Tyler Pubben was making as much as $1,000 a day working in the oilpatch when he was fresh out of university in the early 2010s. The pay was enormous for a man in his 20s, but he worked hard. As a trained geologist, he was also a hot commodity in a rapidly growing industry, putting in 12-hour days and bouncing from one project to the next.

A big, black gold rush had taken hold in Alberta. Many of the world’s biggest oil companies — hailing from Beijing to Houston — converged on a remote patch of Canadian hinterland to strike it rich.

Workers such as Pubben got in on the action. Anyone with

“a pulse and a degree or any experience” was getting hired to work on an oilsands mine or a construction site, he said, and making buckets of money.

“We were always desperate for people,” he said.

Oil prices

stayed above US$100 a barrel for long stretches during this era. The rally fuelled a lavish spending spree in the industry as new technologies unlocked more underground oil reserves and pushed production to fresh highs.

For Pubben and others like him, it was a bonanza, a rare shot at incredible wealth. And he has come to realize it wasn’t just unusual. It may never happen again.

The bust that followed the bonanza cast a long shadow over the oilpatch. After a painful

recession

and a drawn-out recovery, Alberta’s standard of living has still not returned to the highs of those glory days.

There is hope the federal government under Prime Minister

Mark Carney

will help fuel a new era of growth for the industry by potentially approving a massive

export pipeline

for

oil

. But even something as ambitious as a nation-building project, as the pipeline is described, may not be enough to create a bout of

prosperity that parallels the last major boom, economists and industry watchers say. 

“Even if we went back to absolutely insane growth in

oil and gas

demand, we’re not going to see the same growth in oil and gas hiring that we had before,” Pubben, who remains in the industry as president of K.C. Waunch Petroleum Consultants Ltd., said.

Critics of the federal Liberals hold Justin Trudeau’s government responsible for much of the oilpatch’s struggles since the boom years. But global markets have shifted — the long-term outlook for demand has

dimmed

, according to the International Energy Agency — so any hopes for a return to the highs of the 2010s may just be a pipe dream.

Divine intervention?

A famous bumper sticker pasted onto pickup trucks from Houston to Calgary bears this phrase: “Please God, let there be another oil boom. I promise not to piss it all away next time.”

Pubben said he tried not to squander his share of the riches from the last major boom. But he still led an enviable, jet-setting lifestyle in his 20s and 30s. He and his wife Laura — they met at a Denny’s restaurant in Calgary — honeymooned in the Alsace region of northeastern France, an area known for its wines and castles.

The couple filled the pages of their passports with stamps from other parts of Europe, New Zealand and a wide swath of Africa, from Zambia and Botswana to Kenya and Rwanda.

Pubben said the boom times were good to his family; the amount of money he made was “bonkers.” Even after clocking all those air miles, he still managed to squirrel a lot of his earnings away into savings.

“It let us do what we’re doing now, which is running two companies and having two kids, and feeling that we’re not stressed about the economy, even though it definitely isn’t doing as well as it once was,” he said. “At the time, we managed to build that nest egg.”

Still, the ironic bumper sticker about wasting oil riches became all the more meaningful for workers after the boom turned to bust in late 2014. Global markets were overwhelmed by a colossal glut of oil, sparking an eviscerating rout that left lasting scars in Alberta.

New technologies had allowed companies in the United States to pump oil and gas out of shale rock. It set off an energy revolution that would transform that country into the world’s biggest producer.

In just seven years, these U.S. companies hit a level of production that took Canada seven decades to reach, according to a

Bank of Canada report

.

As gushes of shale oil hit the market, Saudi Arabia and its allies at the

Organization of Petroleum Exporting Countries

(OPEC) decided not to cut production, an apparent attempt to steal market share back from U.S. producers.

Neither side gave in, not even when demand from major oil-consuming countries such as China started to slow. Markets were suddenly awash in the black fuel, forcing North American prices to fall by more than half, plunging to less than US$50 in the early months of 2015 from above US$100 a barrel the previous summer.

There had been other crashes before, but this one was seismic. It drew a line in the oily sand dividing everything that came before the bust from what happened next. It marked the end of what may be the final round of unchecked, over-the-top growth in the Canadian oilpatch; t
he last major boom from the industry’s confetti cannon of cash.

“I have a hard time seeing us going back to the early 2010s, as much as many Albertans might think that that should be the norm,” said Charles St-Arnaud, chief economist at Alberta Central, a financial group that represents credit unions. “It was an exception in the grand scheme of history.”

In the months and years that followed, the industry and investor appetite for spending changed so dramatically, so completely, that there may be no turning back. 

An early sign of this shift arrived almost immediately: cost-cutting became the new religion in the oilpatch.

A historic round of mass

layoffs

and consolidation hit thousands of families and emptied office towers in downtown Calgary. Estimates of the carnage vary, but Statistics Canada said Alberta’s resource sector, which is dominated by oil and gas and also includes forestry and mining, shed 54,000 jobs in the two years following its peak in July 2014.

Gary Fraser was working on an oilsands project north of Fort McMurray, Alta., when he lost his job in January 2015. At the age of 50, with a teenage daughter at home and a mortgage to pay, he was among the early casualties of the crash.

By that time, Alberta had plunged into a 

severe economic downturn,

worse than the great financial crisis, according to the Alberta bank ATB Financial. The 2015-16 rout even shook the national economy, though it wasn’t enough to throw Canada into a recession.

Fraser and everyone else in his position were learning the hard way what it’s like to search for work in a downturn.

Months went by and he wasn’t getting anywhere.

“Was I scared? Absolutely,” he said. “I mean, let’s face it, I never thought at that age I would actually be without work.”

The engineering technologist said he believes his age was the main reason why he kept getting rejected.

“I was too old,” he said. “They didn’t want to spend the money on my expertise or my knowledge, and I couldn’t accept anything lower.”

He eventually landed contract work, but it wasn’t always steady. By the end of 2016 — two years after he was laid off — he had burned through two thirds of his retirement savings.

Fraser used the downtime at home to finish some renovations: new windows and doors and another layer of paint on his two-storey home in Calgary. The work kept him busy, but these weren’t simply pet projects. The whole point was to make sure the house was in good shape in case his family had to sell it and start over. Luckily, it never came to that, but life wasn’t easy.

“It wasn’t looking very good is what I was thinking,” he said. “I had to figure out a better way to present myself.”

In some ways, Albertans are still living in the shadow of the bust. The province remains the wealthiest in Canada, but its workers have been losing ground, St-Arnaud said.

On average, Albertans’ purchasing power has dropped since the height of the boom, something made worse by a historic round of

inflation

. Their quality of life — measured by how much money the economy churns out for each person — has deteriorated, he said. The province’s

unemployment rate

, 8.4 per cent in August, is close to double what it was during the boom.

St-Arnaud said oil and gas workers are not the only Albertans falling behind. Just as the boom lifted the broader economy, the bust pulled it down.

Employers in other industries had to compete and pay more for workers when times were good, and 20-somethings such as Pubben were raking in $1,000 a day in the oilpatch. But when tens of thousands of people like Fraser were out of a job all at once, those same employers suddenly had leverage to pay less.

“You expect, as an individual, that I’ll be able to buy more, or I’ll be a bit better off next year than I was last year,” St-Arnaud said. “But after 10 years of feeling that you’re always getting worse off, it starts to create tension and general disgruntlement.”

He said this tension in

Alberta

, this new wave of public frustration — with calls to separate from Canada echoing in some pockets of the province — are a legacy of the post-boom economy.

The anger boiled over again after Canadians elected another Liberal government in Ottawa earlier this year. Many conservative voters in Alberta and Saskatchewan felt this was a new mandate for the same old party they believe has been hostile to their industries for a decade.

Fraser

isn’t about to throw his support behind the separatist movement, but he is sympathetic to many of the frustrations at the heart of it. He said Trudeau’s Liberals left a legacy of distrust in the oilpatch.

“They caused too much damage, and we need a change,” he said. “Now they’re talking that they want to start doing business again in this country. They want to market ourselves on the global stage again, but it’s hard to do that when you’re not letting the investors build the infrastructure that they need.”

The politics of pipelines was an important source of animosity and bitterness that came to define the Trudeau government’s relationship with Alberta and

Saskatchewan

. It also helped shape public opinion in those provinces about who was to blame for any economic challenges, St-Arnaud said.

During their first term in office, the Liberals effectively killed Enbridge Inc.’s proposed

Northern Gateway pipeline

to the northern coast of British Columbia. The company that is now

TC Energy Corp.

cited new environmental regulations from Ottawa as one of the factors when it cancelled its

Energy East pipeline

from Alberta to New Brunswick.

Still, the government approved two other major projects: an expanded

Trans Mountain pipeline

to B.C. and

Enbridge’s Line 3

replacement that runs from Alberta to Wisconsin.

St-Arnaud said a slew of Liberal policies, such as the one banning oil tankers on B.C.’s northern coast, likely played a role in holding back industry investment, but many of the problems today are bigger than Ottawa.

The reason why some Albertans feel left behind and why their quality of life has not returned to the highs of the boom era has more to do with economics than with politics, he said.

The clearest way to understand this argument is to follow the money. During the peak of the boom, the amount of cash annually flowing into the oilpatch was roughly equivalent to the entire economies of small countries such as Cuba or Uzbekistan.

Oil and gas companies spent $80.7 billion on their operations in 2014, driven by a surge in the oilsands. The windfall was an engine of staggering growth: Two dozen projects were

under construction

. Worker camps — many of them more like lodges, with leather recliners, big screens and AAA steaks on the menu — were home to 47,000 people. Airlines dramatically

scaled up their flight schedules

for boomtown Fort McMurray to accommodate the thousands of workers pouring in from across the country.

“Agencies like your food bank, or your United Way, or your hospital foundation always made lots of money because industry was so flush,” said Melissa Blake, who was mayor of the Regional Municipality of Wood Buffalo, which includes Fort McMurray, from 2004 to 2017.

“The hotel rooms were all full all the time. We had concerts coming into town, which we never did when I was growing up. It was hard to host sporting activities because we’d have to put (the athletes) up in work camps as it was the only available space.”

The surging

population

, crowded schools and scorching-hot

housing market

were all byproducts of the oilpatch’s boom.

In the years since then, Canadian energy companies have not spent so lavishly. This year, they won’t even come close. They’re expected to spend $31.4 billion, less than 40 per cent of the funds they unleashed 11 years earlier, according to the

ARC Energy Research Institute

.

Critics of Liberal policy put much of the blame squarely on the shoulders of Trudeau, whose government was first sworn into office in late 2015, deep into Alberta’s recession. An agenda of stronger environmental regulations coincided with an era of sweeping belt-tightening in the oilpatch. Foreign energy giants that had once barrelled into Alberta to claim a piece of its black gold were suddenly in another stampede, this time leaving the province en masse.

But economists say this argument cannot explain what happened outside Canada. Companies in energy-producing countries around the world had also spent

record amounts of money

during the boom years and they, too, have never spent anything like it since.

“We’ve been very good at spinning it that everything is the fault of the federal government and not looking at the fact that there’s a global context,” St-Arnaud said.

In the massive swirl of change that consumed the oil industry in the post-boom era, economists say the single biggest catalyst of all was a

warming climate

. A spate of forecasts predicted that greener technologies, from

electric vehicles

to

renewable power

, would lead to much lower demand for oil than what was previously understood.

“That was undoubtedly the biggest change for the sector,” Trevor Tombe, an economist at the University of Calgary, said.

The

International Energy Agency

expects global oil demand will plateau by the end of the decade. Researchers at investment bank Goldman Sachs Group Inc. say the decline will start

in the latter half of the 2030s

. Some industry groups, including OPEC, reject this view and believe oil demand will continue to rise for decades to come.

Still, Tombe said anxiety over peak demand changed the industry. The line that divided the before-times from the aftermath of Alberta’s last major boom became a canyon.

“Pre-2014, when you would look at oil production projections, whether from industry or the Alberta Energy Regulator or others, they featured considerable growth in the years ahead,” he said. “Now, you just don’t see that. There’s still projections for growth, but not at the scale that we saw then.”

One sign of this change would arrive the next time the oilpatch’s arsenal of cash overflowed. This time, there would be no confetti cannon.

A different kind of boom

Like many Canadians, Stephanie Seto watched in horror as Russian troops invaded Ukraine in early 2022. She thought about a dear high school friend, a Ukrainian who often returned to her home country. She thought about all the Ukrainians whose homes were suddenly under assault.

Seto, a health-care worker from Toronto, said one thing she was not thinking about was oil prices, even though much of her personal wealth is tied to oil and gas.

“I thought about the poor, innocent people impacted and trapped, and animals impacted, as it always happens with war,” she said.

Still, oil markets were seized with the implications of the invasion. North American prices spiked above US$100 a barrel for the first time since 2014. Financial institutions and governments in the Western world

attempted to isolate and punish Moscow

for its unprovoked attack, creating massive bottlenecks for Russian oil exports.

Fears of supply shortages led to a historic run in oil prices and the biggest boom ever for corporate earnings in the industry. Canadian oil and gas companies recorded $64.5 billion in profits in 2022,

according to Statistics Canada

.

All of this would have real implications for investors such as Seto. She had been investing her own money in the stock market since 2010, with a major focus on oil and gas. One of her parents had worked in the industry for 31 years, so it was a natural place to park her money.

She said she doesn’t pay too much attention to short-term dips and rallies because she doesn’t trade. She’s a set-it-and-forget-it kind of investor.

“When my money goes in, it doesn’t come back out,” she said.

Seto’s oil holdings would become a shock absorber for her portfolio. The rally was one bright spot in a historically dark stretch for markets and the economy. The effects of Russia’s invasion helped fuel the most severe round of inflation in a generation, leading to a painful bout of rising interest rates and a wave of pessimism that tanked stock markets.

The mix of high prices and escalating borrowing costs had meant that oil companies were already facing barriers in reinvesting their largesse in new production. They also had an explicit set of marching orders from their investors.

In the years since the last major boom turned to bust, shareholders demanded that oilpatch executives avoid expensive, long-term projects. Crucially, these companies were to pay down debt and return more of their cash to investors by buying their own shares in the stock market, which can increase the price, and by paying dividends.

This meant that 2022 became a blockbuster year for oilpatch shareholders.

Suncor Energy Inc.

and

Canadian Natural Resources Ltd.

, two of the country’s largest producers, returned a combined $18.2 billion to investors.

Seto said she reinvests all her dividend payments into stocks, so the firehose of cash that oil companies trained on their shareholders didn’t amount to an instant payday for her.

Over time, her strategy has paid off. She credits her oil and gas holdings as a key driver that pushed her overall portfolio past the $1-million mark for the first time this summer.

“I took a screenshot of it, and I thought, ‘Oh my god, I have $1 million in investments right now,’” Seto said.

The beneficiaries of the 2022 oil boom were not 20-something workers making a fortune fresh out of university. The glory days that folks such as Tyler Pubben enjoyed may be long gone. It was investors like Seto and, more significantly, big institutions and money managers who reaped the spoils.

Canadian governments benefited, too. The industry paid a record $33.7 billion in royalties that year.

Pubben has seen myriad changes in the oilpatch over the 15 years he’s been working in it. Oil companies became far more efficient, having learned how to drill oil and gas wells deeper and faster with fewer workers. An era of spending with reckless abandon gave way to a culture of unwavering fiscal discipline.

Companies when he started out were proposing massive new export pipelines that would have shipped Alberta oil in every direction from the province, save the North. Now he is witnessing the pipeline debate come full circle.

“At some point, we will see a new export pipeline,” he said. “From my little corner of the industry, I just don’t see a lot of those jobs coming back even if another pipeline is built.”

There may not be another bonanza, but that’s perfectly fine, according to people who closely watch the industry.

A new export pipeline to the B.C. coast would allow more oil to reach markets outside the U.S., giving Canada more influence and autonomy, Jackie Forrest, executive director at the ARC Energy Research Institute, said.

“The real question, and the most important question to ask is why, when we’re the fourth-largest producer of oil and the fifth-largest of gas, we’re not already an energy superpower,” she said. “If you look at the definition of a superpower, you’re exporting your energy to many nations, and therefore you have influence and relevance on the global stage.”

By shipping more oil overseas and not relying so much on U.S. customers, Canada could have more leverage in future trade negotiations with the U.S., Forrest said.

A new export pipeline would also bring economic benefits, according to Tombe. It would allow Canadian companies to produce more oil and still get top dollar for it. In the years before Trans Mountain and Enbridge’s Line 3 came online, Canadian oil traded at a steep discount because the industry was producing crude that had nowhere to go.

Eventually, the newer lines will fill. Another one would mean the industry will continue to fetch attractive prices, leading to more royalties and higher corporate income tax revenues for provincial and federal governments.

“Just because something doesn’t spur a bonanza doesn’t mean it is not an important policy to pursue,” Tombe said. “Almost everything that the government does doesn’t lead to bonanzas, but they’re still worth doing.”

• Email: rsouthwick@postmedia.com