By Mark A. Scholz
When considering just how badly things have gone over the past half-decade, it’s hard to believe we are exiting another year of historical lows in the Canadian energy services industry. After an uplifting start to 2020, who could have predicted the world would come to a halt in the grips of a global pandemic, and push CAODC members to lows not seen in the 70 years we’ve been an association?
After a decent end to Q1, we watched as markets crashed, oil pricing plunged into negative territory for the first time ever, demand for our products dropped off dramatically, and our little ray of sunshine disappeared behind the storm clouds yet again. As the old saying goes: if it weren’t for bad luck, we’d have no luck at all.
If it’s true that a person’s character isn’t known until they come upon hard times, then surely the character of the women and men in our sector is no secret. Six years into this downturn and we continue to see good people losing their livelihoods. Over the years some have lost a job, then found another, only to lose it again. We’ve seen many who just could not afford to remain in our industry, despite their preference. We’ve lost talent and equipment, expertise and work ethic. We’ve watched as the busiest businesses in our sector have become the auction houses, selling off dreams at pennies on the dollar. But through it all, at CAODC, our members have done nothing but support our Association. Incredibly, our registered rig fleet numbers have remained relatively stable, and there has been no material reduction in drilling and service rig companies in western Canada. Words cannot express how proud I am to represent such a resilient group of hard-working individuals. For all who have left, more have remained; we are still here and waiting for our turn. The depth of character in the Canadian oil and gas industry is known, and it’s exceptional.
So, with hard times in the rear-view mirror, it is with high hopes our industry sets its sights on 2021. Encouragingly, many signals indicate a better year ahead: Canada’s pipeline situation is improving in a big way. Although the U.S. election results may have negative longterm impacts on the Keystone XL pipeline, other projects such as the Trans Mountain Expansion, Coastal GasLink, and Alberta’s NGTL pipelines have made considerable progress. On the commodity side, natural gas pricing is looking as strong as it has in several years, and as the world searches for cleaner sources of fuel, Canada’s natural gas and LNG have a strong value proposition across the board. On the demand side, according to the International Energy Administration (IEA) global demand has returned considerably from early Q2 lows, and didn’t ever reach dire lows predicted early on in the pandemic. And finally, several countries are having very successful vaccine trials advancing toward their end stages. With any luck a safe and effective COVID vaccine will be available soon, and economies and livelihoods around the world will begin to stabilize.
Post-COVID, a huge opportunity for Canadian energy will present itself once again. We have the world’s premium energy brand—the most ethically sourced, responsibly produced, cleanest hydrocarbon-based energy available in a world that will be needing our products for decades to come. Let’s hope we exit this pandemic with a renewed sense of what this opportunity means for all Canadians, and make 2021 the beginning of many great years to come.