Oilsands investment paralyzed even as crude prices surge amid mixed signals from U.S.

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U.S.\u0027s contradictory politics around gas prices, climate change are creating conditions that make investment decisions impossible. Read more.

With mid-term elections in November, United States President Joe Biden has been ticking off the policies that his administration could enact to lower gasoline prices, which have surged in the aftermath of Russia’s invasion of Ukraine, jeopardizing Democratic majorities in the House of Representatives and the Senate.

The decision was justified as a response to climate change, as oilsands producers are relatively high emitters of carbon dioxide. But that was before Russian President Vladimir Putin invaded Ukraine, triggering a supply shock that has pushed inflation to its fastest in four decades, and thus stoking political outrage that Republicans could tap to retake Congress.

Pipelines from Canada to the U.S. are already running near capacity. Exporting more crude by rail is an option, but it’s more expensive and therefore contingent on oil prices remaining high. In other words, peace in Europe and some kind of truce with Putin could change price dynamics overnight.As a result, oilsands producers face an uncertain future.

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