Statistics Canada recently reported that Alberta’s manufacturing sales year-over-year fell 13.2 per cent, with a loss of almost four per cent from December to January. Alberta’s economy continued to shrink because of the collapse of the oil and gas sector (Wikipedia, 2019). Canada is on recession watch after its economy almost stalled at the end of last year. Gross domestic product grew by just 0.1 percent in the fourth quarter, or 0.4 percent annualized. It’s a weak enough number that could easily be revised into a contraction as new data come in (Bloomberg, 2019).
In July 2019, Alberta’s seasonally adjusted unemployment rate was 7.0%, an increase of 0.3% from July 2018 (see below).
Canada is one of the heaviest hit oil producers in the world and Alberta as the premier oil producer and considered by many to be the bread basket of the whole country, has suffered the most pain. It is well accepted that Canada has an oil run economy. In the last ten or so years, Canada’s oil deposits were inventoried and found to be more abundant than previously perceived.
Wikipedia recorded that the Oil reserves in Canada were estimated at 172 billion barrels as of the start of 2015. This figure includes the oil sands reserves that are estimated by government regulators to be economically producible at current prices using current technology. According to this figure, Canada’s reserves are third only to Venezuela and Saudi Arabia. Alberta has 39% of Canada’s remaining conventional oil reserves, offshore Newfoundland 28% and Saskatchewan 27%, but if oil sands are included, Alberta’s share is over 98%.
Why not join the more than half a million Canadians who support Canada’s energy sector! Whoever you are, wherever you are, and whatever you do, most especially if you are Canadian, it’s time to show your interest and determination shoring up Canada’s oil and natural gas resources. Sign up with Canada Energy Citizen to stay up-to-date on the latest from the industry. The video below is an eye opener, aptly describing what has been going on, the impartiality, and what needs to happen.
Canada is an emerging world oil power and offers more opportunities leveraging a better positioned government system, international reputation, political stability, regulatory compliance, logistics and infrastructures. It has found its way up the top tier of the hierarchy, firmly demonstrating that Canada can potentially take the rein in the near future (Frago, Rufran.The Risky Future of Oil). It is a pity however, that in the last ten years, this growth was stunted by a series of downturns, aggravated by adverse major political upheavals.
One does not have to be an university economic major to understand and feel the gravity of the situation. Canada’s economic growth was stunted for years and bringing about unemployment and hardship to many. This has now become a ballot issue. It is therefore wise and logical, to think about the political future of Canada in direct relation to the Oil and Gas future of Canada when electorates cast their vote this coming October 2019 federal election.
On a positive note, investors and companies should remind themselves that the issues of today will pass (although it is dragging its feet) in due time. It is the principle of change. Nothing in this world remains the same. We only sometimes think they are, but they are not. All investments look at the future prospects. While things are down today, the profits are for the taking years down the road. In the midst of the threats before us are opportunities. As the saying goes, “every cloud has a silver lining.”
Wisdom to remember: “A good and balanced decision maker is not driven mainly by the happenings of today, but more on the prospects of tomorrow (Frago, R., 2015.Draft Manuscript-The Future of Canadian Business).”
Canada is sitting on large God-given oil and gas deposits so it is only logical to tap into them. Albertans will probably agree with me that it is a crazy idea to change the business focus to something else even in today’s hard time.
Imagine your dining table laden with delicious foods and fruits and your neighbor and some of your children telling you not to eat? While feeling hungry and frustrated, they suggest that you go out and find your food elsewhere. It is almost like, “Hey you do have legs but please do not use it for walking. Find something else to get you moving.” Do you agree with their suggestions or don’t you think they are foolish? (Frago, R., 2015.Keystone XL Final Rejection)
About the Author:
Rufran C. Frago is the Founder of PM Solution Pro, a Calgary consulting, product, and training services firm focusing on project and business management solutions. He is passionate providing advice, mentorship, education and training through consultation, collaboration, and what he uniquely calls, student-led training.
Related articles:
- The Risky Future of Oil (Frago, Rufran, 2016.Your World, Our Risk Universe.Wordpress)
- Oil Price, Recession: Causes, Issues and Risks (Frago, Rufran, 2015.LinkedIn Pulse)
- No Such Thing as Canada’s Dirty Oil. (Frago, Rufran, 2015.LinkedIn Pulse)
- Keystone XL Pipeline Final Rejection (Frago, Rufran, 2015.LinkedIn Pulse)
BOOKS AUTHORED BY RUFRAN FRAGO
- Risk-based Management in the World of Threats and Opportunities: A Project Controls Perspective.ISBN 978-0-9947608-0-7.Canada
- Plan to Schedule, Schedule to Plan.ISBN 978-0-9947608-2-1.Canada
- How to Create a Good Quality P50 Risk-based Baseline Schedule.ISBN 978-0-9947608-1-4.Canada
- Schedule Quantitative Risk Analysis (Traditional Method).ISBN 978-0-9947608-3-8.Canada