by 2015 Canada's total oil output will be 4.05 million barrels of crude a day, 61 percent higher than in 2005. However, of the total, only about 2.8 million barrels will come from the oil sands, down 200,000 barrels from last year's forecast report.

The NEB forecast suggests if oil prices remain between $90 and $100 per barrel, Canada's crude output could rise to almost 6 million barrels per day by 2030.