There were positive signs for the energy sector in Saskatchewan last week.
The first was the quarterly drilling forecast update from the Petroleum Services Association of Canada (PSAC), which projects 2,794 wells will be drilled in Saskatchewan in 2017. The original forecasted number was 1,940 wells.
Of course, increases to drilling forecasts are always a good thing, but we do have to remember that the projected number of wells drilled is going to be much lower than the glory years of a few years ago.
The other good news came with the provincial land sale for August, which generated $8 million. Three-quarters of that total came from southeast Saskatchewan.
Again, it’s a good number, but we don’t want to be too excited.
Perhaps the most encouraging development came with the start of construction on Enbridge Pipeline’s Line 3 replacement. Line 3 begins in Hardisty in northwest Alberta, cuts across Saskatchewan and continues all the way to Wisconsin.
This pipeline is obviously great news for the energy sector. The energy sector needs more pipelines to get our oil and gas to market. While it appears that Keystone XL is finally going to go ahead in one of the few things that U.S. President Donald Trump actually has done right, our government pulled the plug on Northern Gateway.
And with the unelected New Democratic Party/Green Party coalition in B.C., it puts the Kinder-Morgan pipeline twinning at risk. Even if that government is in power for the short-term, they won’t need long to halt a project many in both parties have loathed from the outset.
And who knows if the Energy East pipeline will ever get the green light. That project appears to be in limbo, and we wouldn’t be surprised if it eventually joins Northern Gateway among mothballed pipeline projects.
The government obviously can’t just approve every pipeline project that comes along. These projects have to make sense. And the Line 3 replacement makes sense. Not only will it help with the energy sector, but there will be an economic spinoff as well.
The replacement of this pipeline will create jobs for those in the construction sector. It will be good news for Evraz Steel in Regina, who will be supplying the steel for the pipeline. It will be good news for communities along the pipeline route, who will benefit because people working on the pipeline construction will spend money in their restaurants, hotels and other businesses.
And it will be good news for the provincial and federal governments, because when people are working and the oil and gas sector is gaining, the governments stand to benefit.
The last three years have not been easy for the energy sector. Victories have been few and far between. Companies have shut down and jobs have been lost.
When victories have been attained, they have still often been accompanied by a setback.
There have been signs of a recovery over the past year, but companies in the energy sector are now having trouble finding employees, and frankly, who can blame former employees for being gun-shy?
So hopefully they will celebrate this victory with the Line 3 replacement progressing. They won’t be the only ones.
