March 2011 Alberta Economic Fundamentals

[Ally]

Encana buys into Kitimat LNG project





CALGARY ` Canada`s proposed first liquefied natural gas export terminal at Kitimat, B.C., has a Canadian partner again ` Calgary-based Encana Corp., the biggest gas producer in the country.




The company announced Friday it will buy a 30 per cent stake in the $4.2-billion plant and pipeline project from American partners Apache Canada Ltd. and EOG Resources Canada Inc. to enable it to market the trillions of cubic feet of natural gas it expects to produce in northeastern B.C. to the lucrative Asian LNG market.




`Encana is a natural partner with Apache and EOG for the Kitimat project,` said Janine McArdle, president of Kitimat LNG and a senior Apache vice-president, in a news release.




Read the full article here.

 

[Ally]

Calgary region housing starts positive for long-term




CALGARY ` Long-term expectations for housing starts in the Calgary census metropolitan area are positive, says the Conference Board of Canada.




In its monthly report released Friday, the board also said the seasonally-adjusted annual rate of housing starts in the Calgary region was down in February compared with a year ago.




Long-term expectations are based on demographic requirements.




The board said housing starts on an annual rate were 9, 829. A year ago they were 11,809.




The board said that short-term expectations for the Calgary market were down.




Short-term expectations are based on residential permits.



Read the full article here.

 

[Ally]

Calgary regional housing market statistics







Calgary, March 1, 2011







`According to figures released today by CREBÂ (Calgary Real Estate Board), for the second month in a row, single family home sales in the city of Calgary increased over previous month figures and levels recorded in February 2010. The rise in sales continues to point to a gradual recovery in Calgary`s housing market.







The number of single family home sales in the month of February 2011 were1,169, compared with January 2011, when sales were 791 ` an increase of about 48 per cent. The number of condominium sales for the month of February 2011 was 468. This was up from the 302 condominium transactions recorded in January 2011.





Read the full report here.

 

[Ally]

Sunny outlook in 2011 for Alberta drilling




EDMONTON ` Drilling activity has had its strongest start this year since 2007, according to the Canadian Association of Oilwell Drilling Contractors (CAODC).




Through the first twelve weeks of 2011, there is projected to be an average of 400 active drilling rigs in Alberta, up from approximately 300 last year and only 220 in 2009. During the week of March 15, there were 395 drilling rigs active out of a total rig count of 576.




Earlier this month, CAODC noted that the number of active rigs in Western Canada jumped to 74 per cent of an available fleet of 787 rigs, rising from 66 per cent in January. The association had predicted a 60-per-cent rig utilization rate for the first three months of the year.





Read the full article here.

 

[Ally]

New oil sands chapter




The tiny hamlet of Conklin, a MÃtis community in the heart of the next wave of oil-sands development in northern Alberta, is signing an historic deal Wednesday that marks a new chapter in the relationship between the oil-sands industry and aboriginal communities.




The deal with Cenovus Energy Inc. will give the 300 members of the community benefits worth an estimated $40-million to $60-million over 40 years tied to the growth of oil production from nearby projects ` a form of royalty because the more the company produces, the higher the benefits.




The agreement ` the details of which Cenovus wants to keep secret, but the community wants to tell everyone about ` marks a major win for aboriginal communities seeking to reap long-term benefits from escalating oil-sands activity that is impacting their environment and way of life.





Read the full article here.

 

[Ally]

Alberta retail sales grow 5.5% from a year ago





CALGARY ` Retail sales in Alberta in January were up 5.5 per cent from a year ago ` the second highest annual growth rate in the country among provinces and just behind Saskatchewan`s 6.0 per cent.




Statistics Canada reported Tuesday that sales in Alberta hit $5.2 billion in January which was down 0.5 per cent from the previous month.




Across Canada, sales were up 3.5 per cent on an annual basis to $37.1 billion but fell by 0.3 per cent from December, the second monthly decline in two months.




The largest decrease among all subsectors was registered by motor vehicle and parts dealers (1.5 per cent). Sales at new car dealers (` 1.7 per cent) declined for a second consecutive month after seven months of increases, added the federal agency.






Read the full article here.

 

[Ally]

Natural gas the next 'green hope'



My March 7 column pointing out how much sense it makes, from a supply security and ethical superiority standpoint, for the United States to import oil from Canada`s oil sands rather than from unstable Middle Eastern and tyrant-led North African countries, drew this reader response: `Canada should be encouraging both countries to detox and pursue the very energy alternatives casually dismissed by Morgan.`





So what are those `casually dismissed` alternatives? Remember hydrogen? It has been more than a decade since the prospect of autos powered by hydrogen fuel cells sent shares of Ballard Power to stratospheric levels, only to collapse when the great `hydrogen highway` turned out to be the road to nowhere. Basic laws of physics were lost amid the hype. First, there`s no way of storing hydrogen at ambient temperatures, so if your car sits for a few hours, the hydrogen seeps away. Second, there are no natural hydrogen resources. It must be manufactured from a fossil-fuel based petrochemical process or through a costly electricity-intensive electrolysis process.





The next `green hope` to replace oil was biofuels, ethanol blended with gasoline, and vegetable oil blended with diesel (biodiesel). But even initially enthusiastic environmental groups have realized the folly of trying to farm our way off oil.





Read the full article here.

 

[Ally]

Forecast sees slow recovery for Alberta Energy Royalties




EDMONTON - In a future with less natural gas production and far fewer royalties, Alberta`s ace card will be a steadily rising take from the oilsands, according to estimates from the Canadian Energy Research Institute (CERI).




While it is no secret the oilsands are a growing contributor to provincial coffers, CERI paints a picture of declining production and royalties from Alberta`s natural gas industry for the rest of the decade, but sharply rising oilsands royalties.




Royalties from natural gas and the oilsands totalled more than $8.8 billion in 2009, but just over $4.6 billion in 2010 ` a big cause of the provincial deficit.



Read the full article here.

 

[Ally]

Edmonton EI January numbers down 17.4%




EDMONTON - The number of people living in the Edmonton region collecting regular employment insurance fell in January ` the 10th consecutive decline.




Statistics Canada said Thursday beneficiaries in the Edmonton census metropolitan area decreased year-over-year by 17.4 per cent, or 3,220, to 15,280.




Across Alberta, all 12 large centres posted declines, with the biggest drops in Brooks, Grande Prairie, Red Deer, Camrose and Medicine Hat.




Calgary saw a 29.8-per-cent drop to 14,590 recipients.





Read the full article here.

 

[Ally]

Labour shortage in oilpatch current reality





CALGARY ` Labour shortages aren`t looming in the Alberta oilpatch, they are already here, said the head of the Petroleum Human Resources Council.




As oil and natural gas liquids activity ramps up on the back of strong prices, conventional operations are having to compete not only with like-industries such as construction, but with unconventional projects ` the oilsands.




`Our shortage, just based on activity alone, is now, in 2011,` said Cheryl Knight Thursday at an Economic Society of Canada presentation.




Read the full article here.

 

[Ally]

Energy industry to fuel Calgary's strong economic growth this year





CALGARY ` Calgary`s economy will benefit from an increased energy output in the province this year, says a Conference Board of Canada report.




Glen Hodgson, the board`s senior vice-president and chief economist, said Calgary can expect `sustained` job growth in 2011 and rising consumer confidence which will boost retail activity. His Alberta Outlook report also said residential construction will make a comeback though not as strong as the previous decade.




Read the full article here.

 

[Ally]

Leduc struggles with population boom




LEDUC - For most communities, two per cent population growth per year is considered strong. So for a community like Leduc, where the population has jumped almost 40 per cent in the past five years, its growth has been nothing short of explosive.




But that boom of population and prosperity has also brought challenges for the city of just over 23,000, about 25 minutes south of Edmonton, says Mayor Greg Krischke. `There`s the pressure of infrastructure: underground infrastructure, surface infrastructure like roads, but also above-ground infrastructure like libraries. How soon do you need a second firehall in the community? ` When do you go from having no internal transit to having internal transit? What do you do with snow in the winter?`




Krischke, who is in his third term as mayor, says since its last population boom in the 1970s, Leduc`s growth had levelled off, until about 2006. Since then, it has grown about eight per cent a year, and will likely have grown another eight per cent when the results of next month`s census are tallied.





Read the full article here.

 

[Ally]

Alberta sales activity flat in February



Residential sales activity reported through the MLSÂ Systems of real estate boards in Alberta came in just below year-ago levels in February 2011.








According to statistics provided by real estate boards in Alberta, home sales numbered 3,943 units in February 2011, down just three per cent from the same month last year.









On a seasonally adjusted basis, home sales were even with January, which was the highest level since last April. Nationally, home sales declined six per cent on a year-over-year basis in February.









The provincial average price for homes sold in February was $352,076, up two per cent from a year earlier. The national average price rose nine per cent from year-ago levels to $365,192, although most of that gain resulted from a surge in high end sales in Vancouver.






Read the full article here.

 

[Ally]

Commodities boom here to stay: Carney




The worldwide commodity boom is here to stay, so countries had better be prepared to adjust their economic policies to deal with it over the long term, Bank of Canada Governor Mark Carney said Saturday.




In a speech at the annual meeting of the Inter-American Development Bank in Calgary, Mr. Carney told delegates that commodity price fluctuations driven by `supply shocks` or speculation are often short lived, but the one currently occurring is the result of a large, sustained boost in demand from developing countries, particularly in Asia. And that`s a trend that will continue.





Read the full article here.

 

[Ally]

Oilsands seen replacing fading gas royalties




In a future with less natural gas production and far fewer royalties, Alberta's ace card will be a steadily rising take from the oilsands, according to estimates from the Canadian Energy Research Institute.




While it is no secret the oilsands are a growing contributor to provincial coffers, CERI paints a picture of declining production and royalties from Alberta's natural gas industry for the rest of the decade, but sharply rising oilsands royalties.




Royalties from natural gas and the oilsands totalled more than $8.8 billion in 2009, but just over $4.6 billion in 2010 -a big cause of the provincial deficit.





Read the full article here.

 

[Ally]

Saudi Arabia prepares massive oil rig boost





NEW YORK (Reuters) - Saudi Arabia, the world`s top oil exporter, has unexpectedly called on top oilfield service companies to help quickly boost the country`s oil rig count by 30 percent to expand production capacity, Simmons & Co analyst Bill Herbert said Monday.




Saudi state-run oil giant Aramco met with leading oil service companies, including Halliburton, over the weekend to announce ambitious plans to increase its rig count, Herbert wrote in a research note.




It was not immediately clear whether Saudi Arabia was seeking more rigs to increase its idle spare production capacity beyond an estimated 3 million barrels per day currently, or simply ensure it can maintain the extra pumping power to meet any disruptions in international oil markets.




Read the full article here.

 

[Ally]

Calgary house prices expected to increase





CALGARY ` Short-term year-over-year price growth is expected to be in the five to seven per cent range for Calgary, according to the Conference Board of Canada.




In releasing its monthly Metro Resale Index on Wednesday, the board said Calgary`s real estate market is currently classified as being under balanced conditions.




In February, the average residential resale price rose to $406,216, up from $401,743 the previous month and $394,850 in February 2010.




The board also said that sales, on a seasonally-adjusted annual basis, were up by 6.1 per cent in Calgary to 23,784 following a 2.2 per cent hike in January to 22,416. But that is still down from 23,820 in February 2010.




Read the full article here.

 

[Ally]

Less buyers' remorse for Edmonton new-home owners





EDMONTON - Buyer satisfaction regarding new homes in the Edmonton market has increased since 2009, says the latest J.D. Power and Associates survey.




Overall new-homebuyer satisfaction increased to 711 on a 1,000-point scale, according to the 2011 Alberta New-Home Builder Customer Satisfaction Study.




That translates roughly to 71 per cent.




`That`s definitely a good score and we`ve seen continuous improvement in the Alberta market overall, both Edmonton and Calgary,` said Adrian Chung, senior manager of the real estate practice at J.D. Power and Associates, a marketing information services firm.




Read the full article here.

 

[Ally]

Alberta to expand ethane incentive





EDMONTON ` A program to increase extraction of ethane to support growth of the petrochemical sector is being expanded, the province announced Wednesday.




Initially designed to encourage extraction of ethane from natural gas, the revisions aim to encourage more ethane extraction from off-gases that result from bitumen refining or upgrading. And capturing these off-gases, which are the result of combustion during the upgrading and refining process, will reduce greenhouse gas emissions.




`Alberta`s petrochemical industry is the largest in Canada, and depends on ongoing availability of competitively priced ethane to remain viable,` Energy Minister Ron Liepert said in a release.




Read the full article here.

 

[Ally]

Oilsands spawn satellite successes






After writing about the oilsands for years, it's hard not to become blase about the sheer scale of Alberta's energy riches, or their impact on the Canadian economy.




I ran out of adjectives long ago to describe the raging river of money that flows into the Fort McMurray region, year after year.




While other parts of Canada get excited about a new casino, hotel or uto-parts plant, multibillion-dollar nvestments are a dime a dozen in he oilsands.




Still, even I was taken aback by what Don Thompson of the Oil Sands Developers Group had to say when we chatted Monday. He cast the economic impact of the oilsands in a whole new light, as I'll explain in a moment.



Read the full article here.