Alberta's beleaguered energy sector is making a comeback

Originally published Nov. 29.

The trucks, and the traffic, have returned to Rocky Mountain House.

The Alberta town, about two hours northwest of Calgary, is booming again, more than three years after the price of oil began to slide and took the province's energy sector along with it.

Today, fracking rigs line up onthe shoulder of the highway as a steady stream of truckshauling heavy equipment makes itsway into the heart of theDuvernayFormation,one of the energysector'shottest plays.

By the end ofsummer, it was full of trucks.- PrabLashar, Rocky Mountain House chamber of commerce

"Rocky is a two-light town again," saysPrabLasharas she waits at an intersection for all the trucks to amble by a nod to the fact that the rapid return of the energy industry to the areahas meant a slower commute for her.

It's ashift the executive director of the local chamber of commerce began to notice some months ago.

"In late spring, the campgrounds started getting packed with oil and gas workers," Lasharsaid. "And then the trucks started moving in, and by the end ofsummerit was full of trucks."

'A new Alberta vibe'

Those trucks are part of a move by major energy companies, includingChevron, Shell and Encana,to stake their place in the Duvernay, a formationthat stretches across much of central Alberta and is estimatedto hold more than three billion barrels of marketable crude, six billion barrels of natural gas liquids (such as propane and butane)and more than 75 trillion cubic feet of natural gas, according to the National Energy Board.

It's a lot, and according to industry analystPeter Tertzakian, new horizontal fracking technology meansall those hydrocarbons are now cheaper and easier to get to market.

Tertzakian, executive director of the ARC Energy Research Institute, says those lower costs are why capital is flowing into the Duvernayand other traditional formations like the nearbyMontney, instead of to the more capital-intensive operations in theoilsands.

"There is no question there is a new Alberta vibe happening in that west-central Alberta/northeast B.C. area," he said.

Tertzakian says capitalis already pouring into the area and forecastsabout $30 billion willbe investednext year, with as much as 20 per cent of that being directed towards the Duvernaycompared to just $13 billion in oilsandsinvestment, which is mostly maintenance and not going toward new projects.

'Things are really flying'

In Rocky Mountain House, the impact of that spendingis already apparent. Hotels and restaurants are full, and signs looking for workers are already springing up around town.

Inside the maintenance shop at Pidherney's construction, that spike in business is hard to miss. WendallMasonhas to squeeze past a bustling crowd of welders, mechanics and other workers to cross the floor. The company's oilsands manager says he is looking to hire more people. "We are flat out," Mason says. "Things are really flying."

It is a huge change compared with the same time last year. "The Duvernayplay has been really big for us, obviously, all the way from Grande Prairie to Fox Creek," Mason says, referring to a 200-kilometre stretch of activity.

Across town, at the Walking Eagle Inn and Lodge, signs that the boom times are back are easy to find. The lunch rush has returned tothe restaurant, and the hotel is fully booked for weeks at a time,according to general manager Colleen Dwyer.

Dwyersays she did more business in the first part of thismonth, up toRemembrance Day,than she did in all of November last year.

"It's only just been very recently that things have picked up, and we are just in a lucky area because of the Duvernay," she says.

Dwyer would like to believe thatthe good times will last, but she has lived throughher fair share of booms and busts in Alberta's oilpatch and knows they rarely do.

"This industry it is so unpredictable," she says. "There areso many variables and you just can't predict, you can't forecast, so you just keep your fingers crossed."

Stable oil price will bring more investment

But the province's energy sector may not need luck if the price of oil continues to flirt with $60 abarrel.

Tertzakiansays that if the industry believes prices have stabilized at that level, he sees evenmore investment in the Duvernay and he wouldn't rule out renewed interest in the oilsandseither.

"I think above $60 you are going to be seeing a little bit more investment above maintenance," Tertzakian says.

Crammed into the cab of a newly purchased road grader, Kim Hassinkhopes the good times stick arounda little while longer at least.

Hassink,who works forPrentice Creek Contracting clearing roads around oil and gas facilities near Rocky Mountain House, has gone from workingtwo days a week to seven 70 to 80 hours each week. "Gotta do what you need to do to pay the bills," she says.

Hassinkhopes herdays of just scraping by are over. Now that the money is rolling in again, she says she even has plans to buy a home.

The hope forHassink,and thousands of others here,is that the good times are back in Alberta's oilpatch, and thatthis time might be different that this time they might be back for good.