Public Policy Perspective: Alberta's Oil Price Crash Impact

This assignment analyzes the impact of the oil price crash in Alberta, focusing on the economic hardships faced by the province due to the collapse in oil prices. The student examines an opinion piece from The Globe and Mail discussing the crisis, which was exacerbated by a price war and the COVID-19 pandemic, leading to weakened oil demand and economic shutdowns. The analysis considers various public policy perspectives, including the environment, jobs, and taxes, and assesses the government's responses, such as forming an advisory panel and offering aid packages. The student also discusses the long-term challenges facing Alberta's oil industry, including pipeline shortages and the global shift towards decarbonization, which further strain the oil sands. The assignment highlights the potential for a severe economic contraction if oil prices remain low and emphasizes the need for substantial action to protect the economy and ensure recovery, offering insights into the complex interplay of economic, environmental, and political factors affecting Alberta's oil industry.

Running head: CURRENT AFFAIRS
CURRENT AFFAIRS
Name of the Student:
Name of the University:
Author Note:

1CURRENT AFFAIRS
https://www.theglobeandmail.com/canada/british-columbia/article-western-canada-oil-price-crash-sends-albertas-
economy-back-into/
The article is opinion piece of crash of oil price in Alberta. Prices of oil had collapsed to
lowest level within past few years, in face of price war among Saudi Arabia and Russia.
Provincial budget of Alberta was not looking too good. Future of economy of Alberta is hurting
still from downturn which started in 2014, now was in a serious jeopardy.
In my opinion, price crash of oil came as province was staring down already the problems
that are related to outbreak of corona virus that had weakened the demand of oil as well as
pushed the prices of oil down. Also economic crisis is there that is driven by pandemic as well as
it prompted shutdown of economy. However, I think crash of oil price in several ways is
unrelated completely. Protecting economy as well as ensuring recovery after end of this
coronavirus, would require substantial action over both these factors. The federal and provincial
governments promised that help is coming for the people of Alberta. However, I think most of
announcements so far focused over direct help to individuals or measures for the businesses and
not for workers or gas and oil producers.
Advisory panel is to be formed for economy of Alberta, led by Jack Mintz, economist
with the members which consist of Stephen Harper. Former prime minister, to look for long term
as well as medium term recovery of economy. If the collapse in oil price stays for months, few
experts predict that this could trigger huge economic contraction. I think low prices of oil reflect
economic shrinkage happening now all over the globe amidst pandemic. If the prices remain low,
they would squeeze also revenue stream of petro states of the world and could provoke financial
collapse to their creditors and bankers.
It is lowest price of oil that is seen by people of western Canada. Prices have slightly
rebounded since then. Provincial government would pay levies that are owned to regulator on
behalf of industry for few months. Oil prices in Albert is suffering for a while. As government of
Alberta is forced in curtailing production by end of 2020 in attempt for preventing further drops
in oil price. Several oil projects have been postponed or cancelled already. I can see oil producers
of Alberta are struggling already with the low prices of oil as well as products of high cost.
Industry is facing pressure also as world moves in decarbonizing. Carbon footprint put more
strain over oilsands as this seeks to be competing with the alternatives of lower-carbon within
global market. Long term problems for oil companies of Albert would continue as province
faces competitive global market, even after this pandemic recedes. Oil industry of Alberta is
battered by pipeline shortage already which has pressured price of commodity produced in
province. Government of Alberta is preparing credit package of low interest for struggling oil
company for mitigating this price collapse’s worst consequences.

2CURRENT AFFAIRS
Bibliography
The Globe and Mail. 2020. Western Canada: Oil Price Crash Sends Alberta’S Economy Back
Into Crisis. [online] Available at: https://www.theglobeandmail.com/canada/british-
columbia/article-western-canada-oil-price-crash-sends-albertas-economy-back-into/