Sask’s oil capital feels the pain

If you want to see the full impact of the plunging price of oil and how it’s hitting Saskatchewan’s economy these days, this is the right place.

Just as Estevan was at the heart of Saskatchewan’s economic boom, the self- styled Energy Capital of Saskatchewan is now the epicentre of the province’s economic slowdown. Nowhere in Saskatchewan has the slowdown in the economy — the transition from boom to bust — been more pronounced or rapid.

Mayor Roy Ludwig, who served on council for 22 years and the last four years as mayor, says almost overnight the prevailing attitude has changed from buoyant optimism to hunkered down “survival mode.”

“There’s somewhat of a general malaise out there right now,’’ Ludwig said in a recent i nterview. “The people who do have jobs feel very fortunate and they do feel sorry for the ones that don’t.’’

The downtown shopping district and the suburban shopping malls, the hotels, restaurants, bars and coffee shops, are a lot quieter than they were even just a year ago.

Of course, Ludwig, who’s worked in the nearby coalmines for nearly 40 years, argues that things could be worse — a lot worse — if not for Estevan’s other energy source: coal and the province’s largest coal- fired generating station, Boundary Dam Power Station. “We’re more fortunate than some, that’s for sure.’’

Below the mayor’s office and council chambers is Manpreet Sangha’s office. As the city’s economic policy and research analyst, Sangha has all of the facts and figures about Estevan at her fingertips: 75 building permits valued at just over $ 11 million were issued in the city of 13,000 in 2015, a sharp drop from 157 permits valued at nearly $35 million in 2014.

The city’s transient population — mainly young single males working in the oilpatch — has vacated the city. “Even full- time permanent workers have been laid off, so that’s another big thing that has happened in our economy,” Sangha said.

Meanwhile, some large oil companies have shut down their branch offices, while some service companies have simply laid off their crews when the drilling activity dried up.

One oilfield service company that’s hanging in is Prairie Mud Service, which has been providing drilling mud services to the southeast oilpatch since 1957. Owned and operated by 79- year- old Ray Frehlick, Prairie Mud has ridden the oil industry’s peaks and valleys for close to 60 years.

Frehlick, who has had to let go some employees, said this oil slump is different from past downturns. “Today, it’s an oil glut generated by OPEC and Saudi Arabia. We have the most oil in storage since records were kept.’’