If you scan the newspapers these days, you will notice a lot of sky-is-falling stories, only with the word ‘oil’ instead of ‘sky’. Here in Alberta, news that the price of oil is falling is treated with Armageddon-like concern. The treasury is being depleted! Cuts are on the way! Jobs will be lost! Etcetera, etcetera!
Yes, we’re all supposed to be wringing out hands here in the oiltopia that is Alberta. Me? I’m chanting ‘How low can you go?’
I’m loving this. If that sounds greedy or selfish, well, maybe it is. But to me, an Alberta motorist, the falling price of oil means only one thing — less pain at the pumps.
As I write this, you can find gas for less than 85 cents a litre. About six months ago, the price was about $1.25 a lire. That’s a 40 cent a litre drop, which equates to a saving of $20 on a 50-litre fill. So this is good news, right?
Ah, wrong. It’s supposed to be bad news, because our treasury is addicted to oil revenues — about a quarter of our revenue comes from oil revenue — and we’re going to feel the DTs from royalty withdrawal. Outside of Alberta, our stock market is falling, and the dollar is dropping. Woe is us.
Or maybe, woe is you. I’m alright, Jack.
Here’s the thing. If the province doesn’t have as much money to squander, it impacts me not at all. My interaction with provincial government offices or services is so limited, I actually can’t think of any provincial service cutbacks that could impact upon me. I’ve unloaded my Canadian oil and gas stocks from my RRSP. I don’t travel outside the country, so the lower dollar doesn’t make any difference to me. Yes, I know some produce will cost more because of the falling dollar, but I can live with that.
I know that if oil stays low (let us pray) that the big oil companies will reduce investment in Alberta. But is that a bad thing? Thousands of people are pouring into Alberta looking for some of what sweet, sweet crude money. Is it a bad thing if fewer high school grads (if that) show up looking to drive trucks in Fort Mac?
Then there’s the borderline insane downtown building boom in Edmonton. Will a sustained period of lower oil prices result in a scaling back of the dozens of projects planned for downtown, if not some outright cancellations? Probably … and that’s not an entirely bad thing either. My feeling is that the Edmonton condo/office tower building boom has been based on the belief that $100 a barrel is here to stay. Welcome to reality, Edmonton.
The bad side to lower oil prices is more Big Picture stuff. If oil stays cheap and plentiful, there will be less reason to develop alternative energy sources. Regardless of the price, there will come a day in the not-so distant future when gas will not be the primary fuel for cars, and that will change the entire oil production picture. But that’s in the future. For now, enjoy the cheap gas. I know I will.