08/04/2017 09:51 EDT | Updated 08/04/2017 09:52 EDT

Is Alberta's Oil Industry Slick Enough For A Comeback?

It seems as if things are starting to turn around for the Canadian province.

The oil and gas industry has over the decades been a primary economic activity for more than 10 per cent of Alberta's households. The drastic economic downturn of 2016, however, brought crisis to Alberta and, consequently, the whole North American continent.

However, it seems as if things are starting to turn around for the Canadian province.

The industry is at the beginning of what could be a robust recovery phase, and while the initial numbers are promising, there are a number of factors that will determine exactly how successful the oil industry will be in making a comeback.

Todd Korol / Reuters
Oil rig floorhands work on an oil rig near Fort McMurray, Alta.

A steady uptick

In 2014, there were a total of 565 oil rigs in the province, and over 400 of them were active. In 2016, 523 total rigs existed in Alberta, and less than 150 of them were active. In 2017, a total of 450 are still functional in the province, and over 300 of them are active.

Despite diminished oil rigs in the province, the industry is expected to grow more than two per cent in Alberta during 2017, which will put it just below Ontario as the fastest-growing economy in Canada.

Much of the returning development in the Alberta oil industry is due to the rebuilding of Fort McMurray, which was devastated by wildfires in 2016.

Fort McMurray is seen as the entrance to the oilsands and is vital to the production of oil in the region. The wildfires that plagued Fort McMurray prevented more than 50-million barrels from being produced during 2016. Now that the base has been rebuilt, the economy is slowly recovering from its wounds. There might not be much in the way of immediate job growth, though.

According to oil consultants in Alberta, most of the oil companies are exercising caution in their decision to rehire employees should business be as good in 2018 as anticipated.

The companies have no faith that the volatility is contained. They don't want to incur costs laying off employees again, and neither would they wish to see the families of those laid-off employees devastated again. Therefore, an estimated 25 per cent of total jobs lost in the oil recession will not be recouped by oil companies should the jobs be coming back.

Oil companies are having a hard time attracting employees who fear the same thing might happen again.

Future stability

According to a study conducted by the Alberta government, the province is currently seeing excellent recovery and regrowth. Some believe that the industry has the potential to reach where it once was, but only because of advancing technology and how it can replace a human workforce. If the industry doesn't provide jobs, then those workers will have to migrate to an industry that does.

To some degree, this is already occurring in the industry. With the sudden loss of so many jobs over the recent years, many workers have already been forced to seek employment elsewhere.

Now that the oil industry is starting to recover, oil companies are having a hard time attracting employees who fear the same thing might happen again. This could spur on technological innovation, which would displace more workers. Like most economies, balance is the key.

For now, the oil industry in Alberta is stable, but how long will it last? One thing is sure: if the oil industry in Alberta comes back, it will look completely different in the future.

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