In Search of Prosperity: The role of oil in the future of Alberta and Canada
What does the future look like for #Alberta’s oil sector? Is a thriving oil sector even possible, given market realities? #abpoli
Alberta’s oil sector has been an economic workhorse for decades; as of 2019, it was contributing CAD 68 billion to the province's economy. But its long-term outlook is bleak. #abpoli
By 2030, market forces & geopolitics will drive a long-term decline in the AB oil sector—potentially causing 20,000 job losses annually. Public support to the sector is a poor investment. #abpoli
The long-term market outlook for Alberta's oil sector is bleak. By the end of this decade, a combination of market forces, international climate policies and geopolitics will push the sector beyond a tipping point and drive its long-term decline.
This is new. The oil sector has never experienced an outlook like this, in which demand and prices fall without prospect of recovery—and its decline, beginning by the end of this decade, will put Alberta’s economy to the test.
Modelling for low oil prices shows material drops in provincial GDP, royalties, and employment from the oil sector. However, price volatility poses a much greater threat than low prices to the Alberta economy. When we apply the kind of price volatility that we’ve seen over the last 37 years to the next 30 years, the damage to Alberta’s economy can be more than five times worse in our modelling.
This is a dynamic that standard economic projections ignore.
A prosperous Alberta will need to depend less and less on the oil sector, at least in so far as production of oil for combustion. Governments should target support and investments at diversification, new growth opportunities, and a just transition for workers and communities.
Read the report, then join our event: Oil and The Future of Alberta's Economy.
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