Declining oil prices discourage new oil development - lead To recession:
The discovery of the Leduc oil field in 1947 sparked considerable economic growth and change in
Alberta. This development paled in comparison, however, to the tremendous boom of the 1970s. The
prosperity of the 1970s was primarily due to the decision of the Organization of Petroleum
Exporting Countries (OPEC) to increase the price of oil. As a result,
oil prices jumped
from $3 a barrel in the early 1970s to $44 a barrel by 1981.
Understandably, the provincial economy benefited enormously from this
development, both in regards
to the ripple effect of advances in the energy sector, as well as direct royalties paid to the
provincial government. However, despite "province building" attempts to diversify the provincial
economy, the Progressive Conservative government of Peter Lougheed largely
was unable to shelter
Alberta's fortunes from fluctuating oil prices. When the price of oil suddenly dropped from
$39 a barrel in 1983 to $10 a barrel by 1986, Alberta's economy fell with it. The province remained in
a recession until 1987 when energy markets rebounded.
Alberta remains susceptible to cycles of boom and bust due to its heavy economic reliance
on the export of natural resources. Prior to World War II and the creation of the
Board, prairie farmers were extremely vulnerable to these periods. Today,
western Canadian provinces experience these fluctuations, but in Alberta the ups and downs
of oil and gas dependency are much more pronounced.
This digital collection was
produced with financial assistance from Canada's Digital
Collections initiative, Industry Canada.