Capital spending on oilsands projects will continue to rise over the longer term, though temporary delays should be expected amid the current market turmoil, says a global risk consultant and oil policy specialist. The consultant stated that the recent decrease in oil prices will slow development in the short term, but the world is still running out of oil and the US needs Alberta's vast bitumen deposits. The consultant noted that one factor that bodes well for the industry is that Alberta's fiscal regime gives companies a better chance to make a profit than any other fiscal regime, globally, as the impact of the new royalty framework will be less than the royalty impact in virtually any other country.

Petrobank Energy and Resources has received indications from the Alberta Energy Resources Conservation Board (ERCB) that it has decided that the planned expansion at Petrobank's Whitesand facility has met all regulatory requirements and the ERCB is expected to issue its approval document in due course. The objective of the expansion is to further demonstrate Petrobank's proprietary toe to heel air injection (THAI) technology, an in situ combustion technology for recovery of bitumen and heavy oil. Petrobank plans to proceed with drilling of the expansion wells as soon as ERCB approval is provided.

Citing low commodity prices, high labour and other costs and the unknown impact of Canadian emissions regulations, StatoilHydro ASA announced that it has withdrawn it's regulatory application for the $4 billion upgrader portion of its Kai Kos Dehseh integrated thermal oil sands project. Statoil noted that this decision will not impact the upstream portion of the company's oil sands project.

On the heels of its announcement that it will delay its decision on moving forward with a 100,000 bpd of bitumen expansion of its Athabasca oil sands project to 2009, Shell has stated that it also has withdrawn its regulatory application for the 100,000 bpd Carmon Creek in-situ oil sands project northeast of Peace River, Alberta. Shell plans to conduct a thorough review of the Carmon Creek project and then look to submit a new application in the future.

Petro-Canada announced that it and its partners in the Fort Hills oil sands project, Teck Cominco and UTS Energy, have decided to push back the decision on moving forward with the mining and extraction portion of the project to 2009 and indefinitely delay the decision for the construction of an upgrading refinery.

Currently producing wells and oil sands projects will move to the new Alberta royalty regime, as planned, on January 1, 2009. The Alberta government has announced a transitional royalty regime to encourage new drilling of medium-depth conventional oil and natural gas wells. Under this program, all wells with a measured depth between 1000 m and 3500 m, spudded between January 1, 2009 and December 31, 2013, will be eligible for a one-time election that must be made prior to spudding. Re-entry wells that are given a new spud date will also be eligible. The wells will be required to shift back to the new royalty regime on January 1, 2014. The new program is in addition to the Natural Gas Deep Drilling Program and five-year oil program for deep oil exploration that were previously announced.