After a week of stampeding, Marg McCuaig-Boyd starts to sound like many Calgarians. Alberta’s energy minister is hoarse as she’s beginning to lose her voice.
But the Calgary Stampede isn’t over and she’s back at a podium, this time talking up the renewed spirits of those in the oil and gas sector.
“I just asked two or three people how do you feel things are compared to last year? Everybody is agreeing that things are up,” said Boyd, speaking at an Alberta Energy open house in the city’s downtown.
She lists off the improved fortunes of the sector. Oil prices are up, oil and gas production is climbing, and more jobs are returning to the oilpatch.
“So I think there is good reason to be happy this year,” said Boyd to the crowd.
‘Everybody having fun’
With a provincial election coming next year, critics will say the minister’s optimism is tinged with politics. But there’s little doubt that some of the gloom that’s hung over recent Stampedes is lifting.
After the oil price downturn of 2015 and 2016 followed by the start of the recovery in 2017, Calgary is much more festive this summer compared to recent years. Patios are full, corporate parties are plentiful and people are spending money.
Anecdotally, that’s the consensus.
Rodney’s Oyster House general manager Bradley Conrad is planning for a daytime event with a few DJs and he expects 700 people will come through the doors of the restaurant. These 10 days of the Stampede make up 60 per cent of the restaurant’s business for the entire year.
“It’s a big injection to the whole city of Calgary. It spikes big time,” said Conrad. “Everybody having fun, everybody making money. We love it.”
David Howard, who has worked for years organizing Stampede parties as the president of The Event Group, said with some satisfaction Friday that the last week has been “madness.”
“It’s been really enjoyable,” Howard said. “The economy is doing better and we see that through events.”
He said the parties may not be as big as in the boom’s heydays, but some of that is about managing both costs and optics coming out of a difficult downturn.
People are even talking about Christmas parties already, he said.
“The oil and gas community is coming back but we’re seeing new players,” Howard said.
“We’re seeing the tech industry.”
The oilpatch’s rough ride left plenty of scars, but there’s many reasons these days to celebrate and raise a drink. During the Stampede, it’s often many drinks. And kegs.
Besides the uptick in oil prices and production, there is movement on the pipeline front. Enbridge recently received regulatory approval to replace Line 3 and construction will begin shortly on expanding the Trans Mountain Pipeline.
Murray Mullen, chairman of Mullen Group, hears a lot more optimism in the oilpatch these days. His Okotoks-based company provides specialized transportation and related services to the energy sector.
Mullen said the improving mood isn’t just because the oil price has climbed over $70 US per barrel, although that’s part of the story. The improving employment situation — following years of layoffs and bad news — is a big factor, he said.
“The mood is way better because the job market is more robust,” Mullen said.
“And that, to me, is the primary reason why I think people are more optimistic. They’re just not afraid of companies coming down and saying: ‘I’ve got to cut.'”
Mullen said the flow of money into capital markets has not matched the flow of jobs — not yet.
Still, Mullen’s optimism for the energy sector is reflected in his company’s spending.
In the past few weeks, Mullen Group acquired two Alberta-based oilfield service companies.
“We’re deploying capital in the oil and gas business now again, which really we hadn’t done for five years,” he said.
Not all sunshine
Despite the boost in spirits around the industry, the mood is still a stark contrast to the boom periods in the last two decades. The feeling inside Alberta’s oilpatch is also much more subdued compared to the scene south of the border these days.
“Absolutely. It feels completely different,” said Manuj Nikhanj, co-CEO of the RS Energy Group, on the sidelines of the energy research firm’s Stampede event for clients. “I travel to the U.S. all the time and if you’re a company that’s active in the Permian basin [in Texas], you’re high-fiving quite a bit.”
The mood in Calgary really depends on who you ask, said Nikhanj, considering natural gas prices remain troubled and the investment climate is gloomy because of the ongoing oil export pipeline constraints, for instance.
“If you are speaking with investment clients, they are still really shying away from investing in Canada,” he said.
Not all the head winds have dissipated in Calgary, either.
Many downtown offices remain vacant and the competition for white-collar jobs — positions like geologists, engineers and IT professionals — continues to be fierce among those who were laid off.
Some of those workers describe the current mood as “reluctant optimism,” not wanting to get their hopes up too high even as the prospects for the sector improve.
Mike Tims, vice-chairman of Calgary-based Matco Investments, said the energy sector still faces challenges, but he’s seen more enthusiasm in the oilpatch as the price of crude has improved. There’s also hope that plans for a $40-billion liquified natural gas plant will get the green light in the coming months.
“We’re not back to the levels we were at in 2014,” said Tims, but “the outlook is positive.”