Drilling and service rigs facing an existential crisis: CAODC

Image: Precision Drilling

The Canadian Association of Oilwell Drilling Contractors (CAODC) is disappointed and frustrated with the federal government’s decision not to accept all of the Senate’s amendments to C-69, as noted in a press release on June 13.

“Our members are facing an existential crisis and it’s unclear whether the federal government is ignorant or simply has a deliberate strategy to cause harm to the industry. This short-sighted decision will have lasting financial and social consequences for all Canadians,” argued CAODC president and CEO Mark Scholz.

Since 2014, the drilling and service rig sector has reduced the number of rigs in Canada by 600 or 40 per cent of the total rig fleet. Many of these rigs have been relocated to the United States or other international jurisdictions. The exit of this equipment has resulted in the permanent loss of billions in economic wealth and over 90,000 high paying jobs.

The enactment of C-69 will make building new energy projects nearly impossible, and will turn away billions more in investment and additional jobs in Canada. “The federal government’s record on energy pipelines has been a complete failure,” asserted Scholz.

The CAODC noted shortly after coming into power, the federal government vetoed Northern Gateway, a multibillion-dollar project with First Nation partnerships capable of transporting energy products to Asian markets.

The CAODC added that government didn’t stand up to President Obama when he vetoed the Keystone XL pipeline, which would have expanded access to the United States market. Then, as a result of regulatory uncertainty, Energy East was cancelled, and an opportunity to allow Canadians better access to domestic energy products was frittered away.

And finally, the government was forced into purchasing the Trans Mountain pipeline when a private investor became too exhausted with the political and regulatory circus, and unwillingness of the federal government to enforce its constitutional authority.

“The federal government quickly discards any economic headwinds as a function of volatile commodity prices, but that argument is growing old fast and doesn’t stand up to scrutiny. There is a simple reason why Canada is losing ground to the United States and that is market access and absent leadership. The government is handcuffing the most environmentally friendly oil and gas in the world, and opening the door for oil producing countries with poor human rights and environmental standards,” stated Scholz.

CAODC predicts more equipment, companies, and crews will be relocated to the United States due to regulations like of C-69. “The futures of the women, men, and families in our industry continue to be in jeopardy, and the federal government has made a bad situation much worse,” said Scholz.

— Pipeline News