| Let’s hope for better 2010 for industry |
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| Local Content - Editorial |
| Written by production |
| Friday, 18 December 2009 20:33 |
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This year will not go down as one of the best for the oil and gas industry here in Alberta. As Vauxhall Advance subscribers have read about lately in our feature series, The Oilpatch: The Challenges Facing Alberta, 2009 was certainly a down year. Crude oil prices were cut in half from highs of about $140 in 2008 to settle at about $70 per barrel for much of 2009. Indications are oil prices could see a small bump in 2010 but in the overall scheme of things, that is just one part of the equation. For Alberta, the more-troubling development has been the fact natural-gas prices are in the tank. In this area of Alberta, natural-gas wells are common. But in 2009, activity in that sector slowed to a snail’s pace. With natural-gas finds and new technology to develop new fields, and a drop in demand, a perfect storm was created, whereby prices took a dive. That has caused many companies to scale back natural-gas operations in Alberta, and has put many southern Albertans out of work. A rebound in that sector for 2010 does not look very likely. Most experts have suggested natural-gas prices will stay flat next year, or at best, may rise very slightly. Not only does that impact our labour sector, it also impacts Alberta’s treasury. For every drop in oil and gas prices, Alberta loses precious royalty income. That income, where prices were high, led to a veritable spending spree on infrastructure projects, many of which were badly needed following the Ralph Klein days of cost cutting. No matter how you look at it, Alberta faces some huge challenges in 2010, along with nearly every municipality, which must also deal with the fact they will receive less in provincial and federal funding. With that in mind, 2010 looks to be another challenging year. |
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