President & CEO’s message

After the year we’ve just had, some may argue it would be difficult to be anything but positive about the future of Canada’s energy services sector. And to be fair, “how could it get any worse?” was a legitimate question to ask if you worked in our industry from 2014 to 2019. Unfortunately, however, 2020 gave us the answer to that question with such force that I’m not sure many people will ever ask it again, for fear of the consequences!

As rough as 2020 was, thankfully for CAODC members, the fall was from a low height. We were already at historical activity lows, and had been through layoffs, bankruptcies, and shut downs for several years prior. While 2020 did, sadly, mean the end of the road for some companies struggling to hold on, for others, it was yet another year of “more of the same” from an operational perspective.

Arguably, the two biggest challenges we have faced as an industry over the past six years have been lack of pipeline capacity and low commodity prices. In 2020, TMX, Line 3, and Coastal GasLink quietly moved past regulatory hurdles and nearer to completion, and we are now closer than ever to seeing a meaningful increase in takeaway capacity for our products to both US and overseas markets. We also saw the price of oil increase substantially from historical lows set earlier in the year, and with a higher price for natural gas, and an increase in activity in other commodity types such as helium, hydrogen, and geothermal, we managed to end the year with solid drilling activity numbers. On the service side of the equation, the federal government’s $1.7 billion in funding for well reclamation entered the market and has stabilized activity levels for service rig contractors in western Canada. Additionally, we have seen indications that the newly elected Biden administration in the US will be implementing environmental regulations that are more comparable to Canadian standards, bringing operating costs into closer alignment. And finally, with the approval and distribution of several vaccines, we may be nearing the end of many of the pandemic restrictions that have had such a dramatic impact on demand for our products.

Which brings us to 2021, and Ladies and Gentlemen, I am very pleased to say, I haven’t felt this positive about the prospects for our industry in a long time. We have finally come to a place where the fundamentals support a return to brighter days, and although outcomes are never certain, the excitement in the air is supported by facts, and not optimism alone.

For all we endured in 2020, we can be grateful it is now behind us. Toward the end of the year, and into the spring, we have seen very promising signs of a much welcomed and much deserved uptick for our membership. I couldn’t be happier to see activity levels brimming, help wanted signs, and talk of growth for the first time in a long time. Congratulations to all our members who have worked so hard to keep their businesses alive and their employees working. I look forward to this year as the beginning of better days ahead for us all.

Mark A. Scholz is president and CEO of the Canadian Association of Oilwell Drilling Contractors.