Bolstered by improving oil prices, it appears the province is getting back to work, however, there is untapped potential in the valley.
The Drumheller-Camrose region, according to Alberta Labour Force Statistics, is leading the province with a 4.5 per cent unemployment rate, down from a year ago where it was hovering at the 7 per cent rate.
Gordon McKinnon who has worked in energy services for many years shared with The Mail some of his insight from the local industry. He says he has seen some recovery, but it could be better.
“From an oil field standpoint, I think oilfield activity has gone up fairly substantially, and I think on the horizon there is lots of positive talk, much more than in 2016 and 2017,’ he said. “I think everyone is waiting with bated breath to see what happens with our government situation.”
He says Drumheller is in a competitive market, but after years of a slumping industry, many of the former players are no longer around.
“In Drumheller, we suffer a lot from the Brooks and Red Deer markets. They are very well serviced as far as oilfield services, so they can supply the whole package of equipment, whereas Drumheller has been decimated to the point that our services are down so much, the community doesn’t have much to offer as a whole. It makes it hard to sell Drumheller as a centre where you can get whatever you need.”
Drumheller CAO Darryl Drohomerski says they have seen more activity in the last four or five months in the industrial area, but it not back to the levels before the downturn.
“We have seen more applications and more drilling going on in the valley and on the edge of the valley and some battery sites,” he said. “It is definitely an uptick from last year.”
Brad Peake has been in the industry for many years and while there has been some local recovery, the valley is hampered by a lack of services.
“I’m not overly optimistic, there has been some pick up but I wouldn’t say it is anything ,” he said.
He explains that for producers during the downturn they were able to reduce expenses to remain viable. The one expense they haven’t been able to shake is land taxes and surface leases.
“I personally think when those become too much you need to say I can no longer keep my doors open,” said Peake. ‘That is the top two costs that industry is looking at.”
“It hasn’t hit yet but the counties are going to have to find a new source of revenue in the next decade to replace all of this.”
McKinnon adds that while things in Drumheller are not as busy as other parts of the province, many from Drumheller are taking their expertise on the road.
“Lots of people connected to me are now working up north on a rotation, whereas before they were home every night before it fell apart. The north side of the province has been enjoying relatively good activity even through 2017, they bounced back pretty well, whereas Red Deer South it hasn’t been that way.”
While oil has recovered, natural gas prices are still soft.
“We have such an abundance of natural gas, but we still really haven’t’ come to terms with exporting it due in large part to governments that don’t have the resolve,” he said.
McKinnon points to the Duvernay Play in central Alberta having potential to boost the industry. He says a portion of the play runs from Red Deer South and borders the Drumheller area.
“There is lots of talk about that, it is going to be a pretty major source of activity should conditions be right, and oil prices are decent,” he said. “I hear lots of company guys saying it is supposed to be really good.”