While analysts have previously predicted that US President-elect Donald Trump’s pro-energy stance could benefit the Canadian oil industry, the head of Canada’s drilling association isn’t so optimistic, reports the Financial Post
According to Canadian Association of Oilwell Drilling Contractors President Mark Scholz, a boost in US drilling activity, coupled with an anticipated rollback of US President Barack Obama’s environmental regulations, could lead to a spike in American oil and gas production.
“It is absolutely a serious threat and we have to take it seriously,” he said. “If I was a US driller, I would be very optimistic about the prospects of greater activity in the United States.”
In its activity forecast for 2017, the CAODC predicted slight industry improvement next year following a drought brought on by the past two years of low oil prices. Drilling activity is projected to produce 4,664 wells in 2017, 31% more than the number seen to be finished by the end of this year.
Sholz pointed out the need for new pipelines to move Western Canadian oil to the West and East Coasts, as well as other obstacles. He also urged government officials to consider the effects of environmental policies such as carbon taxes on the domestic industry’s competitiveness against the US under Trump.
Unemployment is another major problem. According to the CAODC, 120,000 direct and indirect job losses have resulted from declines in oilfield drilling over the past two years. Drilling companies have started hiring back workers that they’d laid off, and next year’s production is seen to generate 3,000 new jobs – but it’s hardly enough for Alberta to reverse past increases in its unemployment rate, which hit 8.5% in October.
“Activity is moving in the right direction but we’re still in a depressed and desperate economic environment,” he noted.
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