The State of the Industry: Saskatchewan Oil and Gas

Chris Slubicki

Ron Cugnet, chair of Valleyview Petroleum Ltd. and vice-chair of the Saskatchewan Oil & Gas show, is pleased with the rising enthusiasm within the industry. “Pricewise, the industry is doing well at around $60 per barrel, and the Canadian dollar is also doing well which is helping the industry,” says Cugnet. However, he is concerned with federal government policies. “It’s not hard to look around and see the billions of dollars that have left the sector and the region due to federal domestic policies,” he says. “As well as concern over the carbon tax and Bills C48 and Bill C69.” Cugnet
believes that the Oil Show is an opportunity for the industry to “punch back” in a way and demonstrate how important the sector is to the Canadian economy and how it is building the modern society that we live in and enjoy today.

Brian Crossman, another local attendee who enjoyed this year’s show, is part-owner and field supervisor at Independent Well Servicing in Estevan. He is also one of a few Saskatchewan oil workers who sat and spoke at The Standing Senate Committee on Transport and Communications which was referred Bill C-48, an Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia’s north coast. In May, Crossman offered some important testimony from his experience working in the Russian oil sector, and
specifically the standard of their work and its environmental impact. “…I have a picture of the rig I was operating, Beta 49, and the day I took that picture, there’s a big cloud of black smoke behind it because they just torched it. And everywhere I looked that day I took that picture there’s a big cloud of black smoke. I could look 360 degrees and not miss it. I remember thinking to myself, this is—I couldn’t believe that that’s how they
ran their oil patch,” stated Crossman at the committee.1

When Industry West caught up with Crossman, he also pointed to Chris Slubicki as someone to talk to about the state of oil and gas not just in Saskatchewan, but the Canadian energy sector as a whole. Slubicki is the president of Alberta-based oil company Modern Resources Inc., and jokingly refers to himself as the accidental activist. He doesn’t fit the typical definition of an oil executive—Slubicki is a mechanical engineer who defines himself as passionate for all kinds of energy. An avid outdoorsman, he loves travelling the robust back country of Canada with his family, and is the kind of guy that installs solar panels on his cabin for the fun of it. All in all, a classic engineer.

Slubicki’s message about the Canadian oil sector is what is really defines him though. His core message is about advocating for the Canadian oil industry. His reasoning is very persuasive. Slubicki argues that energy scarcity is one of the main contributors to quality of life. “When you don’t have energy, you don’t have clean water, reliable food, shelter, schools, hospitals, transportation, and the list goes on,” he says.2

Of the 7.5 billion people that live on this planet, the top 1.5 billion people from developed countries live similarly to Canadians (Tier 1). This equates to approximately 34 barrels of energy (BOE) per person, per year—with the energy amounts translated to barrel amounts to simplify the argument. In places like China, Turkey, Mexico and Brazil (Tier 2) that number drops to 14 BOE and for countries such as India, the Philippines and Pakistan (Tier 3), it sinks to four BOE. At the bottom of the list in energy usage are countries like Nigeria and Sudan (Tier 4), with just one BOE per person per year.

As energy usage drops, so does quality of life. In Canada, we take for granted our energy consumption and quality of life. The reality for most people in the Tier 4 category, is that they are not using oil for energy. They are using wood, coal, or cow dung to cook their food and heat their houses. “The world needs more energy. Every kind of energy: oil and gas, solar, wind, nuclear, hydro, tidal, geothermal, all of the above. This whole energy debate has become so polarized. It’s this, it’s that…it’s all of the above,” says Slubicki. “The world needs more energy. Do you think that the bottom billion people don’t want to live our standard of life?”

To put things in perspective, the average Canadian consumes 67 BOE per person per year. This is almost twice the amount as the rest of the developed world. We are, however, a very large country that gets very cold in the winter. Naturally, we are going to use more energy than other smaller countries with moderate climates. We’re also home to energy-intensive industries like manufacturing, mining and agriculture. Our quality of life in Canada is linked to energy usage too, as we drive to manage our professional and personal lives. The average person on the planet consumes 13.4 BOE per
person per year and as a planet, emit 32.1 gigatons of CO2 annually. Of that energy used, a little over half comes from oil and gas, about a quarter from coal, and the rest from renewables. “I don’t know what your own view is on CO2 and climate change, but my own view is, we’ve been pumping CO2 in massive quantities into the atmosphere for about 150 years now. I don’t think you can pump that much of anything into the environment and not change it,” says Slubicki. “So, I’m a believer in climate change. And I believe we have to do something about it. And I also believe, we can’t afford to be wrong. How much are we willing to bet that it’s not the cause?”

The future is intriguing and concerning. If we do nothing, by 2040 the planet will have 9 billion people and consume on average 15.1 BOE per person per year. The world would emit 42.7 gigatons per year. However, if we were to follow the Paris Agreement, by 2040 the average person would consume a year and the world would emit only 18.3 Gt of CO2 per year. What changes to make that happen? Coal usage is reduced, renewable usage grow, nuclear energy becomes a larger part of the equation, but most importantly, energy efficiency improves. Even so, under the Paris Agreement scenario, 48 per cent of global energy in 2040 comes from oil. “For those people that say it’s a declining industry, and that it doesn’t have a future….it has a great future. Under any scenario, oil and gas is still the primary source of energy for decades to come,” says Slubicki.

Canada is positioned to lead in global oil production, even as theworl d shifts to reduce oil consumption in favour of renewables and increased energy efficiency. Now, Canada is sixth in the world for oil and natural gas producers behind the United States, Saudi Arabia, Russia, Iran, and Iraq, and fifth in the world for oil producers behind the United States, Russia, Iran, and Qatar.

However, there has been a powerful movement for many years now to divest from Canadian oil. Banks and investors have been pressured to pull away from an industry that has been vilified. This is a free country and this movement is free to exist and operate. Let’s assume this movement is successful and the Canadian oil industry shuts down or is greatly reduced. Canada and the rest of the world now have to get their energy from the remaining oil producing countries. “Which of these countries has a higher worker safety standard than Canada? Which of these countries has better human rights standards? Which of these countries has higher ethical standards? Which of these countries has better gender equality standards? Which of these countries has better human rights standards? Which of these countries has better Indigenous consultation, and has higher environmental standards?” poses Slubicki. He argues that Canada is the best and most responsible oil producer in the world. Despite all the forces pushing against Canadian oil production here and abroad, this industry has to succeed. This reasoning appears to be taking hold and, despite the polarization of the subject, this
rationale is going to persuade more and more people to see the importance of Canada being a major global oil producer now and in the future.


1The Standing Senate Committee on Transport and Communications Evidence; May 1, 2019, https://www.lloydminster.ca/en/news/
2Canadian Energy Leadership – Chris Slubicki, https://www.youtube.com/watch?v=raMwTUjB224&t=2316s