The well-being of a
nation
Oilsands sector investment slows,
but economic importance to Canada
remains strong
by Melanie COllisOn
Given all the industry changes and economic turmoil
since the Canadian Energy Research Institute (CERI)
published its report Economic Impacts of Alberta’s Oil Sands
in 2005, the organization is eagerly preparing to release its
ambitious update, Economic Impacts of the Petroleum industry
in Canada.
The University of Calgary-based CERI has been providing
objective analysis of energy and related environmental issues for
its government, academic, and industry members since 1975.
One prominent finding of the October 2005 report was that
the federal government, not Alberta, was the largest recipient
of oilsands revenues. The various kinds of tax streams flowing
in from communities coast to coast pointed clearly to oilsands
activity as a main driver of the overall Canadian economy.
That finding was helpful in deflecting some of the criticism
of the industry, and as CERI president and chief executive
officer Marwan Masri puts it, it demonstrated that “some of the
[public] perceptions may not be correct.”
The update, coming out in April, is to encompass the full
spectrum of petroleum industry sectors, and will likely clear up
more public misperceptions.
With its 20- to 30-year horizon, the update will take into
account recent rapid growth in the oilsands sector and oil price
jags. It will provide big-picture perspective on the current
contraction phase of the economic cycle that, for all the alarm
it has triggered, is allowing governments and industry a chance
to get their bearings and make course corrections.
“The economic cycles are not new,” Masri observes. “[It is]
the long-term outlook that investors have to take into account.
You don’t base investment on today’s short-term price.”
CERI has addressed the short term in senior economist
David McColl’s February briefing, The Eye of the Beholder: Oil
Sands Calamity or Golden Opportunity? McColl emphasizes,
“It is important—if not imperative—to recognize the current
opportunities in the oilsands. As investment levels plummet,
there are potentially staggering opportunities for current
oilsands operators and new project proponents to seek out and
source products—materials and equipment—at some of the
lowest rates that they may have seen in almost a decade.”
