Budget cuts due to the falling price of oil has cause expected Shell investment decisions to be delayed. The final decision on investing in the last two phases of the Carmon Creek project has been delayed. This was announced shortly after the Royal Dutch Shell company revealed on Thursday that the business will be cutting $15 million in global capital spending. 40 projects have been either eliminated or delayed as a result of these cuts, and Carmon Creek is one of the projects affected. This announcement comes just a few weeks after Shell Albian Sands said that they would cut 10% of their workforce, costing about 300 jobs. All of these cutbacks are the result of oil prices dropping fast, making it difficult for petroleum companies to stay cost effective and lowering the potential profits seen with new projects.

Right now oil prices are volatile, and these are much lower than they have been in the recent past. High gas and oil prices have made oil recovery very profitable, but when prices go down then budget cuts must be made to offset the lower profits achieved. The Shell investment decisions announced in the last month have been caused by concern that oil prices will continue to plummet and recovering this precious resource will be much less profitable in the near future. The effect that these decisions have on Wood Buffalo and Fort MacMurray could be damaging. It is too soon to tell which projects will be delayed and which ones will be put on hold indefinitely.