if you sell to one person and that one
person decides he doesn't want your
product anymore or as much of your
product you are at the mercy of what
that person wants you to do we're going
to be forced to sell to somebody that
already has enough Jason Ryan Holtz is a
motor hand living in Edmonton Alberta
and one of thousands of oil rig workers
who are currently out of a job
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these blue ones are the winter coveralls
there's a little bit worried yeah what
that smells you pretty much don't know
if you're shutting down until the day
that it's actually happening and
everyone's in panic mode think not
knowing what they're gonna do after it
sucks my hard hat there's a lot of
personality on this yeah when you're
shutting down everyone's kind of quiet
and thinking about what they're gonna do
after and thinking about how they're
gonna pay bills and there's a hundreds
of guys sitting around not doing
anything waiting for the call Canada's
oil men are feeling something of a boom
time hangover we visited Alberta and
what is normally a high season for
drilling just before the frozen ground
thaws
this time last year there were about 100
oil rigs operating in this area in Fox
Creek Alberta right now the read count
is down to about 35 the rest of the rigs
are in yards like this they're called
lay down yards right here behind me is a
derrick when it's standing spotting the
skyline around here normally it's about
a hundred feet tall the price of oil
being down companies aren't sure when
they can actually be out there making a
profit drilling for oil the price of oil
has dropped again to the lowest levels
in more than five years in late 2014 the
price of oil tanked along with Alberta's
economy this is the most significant
public financial circumstance that we
have seen in this province in a
generation crude oil is Canada's number
one export and 99% of that oil is sold
to the United States that's like having
one customer for your product which any
economist will tell you is a bad idea
in recent years the United States has
emerged as a major producer of oil in
its own right
following a revolution in controversial
fracking technology that amped up
production in the US has contributed to
a global oversupply of oil which is also
bad news for Canada it's caused some
frustration I think for other oil
producers that maybe did not anticipate
that the United States was going to
emerge as this global producer Canada is
one market for its oil and that is the
United States I think it really is about
finding ways out of Canada to meet other
markets until recently Canada's best
prospects for meeting other markets was
through the proposed Keystone XL
pipeline but it was vetoed by President
Obama in February after it became a
symbol of all that is wrong with
Canada's infamous tar sands I think
partially you had a strong and effective
environmental movement that was really
able to sort of draw attention to oil
coming out of Alberta that is considered
to be dirtier that is considered to be
much more sort of carbon intensive than
traditional oil what many people don't
realize is that there is a Keystone
pipeline that is just to the west of the
proposed Keystone XL that does bring oil
down from Canada via pipeline along with
the railways that other Keystone
pipeline is just one of many already
transporting 3 million barrels a day
from Canada to the United States other
proposals are now in the works to pipe
all that Canadian oil east and west to
Atlantic and Pacific ports in hopes of
reaching new markets in Asia and Europe
if in the next year 2 years US
production as many people believe
continues to increase an increase if
Canada doesn't have alternative markets
in place by then then it's it's not
necessarily a good position to be in the
United States is a stable market but
it's a decreasing market so Canada needs
to look at this as an opportunity to say
how do we position our industry to
succeed once we recover I mean right now
we should be very busy January we should
be seen our fleet at about 70%
utilization in January we were hovering
on 45% so on the direct side we'd be
looking at about 4,000 of our employees
but when you look at all the other
services that are responsible for
bringing a well up to production and are
associated with oil and gas activity in
Western Canada that number is about
23,000 so there's a lot of people that
are gonna be impacted by this drill rate
count is a pretty reliable weather vane
for the economy in Alberta this time
last year the count was 282 today it's
99 that's a 64 percent drop in activity
and the lowest rate count in over 20
years
while drilling is ground to a halt
production at existing wells continues
which seems odd given that demand is
down and profit margins are swimming by
the day we met up with a CEO of a small
oil and gas company who is keeping the
pump jacks going despite the pain of low
oil prices as the price fell it was a
bit like catching a falling knife we
plan to drill about between five and six
wells at the first half of the year that
was our budget was twenty million
dollars and after all of five or six
wells now we're doing zero how
significant is the dent in in your
pocketbook right now
well it's dramatic we were expecting
this year to be about five thousand
barrels a day for the whole year and we
were expecting somewhere between eighty
and a hundred million dollars so now we
we know that number is gonna be more
like 30 so less than half of what we
were originally expecting and that's
compounded because we're not gonna drill
any well so we won't maintain that 5,000
girls a date
I'm at the 1 of 20 battery we're tangled
Creek produces about 1800 barrels a day
and this is a PPE suit you have to wear
its flame-retardant and luckily it fits
over my parka because it is cold out
there Jason the Barsky is a field
operator for tangled Creek and oversees
the continued production of oil at one
of Glenn's batteries in spite of the
fact that the oil produced here isn't
fetching the profits they're used to if
you sell to one person and that one
person decides he doesn't want your
product anymore or as much of your
product you are at the mercy of what
that person wants you to do we're going
to be forced to sell to somebody that
already has enough and that forces
pricing even lower so why would well
still be in production when the price of
oil is down because we still have to pay
bills
the first quarter of 2015 has shown that
low oil prices have had a significant
negative impact on the Canadian economy
as the value of Canada's biggest export
plummeted the country reported a record
low balance of trade with a three
billion dollar deficit on top of that
federal and provincial budgets are
forecasting losses to the tune of
fourteen billion dollars as the energy
sector reels and adjusts another
potentially more significant sea change
has occurred at the political level
adding even more uncertainty to its
future the change has finally come to
Alberta Canada conservative Heartland is
now led by the left-leaning NDP premier
Rachel Notley have sent reassuring
messages to the sector following the
election saying it would be a okay under
her leadership
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at the same time her campaign promised
to withdraw the Keystone XL pipeline bid
raise royalties in oil and gas companies
and negotiate new climate policies that
is for Alberta there may be a new a okay
on the horizon
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you