RE:RE:Yikes!!!....All this NOW makes sense....Seems to me that we are talking about two separate things here - the spill and the extension approval.
IMO the more serious of the two is the extension reconsideration.
The reconsideration by the AER is simply part of its legislation and regulatory oversight responsibilities. In March the AER got a scientific analysis commissioned by the Alberta Wildlife Association which provided evidence that the extension would cause or risk widespread environmental damage to the wetlands surrounding Fort Hills. The AWA asked that the AER reconsider its decision which it says it will do. Frankly, I don't the AER really had much choice in the matter.
My understanding is that the key issue at stake here is a a 14km wall varying in depth from 20-70 metres designed to separate the mine from the surrounding wetlands. There is a question as to whether this structure could actually protect the wetlands or not. Given the environmental sensitivity of the wetlands, this is clearly something that needs to have a definitive answer.
What are the implications for SU?
Well SU bought a bigger slice of the Fort Hills mine and planned to spend billions on the rehabilitation of the mine and the extension based on the previous approval by the AER last September. So the reconsideration by the AER at best will cause delays in the project and cost SU a ton of money in regulatory costs. At worst it could result in the extension not getting approval and SU wasted billions of dollars buying a bigger slice. This would result in a at least a billion dollar writedown of its assets.
Based on what has happened in pretty much any other large project (eg pipelines), resolution of this issue will most likely takes years. I would expect at a minimum, that SU will need to complete another scientific study to prove that the study tabled by the AWA is flawed.This creates a great deal of uncertainty for holders of SU stock and the SP will be discounted to reflect this uncertainty. With all this uncertainty, prudent investors who still believe in the future of oil will likely take their marbles and invest them elswhere in the oil patch.