A pump jack draws oil from the ground near a hydraulic fracturing operation near Bowden, Alta.JEFF McINTOSH/The Globe and Mail
Like most Albertans in the 80s, I remember the question that loomed like a nasty storm cloud on the prairie horizon: What happens when we run out of oil? It was a logical question – since oil was finite, it seemed sensible to conclude that we would eventually run out. And then what?
Three decades later, that question has been answered. Alberta will never, ever run out of molecules of oil in the ground. With new technologies that have untapped the oil sands, we now have more potential resources than ever before. There's no way we will ever run out.
But now even stormier questions bear down on Albertans: What happens if no one wants to buy it at the price we require to dig it up? Or worse, what happens if we can't pipe it out of here? These uglier realities are creating some worry lines on the brows of the Armani-suited in downtown Calgary. (If nothing else, there should be a good future for plastic surgeons in this city).
Pipeline opposition, the war on carbon, soaring oil U.S. production – there are plenty of reasons to worry about Alberta if you're so inclined. Fortunately, Alberta's economic future remains incredibly bright. The future of the province isn't just about oil.
A conversation I had with a typical Albertan last week affirmed my confidence in what this province's economy is all about: Capitalizing on what works today, and quickly shifting gears if it doesn't work tomorrow. This young man farmed with his dad in the 1990s at a time when farming made little sense or money. But he realized the farm's backhoe was making him big bucks. So farming became secondary to construction machinery, and a decade and a half later he owns a thriving construction company in central Alberta. And now (cue the Circle of Life theme song) he's shifting back into farming to capitalize on today's good crop prices.
The energy sector is the same way. Be it natural gas, conventional crude, bitumen, shale oil or renewable energy, Alberta's entrepreneurial spirit knows how to ride the waves. It always has, and it always will. And if oil prices slide because of rising U.S. production or falling global demand, Alberta will be just fine.
This isn't to say there wouldn't be some uncomfortable adjustments. The amount of planned investment in the oil sands is close to the gross domestic product of a lot of Third World nations. If that investment doesn't materialize, there would certainly be some pain.
But those who believe Alberta is a one-trick oil sands pony need to spend some time here. Bright thinkers and civic leaders like Andrew Mosker, president and CEO of the National Music Centre, are intent on turning Calgary into a destination for the recording and performing music industry. (And if you think it can't be done, you've never met Andrew).
Last weekend, between Edmonton, Calgary and Fort McMurray, over a thousand people took part in TEDx events. Thousands more connected online with the streaming videos and tweets. An Edmonton entrepreneur showed off his 3-D printers that are developed and manufactured in Alberta. A seventeen-year-old dazzled the audience with his profound vision of the future of learning. The Fort McMurray TEDx theme was "Shift in Thought." Calgary's was "Energy Full Spectrum."
In other resource industries such as agriculture and biotech, Alberta is a global leader. Geomatics, 3-D imagining, and drone technologies seem more like Star Wars and less like the old stereotypes of a prairie dirt farmer.
Ideas are the new currency of the 21st century, and that currency is circulating with tremendous velocity in Alberta.
The hydrocarbon industry is still the power lifter of the provincial economy. And much of Alberta's wealth – both today and in the past – is rooted in oil. But we're no rubes out here. We can read the writing on the walls, too. Global demand for oil may fall. China may discover tomorrow a way to power cars with sea water (although that's unlikely). We may or may not end up investing as much in oil sands as we think.
But that's okay. We'll be just fine. If there's one thing Albertans know how to do well, it's adapt.
Todd Hirsch is the Calgary-based chief economist of ATB Financial and author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.