Albertans, and particularly the Peace Region, shouldn’t be worrying about low oil prices.
That’s the message from ATB Financial Chief Economist Todd Hirsch, who argues the province is in a typical price cycle.
“This happens over and over. In fact, in 2009, we saw a similar price plunge like this and it was quite short-lived and things rebounded. Worrying doesn’t get us anywhere; I think we should maybe be prudent, but I don’t think we should worry too much because I think it will be quite temporary.”
He admits the economy will likely get off to a slow start in 2015, with job losses, but he expects to see oil prices bottom out and rise again by the spring or summer.
Hirsch adds that Peace is well insulated by its other industries – agriculture and forestry – which he expects to benefit from lower gasoline prices.
“The forestry sector, they compete directly with the energy sector for labour, so when oil prices are really high like they were last summer, and wages in oil and gas are very high, it’s really difficult for the forest producers to compete with wages for those workers.”
Hirsch suggests oil companies should take this time to retrain employees.