Oil prices could impact city's bottom line

By Ashley Wiebe
November 19, 2018 - 5:09pm Updated: November 19, 2018 - 7:08pm

 

MEDICINE HAT, AB — Premier Rachel Notley believes the price gap in oil is a real and present danger to the country’s economy.

On Monday, she appointed three people to a special envoy, in hopes they’re able to find a way to close the oil price differential, but the mayor of Medicine Hat said it’s ‘too little, too late’.

Mayor Ted Clugston is very supportive of a pipeline and said he wants more people to understand the science behind them, instead of joining protests to stop them.

He said our oil needs to get to the waterways and rail isn’t fast enough.

Clugston knows how many people in the city make their living on natural resources and understands that impact, but he isn’t convinced the envoy is the solution.

He said it’s too little, too late and when the price of oil is this low it’s not just having an impact on one city or one province.

“It’s ridiculous,” he said. “It’s so unfortunate, not just for Albertans but for all Canadians, that this is happening and of course the city of Medicine Hat, I mean, we are a major, more dominantly a gas producer. However, we do have a material oil fields as well-being and it does affect our bottom line.”

Jonathan Stringham with the Canadian Association of Petroleum Producers said the impact the price per barrel could have is huge.

The manager of fiscal and economic policy said many Albertans automatically start thinking about the province’s deficit and how sunnier times were predicted in the last budget.

Stringham said these prices will have some impact here with drilling projects in southern Alberta and how light oil is being transported by rail, but more will be felt in the oil sands in the northern regions of the province.

“The average, break-even price for a lot of projects is around that and even slightly higher than that and so they’re effectively breaking even on that barrel or making no economic rent on each of those barrels,” he said, over the phone from Calgary.

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