Crude Glut Starving Out Alberta Jobs
Amy Tucker, Staff Writer
Global energy markets are more connected than ever before and over production of crude oil coupled with lowering demand means jobs will continue to decline. Right now, it appears there is nothing Alberta can do to stop it.
Ariel Cohen, Founder and Director of the Center for Energy, Natural Resources and Geopolitics, explained in a presentation at Mount Royal University that tremors from one disruption in the entanglement of energy markets will be felt throughout.
That’s why when global oil production soars to a jarring rate – up 400 per cent in just five years – and demand in the world’s largest markets slows, the Alberta work force takes a blow to its energy sector.
Already the price of oil is at a near historical low. At $20 per barrel, its lost a third of its worth in just one month. Yet while too much product has caused staggering prices and the resulting job losses, Cohen said that global production is expected to continue rising.
“What we are looking at today is a glut,” said Cohen.
One possibility of absorbing the glut in Canada, says Cohen, is to begin exporting to emerging markets such as China and India before another nation does.
However, the possibility of quickly turning around Alberta’s dire economic situation would be a tragic alternative.
Cohen said that violent conflict — a “major shooting war” between Saudi Arabia and Iran, according to him — would be required to cause an interruption of oil flow, creating higher demand and thus improve job prospects.
The conventional wisdom, however, is that there is no way of knowing what the turn of prices will be.
“Nobody is willing to speculate what the future holds for oil and gas prices,” said Cohen.
If this conventional wisdom is true, then the future of Alberta’s recovering job market remains up in the air.