Monday, May 09, 2016

Oil sands and the fire

How bad will the fires in Fort McMurray hit the economy?

Interesting report in Macleans notes this:

There is also the risk no one wants to talk about just yet: the possibility that a return
to business-as-usual in Fort Mac may simply not be in the cards. Allan Dwyer, an assistant professor of finance at Calgary’s Mount Royal University, says the wildfire is merely the latest wound to be inflicted on the oil sands and its future—and therefore Fort McMurray’s as well.
In addition to a depressed global outlook for oil prices, the current list of headwinds facing the industry include the  fractious political debate over building more pipelines, mounting concerns about the impact on climate change and recently elected provincial and federal governments that promise economic diversification. “A few years ago, when oil was trading around US$110 a barrel, there would be no doubt about it being an all-hands-on-deck approach to rebuilding and getting people back to work,” Dwyer says. “Now it could be a different response.”
Dwyer also wonders how many homeless oil sands workers will be eager to return to Fort McMurray and rebuild given the doom and gloom that hangs over the sector. “There’s been a growing sense, as the global oil prices has gone down and stayed down, that the oil sands is
somewhat of a sunset industry—that it’s yesterday’s aggressive style of producing hydrocarbons,” Dwyer says. “This only adds to that creeping negative sentiment.”

No comments: