Two of our three ‘children’ are in Calgary, and the picture out there is not pretty. The Economist reports:

Extracting oil from the sands took off in the late 1990s, boosted by technological advances that greatly reduced costs. Sitting on the equivalent of 173 billion barrels of crude, the provincial government dreamed of making Alberta a new Saudi Arabia (with moose instead of camels). Although some, such as Peter Lougheed, a former premier, called for “orderly” development, a wild rush ensued, causing provincewide labour shortages. Even servers at fast-food restaurants had to be lured with an iPod or other inducements. Now, though, employment is slumping: Steve Vetter, a manager at a firm that services the gas industry, says it recently had 50 applicants for one job; two years ago it would have been lucky to get any.

Extracting oil from tar sands causes more carbon emissions than traditional drilling. At some projects, leaks of toxic material have polluted waterways. So even if the credit crunch eases and the oil price steadies, Canada’s tar sands may face tougher scrutiny from their main customer. The United States has hitherto been an enthusiastic buyer but the incoming Obama administration, packed with environmentalist hawks, may prove much less so, especially as the Democrats also control Congress. Henry Waxman, a Californian green crusader, has become chairman of the House energy committee. He wrote part of an energy bill passed in 2007 that seemed to ban American government agencies from buying oil produced from the tar sands.

It will be a further damper on investment in Alberta if the Obama administration enforces the ban. Canada’s prime minister, Stephen Harper, who will meet Mr Obama soon after his inauguration, said this week that the tar sands would be one of the stickier subjects on their agenda.

On top of the oil bust, Canada’s other commodity exports, such as lumber, are also suffering collapsing demand. After years of good growth, the economy will shrink this year. Mr Harper says it will take up to five years of “big, comprehensive” government stimulus to dig it out of the deep, black hole it is in.

We recognize that all things are in the Lord’s hands. But the Lord doesn’t promise that we will escape unscathed from the problems that beset our world. Our prayer is that Dave and Liz will be able to hold on the jobs that they have – as difficult a task as that might be – through the hard times that we all see coming.

For the complete article on Calgary’s bust see:

http://www.economist.com/displayStory.cfm?story_id=12932252

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