Will another historic moment for oil, in this case going into negative territory, be the one that knocks the industry off for good or will it spur the action some believe is needed to stabilize the sector?
Canadian Association of Petroleum Producers president and CEO Tim McMillan says this is putting substantially more stress on individual companies, adding companies are failing and this will accelerate it.
“What we do in the coming weeks and months will define whether the energy sector is going to be the workhorse again for the Canadian economy,” McMillian said.
He believes now is the time for governments to make long term changes to regulations, among other things, to push the sector ahead given how far behind it was when the pandemic hit compared to other oil-producing nations.
“If you don’t see in this crisis that we have to adjust the way we’re operating, I don’t think you ever will,” he added.
While it’s a big deal for cities like Edmonton and Calgary, the job losses brought on by the pandemic and this new historic drop in oil prices will be downright devastating for smaller towns like Drayton Valley with mayor Michael Doerksen painting a grim picture.
“Seventy to 80 per cent of our economy in our town is driven by the oil and gas industry. We talk about the potential of unemployment rates in Alberta hitting 20, 25 per cent. It’s going to be significantly higher in a small community like Drayton Valley.”
The end of oil is a story we’ve heard before in the ’80s the late 2000’s and then again over the last several years.
“It’s certainly not the end of oil I think there’s a lot of room left for that; we just have to be smarter
about how we go about it,” Doerksen added.
He believes that includes making Canada energy independent.