Mr. Chair, I've done this before so I know how quickly the time goes. I'll dive right in. I have six observations and seven recommendations.
Observation number one is that the fall in oil prices has been precipitous. There's no doubt about that, but no one should be surprised. Oil prices go up and they come down, and you can't say that something is a crisis or an emergency if you knew it was going to happen sooner or later.
Observation number two is that we are not in uncharted territory here. If you adjust for inflation, the average price for oil over the last 40 years has been actually $50 a barrel, almost exactly where we are today. Any company that assumed prices would stay at $100 a barrel forever, frankly, was being unrealistic.
Observation number three is that we probably need to get used to this price range. The factors that led to the current glut are still in place. International demand is low. Production is still high and showing no signs of slowing. Of course, we have new technology that is reshaping the oil market in the same way that similar technology reshaped the global and regional natural gas markets about a decade ago, which resulted in long-term price declines for natural gas. We can expect something similar in terms of oil.
Observation number four is that the drop in the price of oil has been bad for some Canadians, but good for others. It really depends where you work and where you live. Obviously, it's good for consumers because the price of energy is down. It's also good for some manufacturers because of the lower dollar. That cannot be lost in this discussion.
Observation number five is relates to the labour market in Alberta. The effect of oil prices on jobs has been variable, even in Alberta, and even within our energy sector. The reality is that our energy sector is actually a grouping of industries, at least three different sectors within a sector, so drilling and oil field service, for example, have been hit very hard because companies always respond to low prices by ramping down capital investment very quickly. We've seen that and that's already resulting in dramatic job losses for drilling and oil field service.
The second sector within a sector is oil sands-related construction. Our concern for our members is not right now. Most of our members are working on projects where funding was approved before the price of oil dropped. The big question is what will happen for the next generation of oil sands projects if the price remains where it is right now, but for now, most of our guys are working.
The third sector within the sector is downstream value-added production, so upgraders, refineries, and petrochemical. One of the things we always point out is that during periods of low oil prices, employment in these downstream sectors remains very stable. It's one of the reasons why we always encourage more investment in the downstream because it provides stability even when prices are dropping.
In addition, a lot of our members in construction are finding work this year in what we call shutdowns and turnarounds, which are basic maintenance on existing energy facilities like upgraders and refineries. This just happens and the timing is very good as this happens to be a year with a lot of shutdown and turnaround work, so it comes at a very good time. There's also a lot of commercial work in Alberta right now, so the effect of oil prices on the construction sector is muted.
Observation number six is that I urge members of the committee not to put a lot of stock in what I describe as disaster rhetoric. Winston Churchill famously said that you should never waste a good crisis and that's what's happening with some people who are speaking out with a lot of gloom and doom about the oil sands right now. For example, we heard the president of Canadian Natural Resources talking about a death spiral in the oil sands one day and the next week he was announcing $3.9 billion annual profits. We also hear our premier singing from the doom and gloom song sheet.
I would argue that things are really not that bad and people like our premier and the president of CNR are simply using this crisis as Winston Churchill suggested to take advantage for their own self-interests. In the case of Canadian Natural Resources, they're trying to use the crisis to squeeze contractors. When it comes to the premier, he's trying to squeeze public sector workers.
In terms of recommendations—