What are the 5 key challenges facing the Canadian Energy Industry? The first issue we will discuss is the low oil price environment. As the case study points out, oil prices topped the list of issues facing the energy industry. The large amounts of crude oil available in world markets meant that the West Texas Intermediate price had fallen to $30/bbl by mid-February (Vietor, 2016, p.13). Combined with a surplus of heavy oil, this meant that the markets were discounting Western Canadian Select oil by around US$15/bbl (p.13). Low oil prices eat away at revenues and cash flows, and help contribute to a company’s debt. It is evident that with the tremendous amount of layoffs and unemployment occurring in oil and gas companies, low energy prices also contribute to unemployment in the energy sector (see appendix A). A study from the Canadian Energy Research Institute (CERI) found that if crude oil prices remained low, there would be approximately 116,000 fewer jobs in the …show more content…
This same study by CERI concludes that “Canadian economic growth could be on average 23 percent lower if low oil prices persist over the next seven years […] on the national level, Canadian economic growth will suffer as a result of low crude prices,” (2016, p. xiii) Thus, a low oil price environment is a challenge for the Canadian energy industry because it results in fewer jobs in the economy, less profit