BUSINESS
11/14/2019 10:54 EST | Updated 11/14/2019 11:02 EST

Canadian Oil Industry Blames 'Foreign Funded Radical Environmental Groups' For Job Losses

An oil drillers' industry group predicts more than 13,700 job losses between 2018 and 2020.

Todd Korol / Reuters
Encana employees at a gas drilling well east of Calgary, Alta., Feb. 15, 2007.

Canadian oil and gas drillers will have shed more than 13,700 jobs between 2018 and 2020 as an industry slump continues, an oil drillers’ group has warned in a new forecast that criticizes both the federal Liberal government and environmental activists.

The Canadian Association of Oilwell Drilling Contractors (CAODC) singled out federal legislation that it says stands in the industry’s way, including Bill C-48, which bans tanker traffic on British Columbia’s north coast, and Bill C-69, which set up a stricter approval process for energy infrastructure projects.

Watch: Encana moves head office from Calgary to U.S. Story continues below.

 

“It has been another extremely difficult year for our members,” CAODC president and CEO Mark Scholz said in a statement.

“The attacks from foreign funded, radical environmental groups, and punitive policy measures from our own federal government have caused Canadian oil and gas families to suffer unnecessarily.”

The report said that “sentiment toward Canadian oil and gas is nearing all-time lows” following October’s federal election, which saw the governing Liberals reduced to a minority that may have to rely on the support of parties that oppose oil infrastructure expansion.

The report estimates that the industry has foregone $30 billion in foreign capital since 2017. It says it expects a total of nine more wells to be drilled next year, taking the total number to 4,905.

That stand-pat forecast is more positive than one released two weeks ago by the Petroleum Services Association of Canada, which called for a 10 per cent drop in wells drilled next year to 4,500, down from 5,000 wells this year and 6,950 in 2018.

The CAODC says it expects the Canadian drilling rig fleet to continue to shrink, dropping by 48 from 545 to 497 drilling rigs, as the projected number of operating days increases slightly from this year. It estimates each working rig supports 145 direct and indirect jobs.

The group is calling on the federal government to repeal bills C-48 and C-69; accept Alberta’s climate plan as being “a federal equivalent program” so that the federal carbon tax isn’t applied there; and guarantee completion of the Trans Mountain Pipeline expansion project, which the federal government bought in 2018 for $4.5 billion. 

Kenney vows to keep fighting

Premier Jason Kenney vowed Wednesday to keep fighting for Alberta’s slumping oil and gas sector as the industry unveiled another disappointing drilling forecast and criticism surfaced from an unlikely source, the Swedish central bank.

A sold-out crowd applauded several times as Kenney listed his government’s pro-industry moves and ended a 30-minute lunch hour speech with a stinging rebuke of Bloc Quebecois Leader Yves-Francois Blanchet’s most recent criticism of Alberta’s oil economy.

“These are very challenging times and I know that is felt more in the service sector amongst drillers and contractors than perhaps any other part of Canada’s energy industry,” he said at the downtown Calgary event organized by the CAODC.

“You know that the rig fleet is at its lowest levels since 1977, or second-lowest level, and operating days for rigs are at their third-lowest level since 1990. And the workforce in your industry is one-third the size of 2014.”

Central bank divests from oil

Meanwhile, in a post on its website on Wednesday, Martin Floden, deputy governor of the Swedish central bank Riksbank, said the bank has recently sold bonds issued by Alberta, as well as those from the Australian states of Queensland and Western Australia, because of those governments’ ``large climate impact.″

He said the decision was in line with a board directive to consider sustainability aspects in investment decisions.

The Swedish banker’s comments were pointed out by Keith Stewart, a senior energy strategist with Greenpeace Canada.

“Central bankers aren’t your typical treehuggers, so Canadian politicians should take note when they start blacklisting government bonds over climate concerns,” he said in an email.

― With a file from The Canadian Press