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Old Posted Apr 28, 2017, 11:15 AM
balletomane balletomane is offline
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Future Challenges for Oil Boomtowns

What are some of the future challenges for oil boomtowns? Especially in Canada and the United States, where some cities like Fort McMurray, AB and Williston, ND owe much of their recent success to the oil boom, could they face a future like some US rust belt cities?

An article from the Financial Post on the issue:
http://business.financialpost.com/ne...-city-syndrome
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Old Posted Apr 28, 2017, 1:24 PM
mrnyc mrnyc is offline
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its going to be two thumbs up for this energy business in the trump era. isn't he restarting the pipeline projects? and don't forget the fracking and his coal revival. boy howdee.

some small towns or boom towns will certainly profit from this activity. it would be interesting to try to guess where that might be. for example, i believe pittsburgh has benefitted from the fracking business.

of course, this is all dependent on oil prices and demand, so its hard to say.

which reminds me, its crazy expensive to build new nuclear power plants, i wonder if that will ever happen again? are there any new ones even planned?
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Old Posted Apr 28, 2017, 3:11 PM
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cabasse cabasse is offline
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there are a couple under construction here in GA right now at plant vogtle. (and more in some state of planning) things aren't going so smoothly though, and it's contributed to westinghouse's bankruptcy. from what i've read, people are basically having to learn how to build them again without prior knowledge/experience, causing huge cost overruns among other things.
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Old Posted Apr 28, 2017, 3:15 PM
balletomane balletomane is offline
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Without hopefully starting a political debate, I agree that the oil and gas industry should benefit under Trump. It's hard to say if oil prices will increase in the coming years or if $50/barrel will be the new normal, and if they do will they even reach pre-2014 levels?
Regardless of what the price of oil is, it sounds like those pipelines will be built, which should at least greatly benefit the construction industry in oil towns.
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Old Posted Apr 28, 2017, 4:29 PM
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CherryCreek CherryCreek is offline
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Quote:
Originally Posted by balletomane View Post
Without hopefully starting a political debate, I agree that the oil and gas industry should benefit under Trump. It's hard to say if oil prices will increase in the coming years or if $50/barrel will be the new normal, and if they do will they even reach pre-2014 levels?
Regardless of what the price of oil is, it sounds like those pipelines will be built, which should at least greatly benefit the construction industry in oil towns.

Of course, it depends what you mean by "benefiting under Trump." Despite the incredible boom in US oil production, the conservative critique of the prior administration was that it was TOO restrictive on drilling (DRILL BABY, DRILL!). In a world already flush with oil, driving US production even higher through loosened drilling restrictions would likely drive prices even lower. For high priced production areas such as the Canadian oil sands, the near and mid-term prognosis is looking pretty bleak.
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Old Posted Apr 28, 2017, 10:43 PM
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pdxtex pdxtex is offline
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Quote:
Originally Posted by balletomane View Post
What are some of the future challenges for oil boomtowns? Especially in Canada and the United States, where some cities like Fort McMurray, AB and Williston, ND owe much of their recent success to the oil boom, could they face a future like some US rust belt cities?

An article from the Financial Post on the issue:
http://business.financialpost.com/ne...-city-syndrome
you mean aside from running out of oil, alternative fuel sources, fierce media driven backlash of oil transport networks, tainted groundwater, earthquakes or electric vehicles? those would be all of my chief concerns. I think the regulatory environment is current pro fossil fuel, but there should be a plan B (always have a plan B!)....these towns should consider this as well. one horse towns eventually turn into no horse towns....
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Old Posted Apr 28, 2017, 11:04 PM
balletomane balletomane is offline
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Yes, but beyond the surface concerns, how will the eventual downturn effect these communities at a human scale? Obviously job losses will be inevitable, but should these boomtowns look to a city like Gary, IN for their potential fate?
Williston had a population of 12,000 before its oil boom, now it has 30,000.
Fort McMurray had a population of 2,000 before the first major development in the Oil Sands in the 1960's, now it has 80,000.
Even if these communities diversify or discover a good Plan B, how sustainable is all that growth that started with oil development? Especially in Fort McMurray's case do to remoteness, it is over 400 km from Edmonton.
I'm not posing these questions for what lay a few years down the road because of the recent downturn in oil prices, but for 15+ years down the road, when oil is forecast to peak in demand.
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Old Posted Apr 28, 2017, 11:07 PM
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^^^I would bargain the success of any community whose finances are based on a non renewable resource will be temporal. PLus the technology to extract it is probably the best and most efficient its ever been. The work will dry up. It will be like the grand banks after the fishing collapse.
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Old Posted Apr 30, 2017, 9:56 PM
balletomane balletomane is offline
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What communities owe the majority of their growth to the oil boom? The only ones I really know of are Fort McMurray and Williston that are directly impacted by the boom. Other communities nearby seem to be effected by the oil and gas industry, but less so than the principal "oil capitals" in their region.

In 1967, the first major oil development occurred in Fort McMurray. At the time its population was 3,000, today it has 75,000 (125,000 including transient workers). Williams County (Williston), North Dakota has nearly doubled in population since 2000, from 20,000 to 35,000.
I know cities like Midland and Odessa in Texas, and some cities in the Middle East have been greatly impacted by the oil boom, but are there any as dependent on the industry as Fort McMurray or Williston?
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