Plunging oil prices take toll on Estevan, Sask.'s economy

It's called the 'Energy City', but these days Estevan, Sask. is more like the quiet city.

The plunging price of oil is pullingthesmallsoutheastSaskatchewan down with it.

The hub of many small communitiesis the hockey rink, and in this case, the Estevan Bruins are noticing a difference.

Coach and GM Chris Lewgood says in terms of corporate sponsorship, the team is not used to being told 'no'.

"Nowadays we will make call backs to companies to see if they can contribute again this year and they won't even be there, they will have moved or closed their doors."

Businesses shut down for good

"For sale"and "for lease"signs are a common sight in Estevan lately, with many businesses having shut their doors for good.

Estevan's backyard may still bebusy with coal, power production and agriculture, but the oilis what drives the economy.

Ray Frehlick's company,Prairie Mud Service,supplies companieswith drilling fluids to extractminerals,oil, gas and potash.He has worked in the industry for more than 60 years.

'You gotta make tough choices.'- Ray Frehlick, Prairie Mud Service

But with the current state of the oil and gasindustry operating at40 per centof what it was two years ago he's had to cuthisworkforce nearly in half.

"We hate to lay off long-term employees, but to survive you've got tomake tough choices."

The frailty of the oil industry is having a ripple effect on many other industries.

Hotels built just fiveyears ago, initially operated atmaximum occupancy.

Today, in some cases,their parking lots are near empty.

Food industry sees impacts

The same can be said for the city's restaurants.

Peter Sereggela owns the Tower Cafe and Tap House. His business is doing better than most thanks to support from the community, but he says cutting back his employees' hours is still inevitable.

"I've had staff that have been here for 15-20 years and they'relike family, so it's real tough."

Food bank busier than usual

Perhaps one of the busiesfood-relatedestablishments in Estevan is the food bank operated by the Salvation Army.

It's what Roy Ludwig, the mayor of Estevan,has to look at from his office window.

"And although oil is starting to turn around, the after effects are still with us and will continue to be with us for some time."

It wasn't that long ago thatEstevan had very different problems.Thecity's infrastructure couldn't keep up with rapid growth.

Today unemployment and vacancy rates continue to climb, while the price of oil hovers around the $40a barrel mark. Ludwig estimates the local unemployment rate is between 6.5 to 7 per cent right now.

Veteransin the oil business, including Frehlick, have seen oil drop to as low as $10a barrel, but some say thedamage it's causedhas never beenthis bad.

"I think it's going torecover in time, but we've got two million barrels of surplus oil being produced a day. Until we get some sanity into our production it's not going to change," said Frehlick.