Although the consumer price index moderated last month, not all industries are out of the inflationary woods. Exhibit A has to be the Canadian oil sands, which is experiencing tightness in everything from giant tires to capable workers. With around $100 billion in current or planned industry spending, there isn't much room for a letup in costs.

The cost crunch, combined with cascading crude prices, is causing some casualties. On Tuesday, the Fort Hills Energy partnership -- comprising operator Petro-Canada (NYSE:PCZ), Teck Cominco (NYSE:TCK), and UTS Energy -- announced that its project costs are running around 50% over budget. That takes the grand total to around C$21 billion (or $19.6 billion in the U.S.), or a per-flowing-barrel cost of C$150,000.

To give you some context, Canadian Natural Resources (NYSE:CNQ) is running about 36% over budget at its Horizon project, but the on-stream cost is only about C$84,000 per barrel, per day. It's early yet, but Suncor Energy's (NYSE:SU) massive Voyageur expansion, due for completion in 2012, is estimated to come in at just a touch over C$100,000 per flowing barrel.

In comparison with these leading lights, Fort Hills appears to be in trouble. When asked at a recent conference about the crude price at which a new oil sands entrant faces marginal economics, Suncor's Rick George responded that it gets tough around US$80 to $90 per barrel of crude oil. I'm not going to predict the outcome for Fort Hills, but it wouldn't be the first time that Teck Cominco has soured on a project on account of soaring costs. Just last winter, such mining woes forced Teck and partner NovaGold Resources (AMEX:NG) to table Galore Creek.

If Fort Hills, or other emerging oil sands ventures, become footnotes, it would be a real blow to the U.S. consumer, who is a prime beneficiary of increasing Canadian crude imports. The winners, naturally, would be the entrenched oil sands ogres left standing -- Suncor and Canadian Natural. Marginalized competitors would spell less pressure on those precious materials and skilled laborers, and improved rates of return on future expansions.