Canadian energy group said industry spending is expected to drop to its lowest levels since record-keeping began in the late 1940s. File photo by Brian Kersey/UPI | License Photo
CALGARY, Alberta, April 8 (UPI) -- An energy group in Canada said it estimated the two-year spending trends in the oil and gas sector were at their lowest level in more than 60 years.
The Canadian Association of Petroleum Producers estimated capital spending in the sector is expected to decline 62 percent from 2014 levels to $24 billion, the largest two-year decline since record-keeping began in 1947.
"Canada needs urgent action to remain an attractive market for oil and gas investment, and to be competitive relative to other oil and natural gas producing jurisdictions," CAPP President and CEO Tim McMillan said in a statement.
The organization last year said it estimated more than 4,000 people would lose their jobs as a result of the downturn in the energy sector. A 2015 budget unveiled by the provincial government of Alberta, which sits at the heart of the Canadian oil sector, anticipated a $7 billion revenue shortfall.
In its latest estimate, the organization said more than 110,000 people across the country are out of a job as a result of the market contraction.
Crude oil prices have stabilized in 2016 at around $40 per barrel, though that level is about 60 percent below peak levels from two years ago. As a result, energy companies are designating less capital for exploration and production, the upstream side of the sector.
CAPP estimates that in the western part of Canada alone, the number of wells drilled should decline to 3,500 this year, a 66 percent decline from two years ago.
"Times are tough today in Canada's oil and natural gas sector, but the world will require responsibly produced energy for a long time to come," McMillan said. "Canada has the energy the world needs, and we can and should take action now, as a country, to ensure Canada competes globally and becomes the energy supplier of choice to world markets."
Canadian Prime Minister Justin Trudeau came to power in October, touting a green economic agenda that contrasted with his predecessor, Stephen Harper. In a November letter to lawmakers, Trudeau said "the clean jobs of tomorrow" would benefit the nation's middle class.