AL­BERTA OIL’S YEAR IN RE­VIEW

Twelve months of his­toric low en­ergy prices, record un­em­ploy­ment in the oil patch and the most ex­pen­sive nat­u­ral dis­as­ter in Cana­dian his­tory. Here’s to 2016, the Worst. Year. Ever.

Alberta Oil - - CONTENTS - BY TODD COYNE

In Canada and around the world, 2016 will go down as one of the tough­est years on record for the en­ergy in­dus­try and its de­pen­dent economies. These are the sto­ries that mat­tered most in a year we’ d all like to for­get

THE YEAR 2016 WILL GO DOWN AS NOTH­ING SHORT OF A SAV­AGE STRESS TEST OF THE CANA­DIAN EN­ERGY SEC­TOR.

A year when cheap oil un­der­cut the na­tional economy and un­der­wrote a rise in petty crime; when the of­fice tow­ers of Cal­gary emp­tied faster than the sav­ings ac­counts of tens of thou­sands of laid-off en­ergy work­ers, and un­em­ploy­ment hit dou­ble-dig­its in Al­berta. And through­out it all came the warn­ing that the worst was yet to come— that although we were en­ter­ing an ocean of un­cer­tainty, we could still be cer­tain that our ship was go­ing down.

All the eco­nomic in­di­ca­tors at the be­gin­ning of 2016 were bad. In the realm of cli­mate and en­ergy pol­icy—both fed­eral and for­eign—the pic­ture was equally trou­bling for a Cana­dian en­ergy sec­tor that hadn’t caught an hon­est break since the sum­mer of 2014, when the col­lapse in en­ergy mar­kets be­gan. In short, it was not an aus­pi­cious start to the year. And be­fore the prom­ise of a spring re­newal could even rear its head, things in Al­berta went from bad to worse to—quite lit­er­ally—on fire.

Yet here we are. Up from the ash of early 2016’s en­ergy mar­ket im­mo­la­tion emerged a sec­ond half—a late-stage step to­wards re­cov­ery. A bar­rel of West Texas In­ter­me­di­ate, which be­gan the year sell­ing for US$36 and by Fe­bru­ary was trad­ing at a low of US$26, had by Oc­to­ber nearly dou­bled its value from eight months prior and was fetch­ing just over US$51. Nat­u­ral gas prices charted roughly the same Lazarus-like rise, jump­ing from US$2.33 per MMBtu on the NYMEX at the start of Jan­uary to fully one dol­lar higher by mid-Oc­to­ber. Still, many of the gains made in 2016 have proven short­lived. And while we have come far from the mar­ket’s cold win­ter bot­tom in Fe­bru­ary, the real test of its re­siliency—and ours—won’t come be­fore the new year.

AL­BER­TAOILMAGAZINE.COM

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