In a recent article with CBC, Chief Economist Charles St-Arnaud spoke about how the recent oil boom has not impacted the economy in Alberta the same as previous oil booms have.
St-Arnaud spoke to how oil producers are using their revenues in very different ways compared to 2014, part of which has to due with the fact that current revenues have been redirected to pay debt accumulated during the pandemic and the oil price collapse.
“In 2014, about four per cent of revenues were being returned to shareholders,” St-Arnaud said. “Now, that proportion is closer to 10 per cent.”
St Arnaud also noted that about 75 per cent of those shareholders are not Canadian, meaning the money is flowing almost completely out of the province and Canada and although there’s about 25 per cent left over, those shareholders are spread across all of Canada, not just Alberta.
In St-Arnaud’s view, that trend is linked to forecasts for global oil demand, which is projected to peak in the early 2030s and then start to gradually decline.
Oil producers, therefore, are no longer in a position where they may be inclined to dramatically increase production each time revenues and profitability increases.
Read the full article at the link above to learn more!