REMEMBER WHERE you are today.
On this day—20 April 2020—Western Canada Select was valued at less than zero. Our primary resource is now priced like excess trash bags (producers have to pay to have it retrieved and stowed away).
The coronavirus has pushed the envelope on just about every thing imaginable, but negative dollars for Alberta oil?
Is the unthinkable the new normal? What if it is?
It’s not like Albertans haven’t been forced to make some tough decisions lately. Unless what you do is deemed essential, you’ve been asked to sequester yourself—shut-in your home—out of harm’s way.
SHUT IN BUT NOT SHUT DOWN
It’s time to shut-in the oil industry because, well… because “it’s neither here nor there,” says Don. The enterprise is in limbo. And being stuck in limbo can be hell. Talk to anyone in the petroleum business in the province and that’s how they describe the present conundrum.
What’s playing out in Alberta’s oil economy is weirder than a dystopian novel with interchangeable villains & heroes depending on your ideology. Even speculative fiction author Philip K Dick couldn’t make this up: a national economy backstopped by hydrocarbons crashes, and a federal government in never-neverland—Trudeau (the younger) and his Liberals—that engineered the debacle in the first place offer up $1.7 billion to oil workers to clean up Alberta’s mess (inclusive of Saskatchewan & BC).
Uh-huh…
And then there’s fear. You can smell it in Calgary’s Bankers’ Hall.
Will lenders have the patience to wait and see or will they bankrupt oil companies? Right now, everyone in the sector is scrambling to hear what Export Development Canada and Business Development Bank of Canada terms are for guaranteeing portions of loans for mid-sized oil companies.
Alberta lost the ideological war against climate change advocacy and activism. Yes, lost. That’s the truth of it. And we’re grieving—big time.
Get over it.
If you need to console yourself, okay. You—we—fought the good fight.
Feel better? Now shut up about it.
THE 20TH CENTURY DIED IN 2020
Whether you think it’s the end of an era or an error, as of today, things are going to be very different for the oil & gas sectors in Alberta. Let’s accept this as fact and move on.
Imagine a future without the petroleum business as the lead pony. Dragging out the inevitable simply extends the pain.
To build out Alberta for the 21st century, we need to embrace builders & inventors, not consolidators & bureaucracy. Encourage ambitious leadership, not administration hiding out behind a desk. Let’s move beyond the ideological energy battles of the past (especially the faux duality of Green vs. Hydrocarbons) and focus on the next economy–an economy that is digital not analog.
Political philosopher George Grant wrote Lament for a Nation, over a generation ago. It was an anxious screed, more or less saying Canada was doomed. And if it’s any consolation, he was right in a fashion. His version of Canada did expire. And it could be argued it was long past its due date.
Admit it.
Sustaining the status quo in Alberta isn’t all that exciting. The last six years have been anxious ones and it’s time to dislodge ourselves from the shut in but not shut down purgatory.
Maybe we can still get natural gas to tidewater and export liquefied natural gas to places like Japan and China to displace coal (with carbon credits as upside). Maybe it’s time to seriously talk about building refineries in Canada and becoming more self-sufficient. Maybe it’s time to scale up other value-add projects along the hydrocarbon value chain. If so, let’s assign these opportunities necessary political and technical attention and decide.
HIT THE ONCE-IN-A-GENERATION RESET BUTTON
More than anything, it’s time to hit the once-in-a-generation reset button in Alberta and build out a new economy. What exactly that’s supposed to look like, let alone how it can work is up to you.
Here’s what we think needs to be re-imagined:
(i) our export-focused resource economy;
(ii) the ways we work, educate & train people;
(iii) how we connect across digital platforms.
And while we cannot know exactly what comes next, the pandemic coupled with a worldwide glut of oil that’s not going away anytime soon, forces us to embrace something out-of-the-ordinary and reject the laziness of business as usual.
Your ideas are extremely important now.
As Brion Gysin, the influential modernist who spent his formative years in Alberta once said (and might say again given our current predicament), “Nothing is forbidden. Everything is permitted.”
Don’t second guess yourself.
Comment below or drop us a line. We’re up for most anything that reads well and we’ll include your thoughts in future blog postings.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill. If you haven’t already, please subscribe to BEYOND POLARITY — scroll down on your phone or tablet, or look to the right in the panel beside this post. Enter your email to FOLLOW, a wheel spins, hamsters get fed.