Despite looming uncertainty around the price of crude, optimism among Canada's oil and gas producers is rebounding.
Following the 2015 crash that saw the price per barrel drop into the $30 range from well over $100, the industry has stabilized a bit, said Chris Montgomery, in communications and engagement with the Canadian Association of Petroleum Producers, who presented Sundre's council with an update during the June 19 workshop.
"There has been more drilling activity out here this year than last year," he told the Round Up during a phone interview.
In 2016, the industry throughout Western Canada drilled 3,700 new wells, and the association is predicting another 5,400 new wells in 2017, he said.
"Producers also have managed to adjust their business structures so they can operate at lower prices."
However, "What we're seeing is that not all areas of the province are going to come back equally."
While municipalities such as Sundre are, all things considered, faring fairly well, other parts of Alberta are likely to continue struggling. Because of the enduring uncertainty regarding the price of oil, companies are looking to make easier returns on their investments, which means costly oilsands ventures are not as likely to see a major return of activity any time soon, he said.
"There's more risk involved in multi-billion-dollar projects."
However, there has been more stability and confidence in light oil ó or conventional crude ó as well as natural gas, he added.
The cause of the continued question mark that looms over the recovery of the pre-crash price per barrel stems from a number of variables, including unpredictable OPEC policies regarding long-term production levels as well as the growing supply available in the U.S., he said.
"The real challenge now is that U.S. producers can continue to produce high levels of supply at low cost."
There are also concerns regarding the new U.S. administration's policies easing up on regulations and corporate taxes to spur more activity, which also has the potential to draw investment capital away from Canada, he said.
Additionally, the Canadian oil and gas industry is keeping a close eye on government policies and regulatory measures at home to see how new rules might impact the bottom line, he said.
While producers are on board with efforts to reduce emissions, they also want to work with government regarding climate change policies to mitigate the cost burden endured by the oil and gas industry, he said.
Summarizing the situation, he added the construction of new pipelines remains crucial because the continued long-term health of the industry depends on diversifying away from the current over-dependency on the U.S. market.
