It’s been a challenging year for the oil and gas industry in Alberta, as the province has seen depressed oil prices, little work to be found, and drilling all but halted.
From BOE’s Well Activity Map, one can see 583 wells of oil/bitumen, gas, and others found. This number represents a stark cry from 2019’s 1,920, and even further from 2018’s 7,445.
The CAODC Rig Count shows 51 active rigs currently in Alberta. These numbers are much different from November 2019 when Alberta had 87 active rigs.
Even factoring in spring breakup, drilling has been down for the latter part of nine months, though could offer some reprieve in the form of winter drilling.
This plummet has sent shockwaves across the industry, with numbers not seen like this in decades.
With wells, there are six classifications of an oil or natural gas well: active, inactive, suspended, abandoned, orphaned, or reclaimed.
The industry has been a vital backbone to not only the province’s economy for decades, employing thousands and bringing prosperity, but Canada’s economy as well, bringing in billions of dollars to public coffers.
Via CAPP, in Alberta, oil and natural gas development supports 30% of all economic activity in the province, supplies 415,000 jobs, while 20,000 businesses directly or indirectly depend on oil and gas activity, including 339 Indigenous-owned businesses.
As a result of this activity, the government receives $4.8 billion in resource revenues, $185 million in provincial corporate income taxes, $1.5 billion in personal income taxes, and $1.25 billion in the municipal portion of property taxes.
Although times were good and prosperous, Alberta’s biggest economic driver is experiencing hard times, seeing thousands of layoffs across the board, and has among the highest unemployment rates in the country, at 11.7%.
From the Statistics Canada’s September 2020 Labour Force Survey, Alberta did see a 1.8% uptick in work, though Premier Jason Kenney says Alberta is “far from getting out of the woods,” dealing with what he calls a “triple whammy” of COVID-19, seeing energy prices collapse as well as the global economy.
With the pandemic showing no signs of slowing down, there remains so much uncertainty. How will winter drilling look? Where will workers stay and will it be safe? Due to the work being done outside and parts of the crew working in different areas of the rig and lease, it’s possible for safe operations.
Oil prices are on the upswing and that’s a good thing for the industry and province, with a potential light at the end of the tunnel for an industry desperate for good news.