Last week, the Alberta government updated their Economic Dashboard with active drilling rigs data for April 2022.
Jason Kenney, Alberta’s premier, seemed to get pretty excited about this data, tweeting out that the number of active drilling rigs increased 126.2% in April 2022 over April 2021.
He’s right in that drilling rigs did increase from 42 in April 2021 to 95 last month, but there are some details he’s leaving out.
For example, just one month before, there were 137 active drilling rigs in Alberta, and that number was down from 174 the month before that.
Which means that while April’s active drilling rig numbers might have been up by 126.2% from April 2021, they’re down 45.4% from just two months ago.
It’s kind of weird to say that the oil and gas industry in Alberta is recovering fast when it’s seen two consecutive months of declining numbers. I mean, assuming we’re using drill counts to measure recovery.
What’s funny is that 3 months ago, the UCP caucus tweeted out that “Alberta is back” after January’s drilling counts hit 163.
If increasing numbers mean that Alberta is back, does that mean that decreasing numbers mean that Alberta is missing again?
Now, to be fair, April often sees lower numbers than other months of the year. For example, check out the number of active drilling rigs over the last 3 years.
And while it does seem pretty impressive that April 2022 saw largest number of active drilling rigs during that period, watch what happens when we take a longer-term look.
When compared to every April over the previous 3 decades, last month was nowhere near where it used to be. In fact, it’s in 15th place in terms of highest number of active drilling rigs, and only 2 more than the NDP’s high of 93 seen in 2017.
April 2001 saw the highest number, at 224. Last month’s numbers aren’t even half that amount.
And every one of the 14 Aprils with numbers higher than April 2022 saw active drilling rigs at 115 or higher, with two of the Aprils passing 200.
Finally, take a look at this graph, which tracks the number of active drilling wells for each month over the last decade, not just Aprils.
What we see here is that while we might be seeing a rise compared to the all-time low of 9 in May 2020, we’re still pretty low, relatively speaking.
So, while Albert’s oil and gas industry might be recovering fast compared to the start of the pandemic—if we’re using only the number of rigs as the metric—we haven’t been recovering in any significant way since the 2015–2016 recession set off a gradual, multi-year decline.
I guess the UCP has to find wins wherever they can find them, no matter how shaky.
