Oil and gas industries still have much to offer

There is reason for optimism despite current malaise, William Lacey writes.

For those who are old enough, there is the famous adage: “Please, God, let there be another oil boom. I promise not to piss it all away next time.”

That seems to be a common refrain these days. The pain has been real and has manifested itself through increasing unemployment rates, rising levels of personal and corporate insolvency, growing statistics of escalating suicide rates, domestic abuse and failed marriages. But the stark and harsh reality is that there is no mystical horseman on the horizon looking to ride in and save the day. Whether it is the closure of equity markets, the rising cost of debt markets, the increasing challenges associated with older assets, and the growth in “environmental” investing, the currents against the industry are real and they are here to stay.

It is time to tear off the Band-aid and move on.

No, there is not going to be another junior oil and gas boom in this province, and those businesses that are here are going to have to keep doing their jobs better and better, not only to maintain their existing shareholders but also because it is the right thing to do. Do I believe that the world is going to transition off oil and gas in the foreseeable future? Not in my lifetime. But the external focus on the industry is here to stay and we must be best in class in order to keep doing what we are doing. Moreover, though I think Alberta is going through a painful transition, oil and gas (and all its wonderful associated products) will remain a core part of our identity for many years to come.

Despite all the malaise and navel-gazing that is going on throughout the province, and the talk of separation and the angst being created from a disingenuous and dysfunctional relationship between ourselves and the current federal government, I am actually very optimistic about the opportunities that lie before us. This province has one of the best-educated workforces that anyone looking to start a business could hope for. We have a population that understands and embraces risk and is willing to roll the dice to create an opportunity. We were the trailblazers in raising venture capital, long before it became trendy to do so in The Valley, and it gave rise to the likes of Peters & Co. and Firstenergy Capital, which helped raise billions for those trailblazers. Yes, there is some retooling required, and it won’t be easy, but this is a province that does not back down from a challenge. Hell, we’ll embrace it.

Whether it is top-tier education from the likes of the University of Alberta and its world-leading research in artificial intelligence, to Google opening a Deepmind lab in Edmonton, to the cutting-edge work that has been done by the likes of the Creative Destruction Lab in Calgary, there are some tremendous things going on within this province. If you look, you will become aware of a whole plethora of opportunities that are fomenting just below the surface, looking for an opportunity to erupt.

Yes, we need to re-examine tax incentives to attract some of those next-generation opportunities. But tax incentives only reduce a burden; they don’t create an outflow, and they often come with other ancillary benefits. Remember, a tax incentive is only a benefit when you are in a position to pay taxes in the first place. An empty office generates nothing.

Fatigue has been a part of my world for the past five years and, to state the obvious, I’m tired of it. We must continue to advocate for an industry that operates under some of the highest standards in the world and that can play an important role going forward in terms of making a real impact on global clean energy needs while meaningfully contributing to Canada’s high living standards. But we must also start to look forward. We need to take that get-upand-go mentality and apply it to the next generation of Alberta, one that I hope my children will have an opportunity to be a part of.

William Lacey is the chief financial officer of Steelhead Petroleum Ltd.