December 2010 Alberta Economic Fundamentals

[Ally]

Calgary Oilpatch buoyed as crude reaches 2-year high, demand grows





Crude oil prices have reached two-year highs, marking confidence in a rebounding North American economy while raising concerns about labour shortages in Alberta's oilpatch.








Oil futures hit $90.80 US per barrel Wednesday before settling at $90.55 US, the highest close since October 2008, increasing on a sharp drop in U.S. inventories and cold weather drawing up demand for heating fuel.








Relatively stable oil prices in 2010, averaging just under $80 all year, have boosted activity in Western Canada after a drought of drilling across the prairies, so the industry certainly isn't complaining -- yet.








Some companies already are having to rotate crews between jobs because they can't staff all the rigs at the same time, said Mark Salkeld, president of the Petroleum Services Association of Canada.








"One part of it is good, but we really don't want prices to get too much higher," Salkeld said. "That starts to cause grief."



Read the full article here.

 

[Ally]

Year in review: Caution prevails for oilsands producers





The outlook for oilsands investment -- flash-frozen by the global economic crisis in 2008-09 -- heated up during 2010 but the thaw was uneven to say the least.




While higher oil prices and relatively narrow heavy/light oil price differentials improved short-term economics, a decision by Canadian Natural Resources to split up its Horizon Phase 2 mine and upgrader into several projects and the withdrawal of Shell Canada's application for 400,000 barrels per day of upgrading capacity showed good times had not entirely returned.




Further muddying the waters was an announcement just weeks ago by Suncor Energy and French giant Total to combine to build two oilsands mines and an upgrader worth more than $20 billion over the next several years.




Meanwhile, the number of in situ or thermal projects continued to multiply as foreign investors lined up to inject dollars.






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[Ally]

Alberta pegged among growth leaders





Alberta's resource-fuelled economy will put it among the growth leaders as Canada's recovery sags slightly in 2011, says the Canadian Chamber of Commerce.




In its economic outlook for 2011, published Monday, the chamber says that after a strong rebound from the recession, Canada's economy has recently lost a bit of steam, expanding at an annual rate of just 2.3 per cent in the second quarter of 2010 and a meagre one per cent in the third quarter.




It's expected to finish up the year at 2.9 per cent growth.




"The Canadian economy is chugging along but not at full steam," said president Perrin Beatty in a news release.




"A number of factors are expected to constrain growth below 2.5 per cent in 2011."








Read the full article here.

 

[Ally]

Coming off a terrible year, Edmonton got its mojo back in 2010





EDMONTON - Edmonton's economy regained its footing this year after a crash in energy prices triggered a painful recession in 2009.




The nascent recovery will pick up speed in 2011, the city's chief economist predicts, as robust oil prices and an upturn in manufacturing drive Edmonton's annual growth rate to nearly four per cent.




That's well above the projected national growth rate of roughly 2.5 per cent, according to recent forecasts prepared by Canada's major bank economists.




The good news for Alberta's capital city doesn't end there, either. Over the next decade, as output from the oilsands grows, the city should rank among the top economic performers in Canada, says John Rose, who was appointed Edmonton's economics chief in May.




"We just finished our three-year and 10-year forecasts. We looked at a baseline scenario and a (more optimistic) one, reflecting alternative views on how quickly the energy sector bounces back and to what extent," he says. "Even using a pessimistic scenario, Edmonton's economy still continues to grow. So the real message here is that at least for the medium term, growth is baked into the pie for Edmonton."




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[Ally]

Optimism riding high in Alberta oil patch






Nearly 12,000 oil and gas wells have been drilled in Western Canada in 2010, the second-weakest number of the past decade, but still representing a 30 per cent rebound over 2009.




Oil and gas activity is expected to continue to grow this year, observers say, a bellwether of better economic times especially for rural Alberta, where many of the thousands of oilpatch workers reside and where dozens of oilfield services companies buy meals and rent hotel rooms.




"We're starting to see a lot more optimism in the community not only from 2010 but going forward into 2011," said Mayor Moe Hamdon of Drayton Valley, a centre of unconventional oil development this year.




"And 2012 is projected to be the largest year ever as far as activity in the oilfield in the Drayton Valley area."




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[Ally]

The Bow isn't big enough for growing Encana







CALGARY - Despite its move in 2012 into the massive Bow tower, energy giant Encana (TSX:ECA) is also taking up more space in Calgary's downtown office market.




The Herald has learned that Encana is leasing an additional 300,000 square feet in the Telus building.




The company's growth and its anticipated growth into the future has fuelled Encana's space requirements, said Craig Reardon, vice-president of administration, Canadian division, for Encana.




"Obviously it's right across the street from the Bow," he said. "It's Plus-15 connected and it will allow our employees who are in the Telus building now and in the future to participate in the amenities of the Bow. So it's basically to accommodate our growth strategy."




Encana is currently in six different office buildings in downtown Calgary in about 700,000 square feet.




Read the full article here.

 

[Ally]

Edmonton fire chief to continue building codes battle




Edmonton's top fireman says the fight to improve Alberta building codes is still on years after an early morning inferno destroyed the MacEwan Gardens condo complex.




The city's biggest ever fire caused roughly $20-million in damage, destroying a 149-unit complex, 18 nearby duplexes and damaging 70 other homes.




The fire was purposely lit by an arsonist on July 21, 2007, say police who have yet to make an arrest in the case.




Edmonton Fire Chief Ken Block says Alberta's government has come through with promises since then to change fire codes by forcing construction companies to use fire-resistant gypsum boards used in all new homes with vinyl siding that are built close together.




However, home builders and manufacturers are still coming up with other new building products that are easy to use for builders and homeowners, but dangerous in a blaze, said Block in a year-end interview with the Edmonton Sun.




"Going forward, I tell you this, there will be many more significant fire code changes and they are really badly needed," said Block.



Read the full article here.