Canadian natural gas- and oilfield activity will start making a comeback in 2017 after two severely depressed years, the nation’s service companies predicted today.
A 2017 forecast by the Canadian Association of Oilwell Drilling Contractors (CAODC) projects a 31% increase in wells to 4,665 from the 2016 hard-times low of 3,562.
The CAODC called the improvement just “a modest uptick” that only begins a return to the industry’s fat years of US$100/bbl oil and healthier gas prices. The forecast 2017 Canadian well count would still be down by 58% from the 11,226 recorded in 2014.
The anticipated improvement is credited to stabilization and potential firming of commodity prices next year as opposed to their long slide and recurring spells of stormy volatility since mid-2014, plus efficiency gains driven by shrunken revenues. But the low on the energy price cycle is not the only obstacle in the way of a full recovery, CAODC president Mark Scholtz warned in a state-of-the-oilfields review Tuesday titled Can We Trump the Status Quo?
Scholtz urged Canadian industry and government leaders to follow the example of change foreshadowed by the presidential election in the United States -- and to be prepared for heightened competition from an American energy sector rekindled by President-elect Donald Trump.
The CAODC recipe for recovery combines improved commodity prices, new pipelines, reducing the influence of anti-fossil fuel interest groups, and dropping Canadian plans to march in step with eco-organizations by imposing provincial and federal carbon taxes. “Our responsible, ethical, world leading industry is at risk of being permanently damaged by an orchestrated attack from radical environmentalists,” Scholtz wrote.
“There is a role for Canadian oil and gas in global markets even though the world will continue to shift toward renewable and lower carbon energy forms and as clean technology evolves over the coming decades. Canada’s role should be to offset and displace environmental laggards in oil and gas,” he added.
The CAODC president warned, “The Canadian oil and gas industry has an uphill battle ahead even with a recovery in the price of oil.”
But provided federal and provincial authorities respond well, starting by cooperating with the proposed revival of the Keystone XL export pipeline, “the election of Donald Trump...could be seen as a huge opportunity for Canada,” Scholtz wrote. “Our prime minister [Justin Trudeau] should be using his first meeting with the new president to reinforce Canada’s support for North American energy security which requires Canadian oil to have greater access to the US market.”