March 2011 Alberta Economic Fundamentals

[Ally]

Exxon to increase Canadian oilsands investment, boost production




NEW YORK ` Exxon Mobil Corp, said oil will account for 80% of its production additions in the next five years, as the world`s largest publicly traded oil company spends more to develop its projects such as those in Canada`s oilsands.




Crude oil prices have recently risen over US$100 per barrel, fueled by investor unease over unrest in the Middle East and North Africa and prompting energy companies around the world to speed up the search for oil. Prior to the price spike, crude oil futures in New York had not traded below US$70 per barrel since last year.




The Irving, Texas, company said on Wednesday it plans capital expenditures of US$34-billion in 2011, up 5.6% from last year, as it invests in major projects, including those in Angola and Canada`s oilsands.





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[Ally]

Shale gas could herald era of unparalled wealth in B.C.





VANCOUVER ` Locked within the shale deposits of northeastern British Columbia lies a natural gas reserve of unparalleled wealth that could push the province into a resource boom unrivalled since the development 50 years ago of the pulp- and-paper industry.







This resource is nothing more than individual, tiny bubbles of hydrocarbon, all that remains of a single organism that lived and died in a primordial sea and was buried in the mud millions of years ago.







But the accumulation of billions of such organisms over time adds up to gas deposits of 250 trillion cubic feet to 1,000 trillion cubic feet, according to the provincial energy ministry.




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[Ally]

Pipeline wins final approval from Ottawa





CALGARY - The proposed Mackenzie natural gas pipeline has received a final nod of approval from Ottawa, bring to a close seven years of regulatory filings and decades of planning.




The certificate of public convenience and necessity issued by the NEB Thursday enables the 1,196-kilometre Arctic pipeline to proceed should backers of the $16-billion project decide to move forward on the line.




The announcement was hailed as a regulatory milestone by lead proponent of the $16-billion project, Imperial Oil, which first filed for approval on the Mackenzie pipeline in 2004.






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[Ally]

Alberta makes top 3 in economic forecast




Jobs will return to Alberta in 2011, helping propel the provincial economy to among Canada's top three, says a report released Friday by RBC Economics.




Alberta's real GDP will grow by 4.3 per cent in 2011, compared with 3.3 per cent last year and a 4.5-per-cent decline in 2009. It would be the fastest growth since 2006.




The report said Alberta's job market will benefit from ramping up of capital investment in the oilsands, driven by higher energy demand from China and other emerging economies and disruptions in crude oil supply in the Middle East.





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[Ally]

Alberta foreign workers can apply to government for permanent residency





EDMONTON ` Skilled temporary foreign workers certified in Alberta`s optional trades can now apply directly to the government for permanent residency instead of having to apply with their employers, the province announced Monday.




The federal government limits the number of people Alberta can nominate for permanent residence. In 2011, Alberta is allowed to nominate 5,000 people. With limited numbers, Alberta`s focus will be on nominating people who currently work in permanent jobs, those who have job offers, and those with the skills and qualifications in occupations that are in demand here.




`We need skilled workers living in Alberta permanently,` said Thomas Lukaszuk, minister of employment and immigration, in a statement. `We have to make sure we are ready for the coming labour shortages as economies around the world are competing for the same skills and the same people. This change will allow Alberta to nominate the most qualified and experienced tradespeople working in occupations that are needed in Alberta.`




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[Ally]

Alberta oilsands spinoffs great for economy: CEO



EDMONTON ` In a world struggling with stalled economies, thank goodness for Alberta's oilsands, says Jayson Meyers, chief executive of the Canadian Manufacturers and Exporters.





"The $40 billion spent last year on project construction and maintenance has had a very positive effect for suppliers ... with benefits spinning off across Canada, the U.S. and other countries," the head of Canada's largest industry and trade association told the annual forecast conference of the Economics Society of northern Alberta this week.





"This $40 billion in private investment is larger than any publicly funded infrastructure project in the world outside China. This investment has kept the Canadian economy going and, from our point of view, kept a lot of manufacturers who supply the oilsands sector above ground.





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[Ally]

Seeds of new energy industry




EDMONTON ` Adding vegetable oil to diesel will soon be the law across Canada, and with millions of hectares planted in canola, Alberta stands to be a big winner in the push to produce the green fuel.




But backers of proposed plants in Vegreville and Lloydminster, two huge projects that could supply half the Canadian market, are still hoping to get production credits from a federal EcoEnergy program which was exhausted in October.




They and other proponents hope funds already set aside but not used ` because the winners can`t get their projects launched ` will become available under the March 22 federal budget and redistributed.



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[Ally]

Alberta mostly immune to fallout of Japan tragedy: Economist




EDMONTON ` Major North American stock market indexes pared earlier losses in mid-afternoon trading Monday, as investors tried to assess the economic impact of the devastating earthquake and tsunami in Japan.




In Toronto, the benchmark S&P/TSX Composite Index was down about 83 points to 13,591.55 at 2:08 pm EDT, well off the morning lows.




In New York, the Dow Jones Industrial Average was down 106 points to 11,937.91, and the S&P 500 Index was lower by 13 points, to 1,291.32.




In Toronto, most sectors were down on the day, with metals and mining stocks ` notably uranium stocks such as Cameco ` taking the biggest hit, falling 2.3 per cent.




Energy trusts rose about one per cent, even though oil prices were slightly lower in New York, at $100.48 US per barrel.



Read the full article here.

 

[Ally]

Exxon increasing oil output, raises spending in oilsands





NEW YORK ` Exxon Mobil Corp, said oil will account for 80% of its production additions in the next five years, as the world`s largest publicly traded oil company spends more to develop its projects such as those in Canada`s oilsands.




Crude oil prices have recently risen over US$100 per barrel, fueled by investor unease over unrest in the Middle East and North Africa and prompting energy companies around the world to speed up the search for oil. Prior to the price spike, crude oil futures in New York had not traded below US$70 per barrel since last year.




The Irving, Texas, company said on Wednesday it plans capital expenditures of US$34-billion in 2011, up 5.6% from last year, as it invests in major projects, including those in Angola and Canada`s oilsands.




Read the full article here.

 

[Ally]

Calgary residential sales and prices rise in February





CALGARY - Overall residential MLS sales and average prices rose in Calgary in February, according to the Canadian Real Estate Association.




In data released Tuesday, CREA said Calgary sales, which included all residential properties, were 1,917 for the month, up by 0.2 per cent from a year ago.




The average MLS sale price was $400,879, an increase of three per cent from February 2010.




Sano Stante, president of the Calgary Real Estate Board, said the local real estate is currently fairly strong - fairly buoyant.




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[Ally]

Developers courted to fund McMahon upgrades





Retail, commercial and residential uses are possible development ideas that could be explored for "underutilized" land around McMahon Stadium.




The University of Calgary has issued a request for proposals for the redevelopment of the McMahon Stadium site, which it has owned since 1985.




The university says the McMahon Stadium Society, which manages the facility where the Calgary Stampeders football club plays, has a long list of necessary upgrades and improvements that need to begin within the next few years.




The university says leveraging the adjacent land could be a source of funds to proceed with upgrades.




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[Ally]

Oilsands fuel U.S. 'bottleneck'




EDMONTON ` While the Middle East turmoil is pushing up oil prices, Alberta heavy-oil producers are facing a `classic bottleneck,` with pipelines running at capacity and storage tanks in Cushing, Okla., almost full.




`This is causing a significant dampening of prices and it will take a couple of years` to sort out, the head of J.P. Morgan global oil research told the World Heavy Oil Congress on Tuesday.




`The upgrader investment (in the U.S.) is in place; it is just a question of getting the oil to market,` Lawrence Eagles said.




This projected improvement assumes pipelines, including TransCanada`s Keystone XL project, will be built, he adds. But Keystone has been delayed as U.S. officials seek more scientific reports on issues such as greenhouse gas emissions and pipeline integrity.



Read the full article here.

 

[Ally]

Alberta economic growth to lead the country in 2012





CALGARY - Alberta's economic growth will lead the nation in 2012, says a new report released Wednesday by TD Economics.




The report forecasts GDP growth of 3.2 per cent for the province in 2012 with the national average at 2.5 per cent.




For this year, TD Economics predicts Alberta's economic growth to be 4.2 per cent, behind Newfoundland and Labrador at 4.7 per cent and Saskatchewan at 4.3 per cent.




At the national level, economic growth for Canada this year is expected to be 3.0 per cent.




Dan Sumner, economist with ATB Financial in Calgary, said the TD forecast is in the same range with what many other economists have been saying recently.




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[Ally]

Oil may hit $200




Oil prices may surge to between $150 and $200 a barrel because of political turmoil in the Middle East and the crisis in Japan, Russian Finance Minister Alexei Kudrin said.




`The growth will be speculative and short-lived,` Kudrin said at a conference in Moscow today. The market may see continued volatility or price increases as a result of the disaster at a nuclear power plant in Japan, he said.




Oil rose from a two-week low as escalating violence in Bahrain stoked concern turmoil may spill into neighboring Saudi Arabia, threatening supplies from the world`s biggest crude exporter.







Crude for April delivery rose as much as $2.17 to $99.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.09 at 10:25 a.m. New York time. The contract touched $96.22 earlier, the lowest level since Feb. 25. Futures are up 20 percent from a year ago.



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[Ally]

Shell sees value in oil sands




In a world where political and regulatory risk have become as big a part of the oil business as finding new supplies, Royal Dutch Shell PLC is expanding its Alberta oil sands mining presence as part of US$100-billion in investment plans over the next four years.




It`s quite a change from barely three years ago, when Shell, the world`s second-largest oil company, had big hesitations about the oil sands because of rising costs and an environmental movement outcry over oil sands mining, the most visually challenged part of the business because of its scarring of the northern Alberta landscape.




With its oil price expectations in a comfortable US$50 to US$90 a barrel range, the AngloDutch major is lining up expansions and new projects onto an already material Canadian base, which it took private four years ago to take full advantage of its growth and integration potential.





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[Ally]

Nuclear troubles benefit gas industry





One industry's disaster is another's gift and nowhere is this more obvious than what has befallen the nuclear power world and how natural gas is perfectly poised to benefit.




Somewhere, in the last several years, nuclear power had morphed from being an anathema to gradually being viewed as a clean, viable option in the mix of electricity generation alternatives.




Increasingly, political leaders and electrical industry execs in North America had been including nuclear as being an important component in meeting long-term power needs. The rhetoric appeared to be shifting from the "build absolutely nothing anywhere near anyone" (banana) to some thing that was in the realm of possibility as long as all the concerns were fully addressed.




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[Ally]

Oil prices rise 2% on Mideast fears





NEW YORK ` Oil prices rose two per cent from near three-week lows on Wednesday as a crackdown on protesters in Bahrain reignited worries unrest in the Middle East could further hit oil supplies.




Concerns about the unrest in Bahrain ` where troops from OPEC kingpin Saudi Arabia have intervened ` as well as intensifying clashes in the streets of Yemen, Syria and Algeria, overpowered a wave of risk aversion caused by the Japan nuclear crisis that hit stock markets.




`The increasing unrest in Bahrain ` and the interest taken by Saudi Arabia in trying to resolve it ` must not be overlooked as a risk driver,` said J.P. Morgan analyst Lawrence Eagles in New York.




Brent for April settled at $110.62, up $2.10, rebounding from its sharpest tumble in 13 months on Tuesday to $107.35, the lowest since Feb. 23.




Read the full article here.

 

[Ally]

The days of $100 oil may be here to stay





Libya may soon cease to be a player in the oil (CL-FT102.020.950.94%) markets, and that`s bad news for anyone who fears that rising oil prices will stall the global oil markets.




Two factors are at play in Libya. The first is the United Nations' vote to authorize `all necessary measures` to protect Libyan civilians as Moammar Gadhafi ramps up his war against the rebels. That not only means a non-fly zone (complete with six CF-18 fighter-bombers from the Canadian air force, by the way), but also, presumably, air strikes on Col. Gadhafi`s ground forces and military installations. In other words, the civil war could morph into international war very quickly, and that would not be good for Libya`s oil infrastructure.





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[Ally]

Natural gas advances




Natural gas futures advanced for third day in New York on bullish technical signals and speculation that damage to nuclear reactors in Japan will divert cargoes of the fuel away from the U.S.




Gas futures climbed as much as 1.5 percent after rising above the 200-day moving average, a sign that prices will head up, said Mike Fitzpatrick, a partner in the Kilduff Group, a New York-based energy advisory company. Prices have gained 8.6 percent since March 11 on speculation Japan`s worst earthquake on record will boost demand for liquefied natural gas.


`Momentum is building in this market amid all the worry about LNG cargoes going to Japan,` Fitzpatrick said. `Prices are above the 50-, 100- and 200-day moving averages, which is an automatic buy signal.`





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[Ally]

U.S. researcher touts cleaner oilsands extraction process





A new oil extraction method that could be used in Alberta`s oilsands and would eliminate the need for the environmentally hazardous tailings ponds responsible for the deaths of hundreds of ducks in the last few years has been developed by U.S. researchers.




Scientists at Penn State University say their closed system using ionic liquids ` salt in a liquid state ` to separate the heavy, viscous oil found in Western Canada from sand uses less energy than current systems and does not create toxic waste water.




`Our process could potentially get rid of those waste water ponds which can be dangerous to the environment, especially the wildlife in the area,` said Paul Painter, the head of the project and a professor of polymer science. `And we think it could potentially be cheaper than the way they extract the oil now.`




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