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Albertans rallying for solutions to oil industry woes

Last Updated Dec 17, 2018 at 5:32 am MDT

EDMONTON (CITYNEWS) – Thousands of Albertans are voicing their concerns nearly two weeks after the province announced the planned curtailment of oil production through all of next year.

Fears continue to swirl in Alberta as an economy-driving industry struggles to remain afloat; many people have been forced out of work due to massive layoffs and cutbacks. At least two major Sunday and Monday are aiming to draw attention to just that.

Organizers of a pro-pipeline rally in Grande Prairie saw 1,500 people attend the event on Sunday afternoon. According to the Facebook event page, upwards of 600 tractor trailers participated in a convoy at the rally as well.

“People are frustrated, people are concerned, and people scared. And they should be!” shared co-organizer Taylor Horwath, who was inspired to get other Albertans out after a rally in Drayton Valley drew more than a thousand people about two weeks ago.

After that rally, nearly 7,000 letters were dropped off at the Alberta legislature to be sent on to Prime Minister Justin Trudeau. The organizers of the Grande Prairie rally say they also received some 10,000 letters to be forwarded on to Trudeau from concerned Albertans.

“We want to be positive. We don’t want to talk about how we got here, we want to talk about how we’re going to get out of this mess,” added fellow co-organizer Cole Murphy. The B.C.-native says he doesn’t understand why there’s a distaste in Canada for Alberta’s oil when production here is more ethical and regulated than oil coming from other countries.

“Canada purchases oil from overseas and I can’t for the life of me understand why. We have the resources, we do it cleaner, we do it better, and we do it more efficiently and we’re buying off of someone else that doesn’t hold themselves to the same standards that we do.”

Murphy and Horwath work for a service rental company that has a strong connection to the energy industry. They fear they will be laid off in the near future, joining the hundreds of thousands of people who have also been laid of from the oil and gas sector.

PHOTOS: A look at the Grande Prairie Rally

 

“If we keep making it hard to do work here and invest here, everyone’s going to be out of a job. And that doesn’t just affect us oil and gas guys–that affects the restaurants, the car dealerships,” said Murphy.

The pair says there’s been an overwhelming response and an outpouring of support. They say their phones have been ringing “off the hook” with people asking how they can help.

“It means a lot and it means people care,” said Murphy. Premier Rachel Notley spoke in the city Friday and was greeted by a crowd of protesters. Murphy says recent action from the province is too little too late.

“I feel like there’s a lot of pandering right now, which is understandable. I understand they have to try. I just wish they would’ve started trying three years ago instead of three months ago.”

Murphy calls the curtailment a good start but he doesn’t see it a long-term solution. He also asks other provinces using Saudi oil, “if you call Alberta oil dirty, what would you call Saudi oil?”

City Councillors to join Calgary oil rally

Meantime, Calgarians are expected to come out in droves on Monday for another rally.

The rally at City Hall is hosted and organized by Canada Action, which is the volunteer-run group behind other pro-oilsands campaigns like the Lush boycott and a speech this week by Vancouver-based writer and researcher Vivian Krause.

The rally could see nearly a thousand people show up around the noon-hour with interest in and RSVPs on the Facebook event growing. The event page also says the entirety of city council will be on hand during the rally supporting pipelines and the energy sector.

Ward 4 councillor Sean Chu posted a video to his own Facebook page openly voicing support for the oil industry, saying he’s long been an oil ally.

“Times are tough, and we know the anger, and frustration that is out there,” he wrote in the post. “I encourage you to email and call your MPs and Senators to let them know that our energy sector needs help, not more talk and barriers to tidewater. Let us get Canada working again. ”

The video goes on to say a pipeline is needed to create jobs, attract investments, and equalize all parts of Canada.

“I support Canada’s oil and gas industry because I am Canadian.”

A similar video from Ward 2 councillor Joe Magliocca was posted to Twitter via  with a tweet that reads “I appreciate the massive contribution our energy industry makes to our local and national economy.”

Ward 1’s Ward Sutherland, Ward 3’s Jyoti Gondek, Ward 5’s George Chahal, Ward 12’s Shane Keating, and other councillors all sharing similar sentiments on social media.

Suncor concerned ahead of curtailment

While Albertans call for action, one major player in the oil industry is fearful of “unintended consequences” that could come from oil curtailment, including increased safety hazards for its employees.

Suncor made that warning on Friday in a release. Canada’s largest integrated oil and gas company forecasts its production will grow by 10 per cent in 2019 on a stand-pat capital budget of between $4.9 billion and $5.6 billion.

The issue has opened rifts in the Calgary-based oilpatch with companies like Suncor, Imperial Oil Ltd. and Husky Energy Inc. opposed to curtailments which are supported by bitumen-weighted producers like Cenovus Energy Inc. and Canadian Natural Resources Ltd.

The cuts announced by Notley earlier this month are intended to bring industry output in line with pipeline capacity to drain trapped oil from the western Canadian market and reduce resulting steep discounts for crude oil.

WATCH: Pipelines are pipe dreams at first ministers meeting

Suncor says it is largely insulated from low local prices by its Canadian upgrading and refining assets and firm pipeline contracts.

“In the short-term, the government of Alberta action has resulted in winners and losers in the market, shutting in valuable upgrading throughput and has made transporting crude oil out of the province by rail uneconomic,” Calgary-based Suncor said in a news release.

It added it is co-operating with the government and the Alberta Energy Regulator and working hard to minimize associated contractor layoffs.

Suncor said it will suffer from a “disproportionate allocation” of production cuts, adding its budget assumes the curtailments will be in place for three months before falling to 30 per cent of initial levels for the remainder of 2019.

In an email, Suncor spokeswoman Sneh Seetal wouldn’t reveal the company’s cutback number for competitive reasons.

But she said it fails to properly consider the uneven historic and recent performance of Syncrude (the oilsands mine and upgrader in which Suncor has a 58 per cent interest) and gives only partial consideration for the fact that Suncor’s new 194,000-bpd Fort Hills oilsands mine did not have a full year of production in 2018.

Throttling back production during the coldest months of the year, when it typically operates full-out without stopping for maintenance, could increase risks to safety and reliability, the company warned.

“Suncor will not put the safety of our employees and contractors at risk,” it stated.

Mike McKinnon, spokesman for Energy Minister Marg McCuaig-Boyd, said the province’s decision to curtail production was a difficult but necessary one to prevent job losses in the industry.

“We take concerns about safety and long-term resource stability very seriously, and have been engaged with Suncor and other companies on a daily basis to understand these challenges,” he said in an email.

He said the province is working with companies on how much they must cut through an AER review panel and has made temporary adjustments to curtailment thresholds for companies facing higher reductions.

Suncor said the cutbacks will result in higher operating costs per barrel, could affect the supply of crude oil to Alberta upgraders and refineries, may raise issues with its contracted pipeline commitments and could cause problems with the in-house consumption of diesel produced at its oilsands mines.

The company said it expects average upstream production of 780,000 to 820,000 barrels of oil equivalent per day next year, up from about 730,000 boe/d in 2018.

Suncor’s guidance matched analyst projections, with researchers at Tudor Pickering Holt & Co. saying in a note it is “the ‘just right’ bowl of porridge for an uncertain outlook.”

-with files from the Canadian Press, Crystal Laderas, and Sarolta Saskiw