Virden, Man., sees a post-oil future down the line, but leaders aren't worried yet

Oil production around the southwest Manitoba community of Virden remains steady, and while diversifying the economy away from fossil fuels will be key for the region in the future, it's not an immediate concern for some local leaders.

Residents of Virden — which lies about 70 km west of Brandon — and the surrounding area have benefited financially for several decades from oil extraction. It's something Bruce Dunning, a town councillor who runs a consulting business in Manitoba's relatively small oil industry, has seen first-hand.

"With the combination of oil and agriculture, we've seen the town of Virden survive many downturns and definitely a lot of services, supplies and opportunities in Virden that don't exist in surrounding towns," Dunning said. 

Last year in Manitoba, 225 new oil wells were drilled and an average volume of 6,041 cubic metres of oil per day was produced, representing a 3.4 per cent increase compared to the 5,840 cubic metres per day produced in 2021.

Dunning, who's set to retire in October, remembers when his father took him to work on his first service rig when he was 12.

"He was short-handed and needed someone to fill in," Dunning said. That was 56 years ago and it's an industry Dunning has worked in ever since. 

"There's no doubt there's a financial benefit, because the oil industry pays at a higher level than what the average labour force would pay in Manitoba," he said.

Fletcher Baragar, a professor in the department of economics at University of Manitoba, said the oil industry is only a small piece of the provincial economy, but it has had a big impact on the regional economy.

"We certainly did have our mini boom but we're on the tail end of that now," he said.

Manitoba had its highest volume of oil produced to date in 2013, with an average of 8,375 cubic metres per day.

Baragar said continued improvements in extraction methods and techniques means production will continue but he said the surge of investments, spin-offs in jobs and revenues is going to have "a progressively smaller impact on the Manitoba economy."

Capital expenditures in the sector contribute to the province's gross domestic product, a provincial spokesperson said. In 2022, they said expenditures totalled $658 million compared to $429 million in 2021.

"Oil prices can drive additional capital expenditures and translate to production increases," the spokesperson said.

Oil has been important to the region since the early 50s. Even if oil activity will one day decline, a future with less oil activity in the region is not something weighing heavily on area residents right now.