“The downturn has pretty much hit everywhere,” says Soucy. Drilling is projected to drop by 43 per cent down to 6,620 wells in Alberta, 18 per cent down to 700 wells in B.C., 38 per cent down to 2,475 wells in Saskatchewan and 48 per cent down to 150 wells in Manitoba.

Estimated job losses among gas- and oilfield contractors since the end of 2008 are nudging 25,000. In a spring PSAC survey of its mostly private and often secretive 270 member companies, about one-quarter disclosed layoffs that cut their payrolls by an average 22 per cent. Firms in Soucy’s group had about 70,000 employees last December. If all wielded the axe as vigorously – which was probably the case, Soucy says – his industry sector has cut 12,000 to 15,000 workers. Those losses are on top of about 9,000 to 10,000 workers dropped by member firms in the parallel Canadian Association of Oilwell Drilling Contractors.

Service, supply and rig providers continue to echo their customers, the exploration and production companies, in calling on Alberta to back off hotly contested royalty changes adopted in 2007 and postponed but not canceled as energy markets deteriorated last year. Hopes are being pinned on a promised review of the provincial revenue and regulatory regime’s “competitiveness” against other jurisdictions, especially in the United States and B.C., where industry critics say investment is being redirected.

But Soucy also echoes gas and oil producers by acknowledging that governments are neither to blame for the current international industry slump nor the place to look for a cure. That power belongs to energy markets and the overall economy, where demand for fossil fuels tapered off as a result of the global credit and financial crisis. “Even Alberta doesn’t have enough money to compensate for the commodity price drops we have seen,” Soucy says.

Early signs of a 2010 comeback emerged soon after PSAC released its bleak outlook for the rest of this year. At the same time as oil rebounded back above US$60 a barrel and Imperial Oil Ltd. announced construction of its Kearl bitumen mine for up to $8 billion, the dean of Alberta natural gas sent out fresh rays of hope.

Enter Nebraska-born Calgary engineer J.C. Anderson. His first brainchild – Anderson Exploration, built on gas discoveries in the Peace River Arch geological formation beneath northwestern Alberta – fetched $7.3 billion in a 2001 uninvited takeover by Devon Energy Corp. He and a core group of veterans from his first firm are creating another growth star in a partnership with ConocoPhillips Canada to drill up to 1,000 wells into a new shallow gas source in central Alberta called the Edmonton Sands.

By automatically lowering rates in spells of poor prices, the province’s much maligned new royalty regime makes shallow gas more attractive than ever, shareholders were told by Anderson’s 2009 first-quarter report. Temporary royalty cuts announced in March and extended in June to offset hard times will cover drilling rig costs until March 2011.

Recovery is built into the market’s natural rhythm, say Anderson’s gas veterans. Gluts causing the current low will end due to drilling slumps in the U.S. as well as Canada. “The level of supply of natural gas is corrected, upward or downward, by strong or weak prices.” Firms capable of surviving and preparing for the next market turn will eventually come out on top.

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