Finance committee  It's more of a provincial issue. I don't think there is anything we can do as nation about the issue. What I would hope is that the people in the industry take a longer-term perspective on what's really happening. They are reacting to the short-term price changes as if they are a long-term phenomenon, and there is a lot of uncertainty around issues.

Finance committee  There certainly have been people not recalled to Alberta jobs. There has not been a lot of reduction from existing operations within Newfoundland. There has been a delay in one of the projects for a year, the White Rose extension. Right now there aren't a lot of fundamental changes in the province itself.

Finance committee  Sure. I would advise you and industry not to let short-term issues dictate long-term plans. The question you need to make a decision on is, how long the lower prices will prevail and what their impacts will be. If this is a one- to two- to three-year problem, then we shouldn't be cutting expenditure.

Finance committee  That's what happened here. We're talking about one to two million barrels a day, based upon a 93 to 94 billion barrels a day production, and the price dropped by 60%.

Finance committee  That drop is not consistent with the elasticity of demand.

Finance committee  These were all coming through demand effects. Demand elasticity is in a range of 0.1, so we would expect to clear a 2% oversupply. A 20% drop in price will clear that because it's all coming through demand. So if there are any supply effects, you would need that big of an increase.

Finance committee  There must be something else going on.

Finance committee  Clearly, the supply-side impacts have been bigger than anybody anticipated. Demand has been growing, just not as quickly as people originally thought. Most of the effects are demand driven. As for people using tankers for storage, those cases have been going down. Right now, as I said in my presentation, if you look at the most recent drilling report that came out two days ago from the EIA, we will start to see a fall in production come April.

Finance committee  I was just going to say, to answer your initial question, that it depends on how long you think the price change is going to be for. If you think it's a short-term phenomenon, then the reaction will be somewhat different from what it would be if you think it's going to be a longer-term phenomenon.

Finance committee  We are in the process of doing specifically that now for Newfoundland. In terms of people working in Alberta, about 25,000 Atlantic Canadians is the most recent number from Stats Canada, so it's a substantial number. It's the fly in, fly out people who would be adversely affected, and it will have a dramatic impact in rural parts of your province and rural parts of our province, specifically Cape Breton and on the west coast and south coast of Newfoundland.

Finance committee  Thank you. In the interests of brevity as well, I'll just deal with a couple of slides. There's a full slide presentation there for you. I would point out that the oil and gas industry has been extremely important to Newfoundland and Labrador. We have produced about 1.5 billion barrels of oil since the industry started in 1997.