The collapse in oil has been all the more stunning, though, because it has thrown into question a lot of what Canadians have come to believe about the energy sector and its role as the country’s reliable economic engine. Doug Porter, chief economist at BMO Capital Markets, calls the collapse the “single most important development for the Canadian economy.”

More than a decade ago, when Alberta’s oil boom began, the outlook was promisingly simple: oil supplies were drying up at a time when the world couldn’t get enough. Now both of those fundamental beliefs are being challenged. The so-called end of the age of oil is being replaced by an age in which there’s more crude sloshing around than there is demand for it—the non-technical term for it would be a big, fat oil glut.

The textbook explanation for this shift is that, during the past decade, the market has responded to the imbalance in supply and demand the way it always has—companies invest in new projects and push the limits of technology to unlock reserves, while high prices force customers to curb demand. But that scarcely captures the paradigm shift now unfolding, as American oil production skyrockets to levels not seen in a generation, even as China’s massive economy shows signs of slipping into a long-term lower-growth funk.

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