Resource World Magazine

D E C E M B E R / J A N U A R Y 2 0 1 9 www.resourceworld.com 71 OUTLOOK 2019 tor," said Ben Brunnen, Vice-President oil sands and fiscal policy for the Canadian Association of Petroleum Producers (CAPP). He said potential investors look for positive indications from government before committing funds to any sector, and those messages are missing from the Canadian oil and gas landscape. "Investors go where the money is and our govern- ment is dithering on oil and gas instead of being positive about it." Reaping that investment benefit is the United States, which in 2017 saw a 38% increase in oil and gas sector invest- ment – $140 billion – while investment in the Canadian sector dropped 19% to $46 billion – the fourth year of declining investment and a drop of 30% since 2014 – according to a recent CAPP report. Experts predict 2019 will bring more investment decline in Canada. "The federal and provincial govern- ments are sending signals that undermine competitiveness," said Brunnen, referring specifically to the carbon tax but stress- ing that measures are needed to help the Canadian industry compete with the US, and that will require provincial govern- ments to improve their regulatory systems and afford access to resources. There is potential for improvement but likely not until 2020, he said. "Government tries to pass the buck. There's no acceptance of responsibility for where we are today," said Mark Scholz, President of the Canadian Association of Oilwell Drilling Contractors (CAODC). "They don't deserve all of the blame but a very significant portion of it, due to com- placency and lack of leadership. "They need to acknowledge, 'we got this wrong'." For Canada, most of 2018 was a low period. "The reality is that Canada is in a lower for longer period of capital restraint …And we're lacking political leader- ship," Scholz said, stressing that a down point was the passing of Bill C-69 in the House of Commons, leaving only the hope that the Senate will "put the brakes" on the legislation. A high point, he added, was the election of 'allies' in Doug Ford's Conservative government in Ontario, which he said will offer "a louder voice of common sense policies" recognize the need for a good business climate and push back on the federal carbon tax. Scholz predicted 2019 will see more of the same. He noted that in 2014 the land- scape saw 900 oil rigs working along with 1,200 service rigs, while today there are only 600 rigs and 950 service rigs. "Three hundred rigs have disappeared from our market and the scariest thing is that 20 of our most technologically advanced rigs have left for the US market, and some com- panies have moved stateside. Businesses and investors are moving away." Scholz said the solution will require support for the industry from national and provincial political leaders to help the sector expand and succeed as a long-term asset. "Instead we constantly hear about catastrophic climate change and energy transition and that language is not help- ful." He also said the focus needs to shift from domestic emissions and instead show that Canada can play a leadership role in worldwide emissions. "If we really care about reducing emissions, Canada has to play a role." Four years of negative earnings for 100% of CAODC companies is unattractive for investors and there's no indication that will change anytime soon, he said. Wages have not increased for 3.5 years, leaving a frustrated and dwindling workforce, an erosion of talent and businesses shutter- ing. "This is the reality we're in," he said, as Canada joins Venezuela as the two coun- tries most unable to capitalize on oil and gas recovery. Scholz said it's time government exam- ined the regulations being put on the industry, which he said have "decimated" the sector. That means a full-scale regu- latory review that can achieve desired outcomes at a cost the industry can bear. "Nobody's asking for things that will

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