CAODC calls on federal government to take action after dismal 2020 drilling forecast

Industry lost $30 billion in foreign capital since 2017. More than 13,700 jobs expected to be lost between 2018-20.

CALGARY – An oil and gas industry association is calling on the federal government to stabilize the industry and restore confidence.

Canadian Association of Oilwell Drilling Contractors (CAODC) CEO Mark Scholz said the oil and gas industry has lost about $30 billion in foreign capital since 2017, which led to layoffs and 29 high-performance drilling rigs relocating to the U.S.

“The attacks from foreign-funded, radical environmental groups and punitive policy measures from our own federal government have caused Canadian oil and gas families to suffer unnecessarily,” he said Wednesday.

“The attacks from foreign-funded, radical environmental groups and punitive policy measures from our own federal government have caused Canadian oil and gas families to suffer unnecessarily,” – Canadian Association of Oilwell Drilling… Click To Tweet

Scholz said after the Canadian federal election in October, the sentiment toward Canadian oil and gas is nearing all-time lows. 

The CAODC blamed environmental activists and federal legislation standing in the industry’s way, such as Bill C-48 that banks tanker traffic on B.C.’s coast and Bill C-69 that puts a stricter approval process for energy infrastructure projects.

“It’s time for the federal government to recognize what the rest of the world already knows, the Canadian oil and gas industry is a supplier of choice, good for the environment and the economy, and should be given every opportunity to compete internationally.”

The CAODC is calling on the federal government to:

  • Accept Alberta’s climate plan as a federal equivalent program.
  • Repeal bills C-48 and C-69.
  • Guarantee the completion of the Trans Mountain Expansion project using all available tools and resources.
  • Include and prioritize the responsible development and export of Canadian oil and gas as an effective and timely means of reducing global greenhouse gas emissions.

The Petroleum Services Association of Canada (PSAC) released a flat outlook for 2020 drilling activity on Oct. 31 saying they only expect about 4,500 wells to be drilled in Canada in 2020, down from 5,000 wells in 2019 and 6,950 in 2018.

READ MORE: Calgary-based Houston Oil and Gas ceases operations, files bankruptcy

“These are very challenging times and I know that is felt more in the service sector amongst drillers and contractors than perhaps any other part of Canada’s energy industry,” Premier Jason Kenney said at a Canadian Association of Oilwell Drilling Contractors (CAODC) luncheon in Calgary Wednesday.

“You know that the rig fleet is at its lowest levels since 1977, or second-lowest level, and operating days for rigs are at their third-lowest level since 1990. And the workforce in your industry is one-third the size of 2014.”

"You know that the rig fleet is at its lowest levels since 1977, or second-lowest level, and operating days for rigs are at their third-lowest level since 1990. And the workforce in your industry is one-third the size of 2014.” Click To Tweet

More than 13,700 jobs are expected to be lost in the oil and gas drilling industry between 2018-20.

He added that Canada’s oil and gas industry is at a critical turning point.

READ MORE: Texas more than twice as attractive for oil and gas investment than Alberta: Fraser Institute

“It would appear the only place Canada’s exceptional reputation for technologically driven environmental best practices isn’t recognized is in Ottawa,” said Scholz. “If we do not create an environment where the oil and gas industry can compete internationally, we won’t have an industry left in this country.”

READ MORE: Texas-based BJ Services pulling out of Red Deer

In addition, the Swedish Central Bank Riksbank posted on its website that it recently sold bonds issued by Alberta because of the government’s “large climate impact.”

READ MORE: Higher increase of bankruptcies in Alberta than any other province

On Nov. 8 the Alberta Government announced it was allowing all producers to drill new conventional oil wells without being restricted by production limits. Existing producing wells will remain under curtailment.

READ MORE: No production limits for new oil wells to help create jobs, says Alberta government

-george@albertapressleader.ca

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