Virden, Man., sees a post-oil future down the line, but leaders aren't worried yet

Oil production around the southwest Manitoba community of Virdenremains steady, and while diversifying the economyaway from fossil fuels will be key for the region in the future, it's not an immediate concern for somelocal leaders.

Residents of Virden which lies about 70 km west of Brandon and the surrounding areahave benefitedfinancially for several decades from oil extraction. It's something Bruce Dunning, a town councillor who runs aconsulting business in Manitoba's relatively small oil industry, has seen first-hand.

"With the combination of oil and agriculture, we've seen the town of Virden survive many downturns and definitely a lot of services, supplies and opportunities in Virden that don't exist in surrounding towns," Dunning said.

Last year in Manitoba, 225 new oil wells were drilled and an average volume of 6,041 cubic metres of oil per day was produced, representing a 3.4 per cent increase compared to the 5,840 cubic metres per day produced in 2021.

Dunning, who's set to retire in October, remembers when his father took him to work on his first service rig when he was 12.

"He was short-handed and needed someone to fill in," Dunning said.That was 56 years ago and it's an industry Dunning has worked in ever since.

"There's no doubt there's a financial benefit, because the oil industry pays at a higher level than what the average labour force would pay in Manitoba," he said.

Regional impact

Fletcher Baragar, a professor in the department of economics at University of Manitoba, said the oil industry is only a small piece of the provincial economy, but it has had a big impact on the regional economy.

"We certainly did have our mini boom but we're on the tail end of that now," he said.

Manitoba had its highest volume of oil produced to date in 2013, with an average of 8,375 cubic metres per day.

Baragar said continued improvements in extraction methods and techniques means production will continue but he said the surge of investments, spin-offs in jobs and revenues is going to have "a progressively smaller impact on the Manitoba economy."

Capital expenditures in the sector contribute to the province's gross domestic product, a provincial spokesperson said. In 2022, they said expenditures totalled $658 million compared to $429 million in 2021.

"Oil prices can drive additional capital expenditures and translate to production increases," the spokesperson said.

Financial benefits of oil will decline

Oil has been important to the region since the early 50s. Even if oil activity will one day decline, afuture with less oil activity in the region is not something weighing heavily on area residents right now.

"There's no doubt that oil production everywhere in the world is going to start declining with the movement toward green [energy]," Dunning said.

But fewer jobs and economic spin-offs from oil is still a long way off,Virden mayor Tina Williams said.

"I don't think that it's an immediate concern for us," Williams said, as they can drill wells quickly there relative to other areas.

"It's always going to be a little cheaper to get the oil out of the ground here," she said.

She's well aware of the industry's boom and bust cycles, and encouragedhertwo sons to get a degree if they wanted to work in the oil field.

"My worry was always that my kids spent one or two years making really good money and then there was a downturn and they were the ones who were gone," Williams said. "I was hoping that if they wanted to stay and work in the patch, they would've gone to school."

Her children chose careers in other fields.

Provincial election candidates weigh in

Greg Nesbitt, theincumbent Progressive Conservative candidate seeking re-election Oct. 3 in the Riding Mountain constituency which includes Virdensaid there will be demand for oil "for a long time moving forward."

But he said electrification means it will be more important for the next provincial government to create the right economic climate to attract new industry to the area.

"We need great tax rates. We need a reason for people to come to Manitoba," Nesbitt said. "A new PC government will certainly push for that."

Wayne Chacun,a paramedic who was bornand raised in Virden, isthe NDP's candidate. If that party forms the next government, Chacunsaid it would work with local elected leaders and business people to help attract industry and diversify the economy.

"The business community in this area, it's a strong business community, will certainly want to take advantage of any opportunities that arise," he said. "It's always better to be proactive than reactive. It's better to be attracting more industry and different industry now, as opposed to waiting until unemployment is rising and we're scrambling."

The Manitoba Liberals said candidate Eileen Smerchanski wasn't available for an interview.

Virden, Man., sees a post-oil future down the line

1 year ago

Duration 2:27

Oil production around the southwest Manitoba community of Virden remains steady, and while diversifying the economy away from fossil fuels will be key for the region in the future, it's not an immediate concern for some local leaders.