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Toy stores are going to feel the pain of $45 oil

From the Top of the Pile
Brian Zinchuk

I was driving out to take some pictures of some drilling rigs Sunday morning when something struck me.

I left relatively early in the morning – early enough that I could get to the lease half an hour before sunrise so that I could attempt to get some sunset over the drilling rig pictures. As I left my driveway, I noticed a white pickup idling in front of a house down the block.

This was the revelation: that truck wasn’t idling to go to church. I don’t know of any churches that have sermons around 7:15 a.m. The truck was obviously being warmed up to go to work.

As I left Estevan, I saw a number of semis heading out, hauling pipe. The temperature readout on the dashboard said -27 C. The wind chill was around -39 C, a fact I was quickly reminded of when I got out of the truck to begin taking photos.

Where I was going, there were four drilling rigs lined up. They had been working 24/7 for days at this location. Between water haulers, pipe haulers, bit men, mud men, rig hands and land spreaders, there were dozens of people in and out of these four leases all weekend long.

While I was on the rig, taking photos, I don’t remember if I heard one complaint about the cold. I know I wasn’t too impressed with it. My cameras weren’t either, with lenses getting stiff and fogging up hard if I ventured inside to warm up.

In all of this, each of those four derricks had a derrickhand go up the stick in -40 C or colder wind chill (at ground level). I can’t imagine how cold it would have been up there.

These are the men, and it is almost exclusively men, who have been keeping Saskatchewan’s economy going. They’re the ones out there in horridly frigid temperatures on a Sunday morning when most sane people are snug in their warm beds. And with the dramatic drop in oil prices, these are the ones who will likely suffer the most.

Don’t get me wrong – they are well compensated when working. But it’s not unusual for a rig hand to get in only six months of work a year. I know this because some of them told me that. This year, they might be lucky to get that. Once the rigs lay down for spring breakup, they might not get going again until the fall, and that’s only if the price of oil recovers to something like US$65 per barrel WTI. If it stays where it is now for six months, or goes even lower, those rigs are going to stay racked.

A few days later I wandered through a toy store. It wasn’t full of Legos and Barbies, but quads, side-by-sides and snowmobiles. I almost fell over when I looked at the prices. Sleds were around $17,000. Side-by-sides were $24,000. One used quad was $24,000, and that was a bargain, because it only had 49 miles on it. Full list price was $28,000. That’s more than my wife paid for her 2009 truck, used, with 18,000 miles on it, five years ago.

I felt like I had walked into a Victoria’s Secret model shoot. The room was full of supermodels — beautiful, but entirely unobtainable to someone like me. But for young men with some decent money in their pockets, these supermodels indeed have been within the realm of possibility.

The reason these toys exist is because of the young men who have frozen their butts off want to spend some of their hard-earned money. When that money evaporates, so too will much of the sales for these toys.

With oil at $45 a barrel, there are going to be serious impacts in this province. Toy stores are going to be just one of them.

— Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].

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