With the price of crude oil plummeting, why some countries are faring much better than others.
OTTAWA — For as long as 400-ton dump trucks have been rumbling around the open pit mines of Canada’s oil sands, crews from Kal Tire have been on hand to replace and repair their $70,000, 13-foot diameter tires.
But the relationship, going back over a decade, didn’t spare the company when oil prices began plummeting.
Dan Allan, the senior vice president of Kal’s mining tire unit, said that customers immediately began looking for price concessions. Others asked Kal to withdraw personnel from some sites or swiftly canceled plans to add more maintenance crews.
“We’re sort of caught at the sharp end of the spear,” said Mr. Allan, who is now looking to relocate some employees. “It’s really difficult.”
Canada’s oil sands — and the 167 billion barrels of reserves — prompted an unprecedented expansion over the last decade. But the roughly $155 billion spending spree left the industry with unusually high production costs.
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“The past few years have been just been catching up with the growth we’ve had,” the mayor said. “There’s a bit of an advantage from having a less robust industry.”
A break, Ms. Blake, said should allow the community’s infrastructure to finally catch up with its growth.
Ms. Blake said she had seen no obvious signs of a slowdown around town, like emptier stores and restaurants. But that, she said, is probably because most of the 79,000 full-time residents of Fort McMurray are in less vulnerable jobs. That’s probably not the case, she acknowledged, for about 39,000 people who fly in to work on oil sands projects but make their homes elsewhere, often on the other side of Canada.
But if the slump in prices proves to be sustained, Ms. Blake acknowledged that few would escape its effects.
“There’s going to have to be a real battening down of the hatches,” she said.
