President’s Notebook
MASTER APEGA
APEGA Confronts Uncertainty During Worst Downturn in Decades
BY DR. STEVE E. HRUDEY, P.ENG., FEC, FGC (HON.) FCAE, FSRA APEGA President
overall indicators like unemployment, conditions are roughly similar to those of the NEP. There are valid reasons to expect that the impact of these economic conditions on our professions will be worse and longer lasting than those of the NEP era. The presumed trigger for this downturn has been low oil prices, even though we experienced lower oil prices from 2002 to 2005 and again briefly in 2009 while Alberta was booming with oil sands expansion. For the purposes of comparing current conditions to the NEP, we need to acknowledge that Alberta’s total oil production in the early 1980s was only 35 per cent of that
Winter 2016 finds our professions facing the worst economic downturn in Alberta in at least 30 years. In many ways, current conditions and the prognosis going forward are more challenging than during the notorious National Energy Program (NEP) collapse of the 1980s, which those of us who were practising in Alberta 35 years ago remember all too well. The NEP was driven by a federal government policy aimed at the oil and gas industry before oil sands production was a major factor. The impact of the NEP was sudden and devastating on individuals, coming at a time of double-digit mortgage interest and inflation. A program that was supposed to shield Canada from international oil prices soon encountered a deep international recession. Canada-wide unemployment reached 13 per cent in December 1982. Despite having increased in population by more than 20 per cent from 1976 to 1981, Alberta had achieved essentially full employment before the NEP, then saw it become 11 per cent unemployment by 1984. How does our current economic situation compare? In October 2016, Alberta unemployment was at 8.5 per cent, up 1.9 per cent over the past year, according to Statistics Canada. This compares with Canada’s overall unemployment rate of 7.0 per cent, unchanged over the past year. Breaking it down further, in Edmonton in October 2016, unemployment was at 6.9 per cent, slightly below the national average, but up 0.9 per cent over the past year. In Calgary in October 2016, unemployment was at 10.2 per cent, up 3.5 per cent over the past year. We cannot be sure whether the Alberta economy has hit bottom yet, but based on
in 2015. Oil sands development was responsible for only about 12 per cent of total Alberta oil production in the early 1980s, versus over 80 per cent of the much higher production in 2015. Development and production of the oil sands are clearly more engineering intensive than development and production of conventional oil and gas. This suggests that the impact of the current slowdown on our professions is likely to be greater than was the case with the NEP. An international focus on reducing the carbon content of energy production and a North American campaign highly targeted against Alberta oil sands production have been major negative influences. This campaign, which fails to acknowledge that oil
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