besides dashing my hopes for a quick buck and punching calgary's skyline in the balls, i wonder what the oil bust in alberta will mean? the economist notes that one employment agency has received 50 applications for a single job, a job the nature of which, while unspecified, does not seem overly high-rolling. from what i've read, this crash has happened in alberta before--as it happens in every single extractive economy which is overly reliant on a single resource--and it was quite devastating: 90% of the rigs were dormant by '83, with unemployment well in to the double-digit range. as with everything that has characterized this past era, i suppose we can relegate this latest gold rush to the dustbin of history. calgary, we hardly knew ye.
and, in fact, the evidence that the slowdown will have seriously devastating effects is quite considerable. take this article from mid-2007, in which the author reports that oil and gas revenues had begun dropping dramatically: predictions put royalties for regular drilling at $815 million for 2009-10 and $1.1 billion for the tar-sands, down in each case from $3 billion and $2.3 billion, respectively. gas royalties were predicted to collapse by 50%. moreover, all of these projections were made when crude was over $60 a barrel and climbing. now that it's languishing in $30 territory without solid ground to stand on, it looks like alberta is, well, fucked, and, i suspect, canada will suffer along with it.
Subscribe to:
Post Comments (Atom)
Posts
Well guess what fellas (and fellettes): I GOT SOMEFIN' TAH SAY! How could I not? It would be rude.
ReplyDeleteOne thing that makes Calgary really bizarre is that people who have lived there for, say, more than 5 years are well aware of the boom and bust nature of the city. Saying "Calgary is a real boom-bust kinda place, amirite?" is the equivalent of "Gee, New York... kinda big" or "Man, Baltimore, you're a real shit-hole". Tell me something I don't know, brah.
But, despite all this, no one seems to do much of anything to prepare for a bust. I mean, even I could see this one coming: a super-rich, super-expanding city with an (almost) absolute dependence on the continued high price of one resource. How could things not go wrong? And when I was there two summers ago working, and there were simultaneous labour and housing shortages, and everyone who could afford to live there was so flush with cash they were buying six or seven kayaks at a time for no real reason, everyone was talking about a boom but doing nothing to prepare for a bust. I didn't see much in the way of saving, or attempting to diversify the economy when the diversifying was good (I did hear two cowboy boot-wearing fake drawl-having Patrick Bateman-types talking in a restaurant once about a half-handed effort to attract some high-tech start-ups, but as far as I know that went nowhere). The oil and gas industry, and those who suckle at its teat, may be the best example of short-term benefit thinking that has yet existed.