Royal Dutch Shell Plc, Exxon Mobil Corp., and the rest of the oil industry may face higher costs to exploit Canada’s tar sands, the biggest deposit outside of Saudi Arabia, because of efforts to rein in climate change.

A Canadian mandate to bury carbon dioxide emitted during the process of extracting the oil may add between $2 and $13 a barrel to production costs, according to an environmental group, Pembina. Mining crude from the area now costs around $60 a barrel. The additional costs are likely to feed through to consumers, leading to higher energy bills and contributing to inflation. Oil prices two days ago reached a record near $117 a barrel in New York, led by increasing demand from emerging markets, threats to supply in Nigeria and British refinery strike.

Canada’s increasing costs “are important in how the market looks to the world,” Societe Generale SA’s head of oil research in London, Michael Wittner, said. “One way or another it will push up prices for Canadian oil sands,” he said. The European Union, Canada, Norway, and Australia are among nations setting rules to force industries that use or produce energy to store carbon dioxide underground, instead of venting it into the atmosphere. The accumulation of carbon because of burning fossil fuels is blamed for global warming.

“It is not only about oil prices, you have to take a long-term view on CO2 regulation, royalties, and taxation and then see how unique your technology is,” the chief executive officer of Shell, Jeroen van der Veer, told reporters while attending the International Energy Forum in Rome yesterday.