Over the past 15 months, Dave Malone has seen his Red Deer-based oilpatch service company go from 62 employees to 28.
The “president, owner, chief cook and bottle washer” of Rezone Well Servicing Ltd. admits the company is struggling at the moment, but after 42 years in the business he’s quite familiar with its cyclical nature.
“This ain’t my first barbecue at these slowdowns and it’s always a ripple effect.”
Oil and gas service companies have been suffering revenue loss for five quarters and it’s starting to affect restaurants, hotels, shoe stores, “All the way down the line … they will feel it this year,” Malone said Wednesday.
“It’s always been like that.” It’s worse, he said, “for the people who thought the rainbow didn’t have an end to it.”
Over at Predator Drilling Inc., another local oilpatch company with about 30 employees right now, personal sacrifices have been made as they have collectively taken wage reductions to help the company remain viable, marketing co-ordinator Merlyn Ness said.
The two companies are among a number involved in the oil and gas industry that have climbed on board a unique national campaign launched by the Canadian Association of Oilwell Drilling Contractors recently.
Oil Respect is aimed at gathering vocal support for the industry from Canadians, explaining the important role it has on the entire economy, getting government support for pipelines, and pushing back against misinformation.
A number of Central Alberta oilpatch companies that have recently sent Oil Respect letters out to media.
Malone and Ness echo each other when they say that while they don’t have any control over the collapse of oil prices — an estimated 100,000 jobs have been lost during the current downturn — the ongoing issue is needed infrastructure, such as pipelines, to get product to market.
“We need pipelines. We need another customer besides the U.S. and Eastern Canada,” said Malone. About 97 per cent of Canadian oil is sold to the U.S.
“Oil and gas is not going to disappear. Not in my lifetime. Maybe in my grandkids’ it’ll dwindle out. … Our biggest thing is that Eastern Canada and a lot of the people that are grandstanding are uneducated. They don’t know how well Canada does for its environmental footprint.
“To give you an example, we had to move some equipment out of an area by Valleyview because the trumpeter swans are coming in to nest. There’s so many little things like that that rest of Canada doesn’t know. So right away we’re dirty oil.
“They don’t realize all the costs and programming before a well is even drilled.
“We’re regulated to death here. … You won’t believe what we’ve got to do just to move on the highway safe, to training our people, to no spills, to upgrading our engines. … It’s not a cheap industry.”
Malone said that those companies that have been in the industry a long time and didn’t leverage themselves too much will be okay.
“I’m thinking I’m in that ballpark too. It’s just when you run a small company, it’s your family. And to lay off a person that has a family, that’s one of the toughest things I’ve had to do.”
Over at Predator Drilling, Ness said the industry has faced challenges before. “It goes through these cycles and so (Oil Respect) is about — especially in this new environment politically, economically — how do we stand up and put the industry … more into the language.
“It’s a counter stance to the criticism by celebrities or politicians … Let’s make sure that we’re dealing with facts. Let’s make sure that we’re raising the flag for the industry and the impact that it has on people’s lives,” he said.
“As a local business here in Central Alberta the lights are still on. It doesn’t mean we haven’t faced challenges but like so many other service companies we have to do what we have to do and part of this campaign is, yeah, just sort of standing with the rest of the industry, whether they be competitors or other stakeholders, that’s just all we’re trying to do.”
There are many challenges globally and domestically, Ness said, but Predator Drilling has not had to do significant layoffs. They just haven’t been hiring because the growth is not there.
“We’ve done everything to minimize the costs. … Frankly some of that is changes in wages.”
Pipelines are not a short-term fix but the industry must get the government to see this as a priority because, like it or not, the oil and gas industry drives the economy, Ness said.
“Let’s talk about the realities the oil industry means to the economy and balance it with some of the negative stuff,” he said in support of Oil Respect.
Oil Respect can be viewed online at oilrespect.ca
barr@www.reddeeradvocate.com