Alberta’s oil future is grim unless government gets on board, say energy experts
Red Deer Advocate
February 15, 2018
A sobering picture of oil and gas investment pouring into the U.S. as Canadian politicians dither and fight over pipelines was painted at an energy forum in Red Deer.
Three energy experts, invited to speak by the Red Deer Chamber of Commerce on Thursday, were in agreement that all levels of government need to get their policies and attitudes in gear, or Canadian energy — and the Canadian dollar — will fall further in the competitive global market.
“There’s a lack of leadership, an inability to move ahead on projects that were already approved,” said Mark Scholz, president of the Canadian Association of Oil Well Drilling Contractors, referring to three stalled pipeline expansions.
One of them, the Kinder Morgan Trans-Mountain oil pipeline, caused a trade war between Alberta and B.C. when Canada’s most westerly province hindered its expansion because of vocal opponents. Alberta’s premier banned the import of B.C. wines in retaliation.
“Here we have two major Canadian provinces duking it out, and we are in need more (federal) leadership at the top… if we don’t get this message out that things need to get built in this country” then all of Canada — and not just Alberta — will be in economic trouble, Scholz added.
Chamber members at the Radisson Hotel heard that 10 per cent of this country’s GDP depends on the energy sector.
“There’s not a hospital or school in this country that’s not partially funded by this industry,” said Jeff Gaulin, vice-president of communications for the Canadian Association of Petroleum Producers.
Gaulin feels that while some Alberta oil businesses have seen an “uptick” since 2017, Canada as a whole, is falling behind and feeling the consequences of international investment dollars heading south.
Even some Alberta businesses are shifting their operations to Texas because it’s a far easier place to get things done, he added. “In the last five years we’ve lost 125,000 oil and gas sector jobs. Some have come back,” but not all.
Scholz’s assessment is that “our kids and grandkids will not have what we had,” in terms of employment opportunities unless the government quits hampering the industry with uncertainty and too many regulatory hoops.
Gaulin pointed out the world’s population is fast growing and still very dependent on oil and gas. Canada has a vast resource supply, and the cleanest extraction and rehabilitation practises in the world, yet “the government is throwing up barricades,” instead of building what’s needed to get Canadian oil to more markets, he added.
Aron Bacon, assistant v-p of credit risk management at the Business Development Bank of Canada, discussed how the Canadian dollar is closely tied to the industry’s prospects. He expects the dollar to fall to about 75 cents U.S. this year, as energy profits continue to lag.
“This is the new normal in Alberta until the market changes.”
Despite the gloom, Bacon feels “the oil and gas industry is resilient and will adapt.”
Story: Red Deer Advocate