May 2010

[Ally]

Shale: the next energy game changer

After eking out a living for decades with a beef cattle operation on the rugged border of Pennsylvania and New York state, Fran Westcott has hit the jackpot.

In the oil industry equivalent to a claims rush, energy companies have been flooding into this long-depressed patch of rural Appalachia to tie up land in the gas-rich Marcellus shale. Last year, Mrs. Westcott signed a lease with Calgary-based Talisman Energy Inc. that will allow the company to drill for gas on the 210-hectare parcel in northern Pennsylvania where she grew up and her daughter now raises horses.

She reaped a $489,000 (U.S.) initial payment, plus the promise of future royalties.

But the 65-year-old farmer has yet to cash in on her 371-hectare property in neighbouring New York state, where she has lived for the past 12 years with her husband. Regulations in that state prevent energy companies from employing the technology they need to unlock the natural gas trapped in the shale rock thousands of metres below the surface.

Companies rely upon a drilling technique known as hydraulic fracturing that shoots chemical-laced water deep underground to crack open the shale rock so the gas can escape. They must then dispose of waste water that flows back up the wells.

Read the full article here.

 

[Ally]

Busier year ahead for Edmonton home builders

EDMONTON - Edmonton homebuilders will start a growing number of units in the next two years as the industry rebounds from the recession, Canada Mortgage and Housing Corp. predicted in a report released Wednesday.

Housing starts will rise almost 2,300 from 2009 to 8,600 this year and hit 10,400 in 2011, the federal Crown corporation said in its housing market outlook.

Apartment vacancy rates will fall from 4.0 per cent this year to 3.3 per cent in 2011 while the average rent for a two bedroom unit will edge up from $1,000 to $1,030.

Read the full article here.

 

[Ally]

Alberta welcomes more Chinese investments in oilsands: Stelmach

BEIJING — When Premier Ed Stelmach said in Shanghai this week, "our doors are open," it was a clear invitation for more Chinese investment in Alberta`s oilsands.

In an interview Tuesday, the premier said that the world financial crisis means Alberta oil companies are looking for new investors and China is clearly on their radar.

Stelmach would not comment on how much Chinese investment might be enough or if too much might spark a backlash in Canada, as it has in other nations, but he firmly defended Alberta`s right to accept as much Chinese investment as it wanted in the oil fields.

"The resource is owned by Albertans so the policy decision is one that is Alberta-based," he said.

There are still no oil companies in Alberta that are wholly owned by the Chinese, and the premier underlined that in all the agreements that have been signed with them, "none of this oil is going to China. It is developing oil reserves in Alberta, there is no doubt about it. There has been no request for a certain amount of oil to go to the country of China."

Stelmach said the Chinese "goal is to keep the price of oil reasonable and that is why they are investing in different countries.

"They just made a huge investment in Brazil, established oil fields, the Chinese have. So it is not only Alberta, they have investments everywhere."

Read the full article here.

 

[Ally]

Imperial snubs Alberta workers

When Imperial Oil approved the first phase of its $8-billion Kearl oilsands project last May, Alberta`s struggling metal fabricators heaved a giant sigh of relief.

Since Imperial`s move marked the first major oilsands project to get the go-ahead since the recession hit, homegrown makers of pressure vessels and giant modules hoped Alberta`s $14-billion metal fabrication sector had finally turned the corner.

But one year later, as their order books continue to shrink and their revenues sag, it looks as if those early hopes may be dashed.

Last fall, Imperial and its U.S. parent, ExxonMobil, quietly awarded a $250-million-US order to a South Korean firm to supply the first 200 modules for Kearl.

Read the full article here.

 

[Ally]

Edmonton home prices to jump: Report

Now might be a good time to start looking for that home.

Resale home prices are expected to jump next year to levels not seen since the 2007 boom, the Canada Mortgage and Housing Corp. says in its latest housing market outlook for Edmonton.

The average home is expected to sell for $333,000 this year, a spike of nearly 4% from 2009.

Home values are expected to increase another 3.6% in 2010, when the average property will fetch a record $345,000, says the federal government agency.

In 2007 — at the height of the boom — the average Edmonton home sold for $338,636.

The figures include single family units and condos.

"We`re looking at a market right now that is showing absolute signs of recovery," said Larry Westergard, president of the Realtors Association of Edmonton.

Read the full article here.

 

[Ally]

EI recipients numbers rose in March in Calgary, Alberta

CALGARY - The number of people receiving Employment Insurance benefits rose in both Calgary and in Alberta in March compared to a year ago, while that number fell at the national level, according to data published today by Statistics Canada.

The federal agency reported 19,250 people in the Calgary census metropolitan area received EI benefits in March, up 18.4 per cent from a year ago while in Alberta year-over-year it was up by 19.4 per cent to 52,560.

Across Canada in March, 668,060 people received regular EI benefits, down 2.8 per cent from March 2009.

That was also down 24,200 from February and the sixth consecutive monthly decline.

"Nearly half the increase in beneficiaries that occurred during the labour market downturn has been offset by declines since June 2009 when the number of beneficiaries peaked," said the federal agency.

"In Alberta, the number of EI beneficiaries decreased by 3,110 (from the previous month) to 52,600 in March, bringing the total decline since June 2009 to 10,300."

Read the full article here.

 

[Ally]

Strike 3 for oilsands critics

Statoil ASA and its biggest shareholder, the Norwegian state, fought off an investor revolt against its Canadian oilsands project for the second year in a row at its annual general meeting.

A majority of shareholders at Norway`s biggest energy company voted against forcing it to pull out of Canadian oilsands at Statoil`s meeting on Wednesday. Statoil, which is 67-per-cent owned by the state, bought North American Oil Sands Corp. for about $2 billion in 2007 to tap an area estimated to hold the largest oil reserves outside Saudi Arabia.

"I understand the debate around this activity -- it`s technically challenging and it presents several dilemmas we`re working hard to contribute to resolve," said Helge Lund, chief executive of the company based in Stavanger, Norway. "But these resources are an important component of our future energy supplies."

Greenpeace and the World Wildlife Fund proposed a motion to scrap the project, backed by Norway`s opposition Christian Democrats and shareholders Storebrand ASA, Folksam Group, Opplysningsvesenets Fund and the Alfred Berg Ethical Fund, which combined hold less than one per cent. The government opposed the motion after also defeating a similar effort last year.

Read the full article here.

 

[Ally]

Alberta land sale posts strongest numbers since 2006

Alberta land sales -- a key indicator of future drilling intentions -- in May racked up the biggest total since the peak drilling year of 2006.

Wednesday`s sales of oil and gas drilling rights raised $48 million at $548 per hectare.

Combined with $68 million from the May 5 auction, the May total is $116 million, the best May since $186 million in 2006.

In May 2009, the provincial treasury made a paltry $15 million; in May 2008, it earned $48 million.

Read the full article here.

 

[Ally]

Oil sands get banner week despite `whipping boy` status

They say good things come in groups of three -- which means the oilsands have had a banner week.

First, a shareholder resolution put before Royal Dutch Shell at its annual general meeting requesting the company review its oilsands operations was defeated. This was followed by a similar result on Wednesday coming out of the Statoil AGM in Norway, as shareholders voted down a resolution demanding the company exit the oilsands.

The third piece of good news was a report published by IHS Cambridge Energy Research Associates regarding the importance of the oilsands in meeting future U.S. energy needs.

For an industry that continues to be the whipping boy for environmental groups looking for a purpose, this was all good news indeed.

One presumes that the defeat of the resolutions in Europe, for the second year in a row, might get the environmental organizations to recognize their shrill messaging is being superseded by economic realities.

Read the full article here.

 

[Ally]

Busier year ahead for Edmonton homebuilders

EDMONTON - Edmonton housing starts will continue to rebound through 2011 after three depressed years, Canada Mortgage and Housing Corp. said Wednesday.

Single detached homes will lead the charge this year, with multifamily units rebounding in 2011.

The 5,600 single homes being built this year is 44 per cent higher than last year`s total, which itself was up 49 per cent over 2008. Next year 6,600 single units are forecast, the highest number since 2007.

A total of 8,600 units in all sectors are expected to be built this year, and 10,400 next year.

"Inventories were drastically reduced over the winter and production has been ramping up since last fall to bring new product to market for the important spring selling season," said Richard Goatcher, CMHC`s senior Edmonton market analyst.

Read the full article here.

 

[Ally]

Changing a corner, and possibly helping Edmonton turn a corner

One of the city`s busiest downtown street corners is about to get a splashy, $150-million makeover.

Today`s formal launch of phase one of ProCura Real Estate`s innovative 708-unit Mayfair Village apartment complex at the southeast corner of 109th Street and Jasper Avenue has been years in the making.

When it`s finished, the stylish twin-tower complex -- which will eventually stretch an entire block east to 108th Street -- will house some 900 residents, bringing new life to a blighted stretch of the main drag long dominated by the derelict Mayfair Hotel and a drab surface parking lot next door.

"I see more vibrancy and a lot more street culture coming to this corner," says Randy Ferguson, ProCura`s Edmonton-based COO, who notes that the project sits atop the Corona LRT station. "I see people walking across the street to a grocery store, to the head of the Heritage Trail, and living a very pedestrian-oriented lifestyle, as opposed to a lifestyle built around an automobile."

Although Edmonton still has a long way to go to match the dense urban feel of cities like Vancouver, Ferguson says Mayfair Village is a step in the right direction.

Read the full article here.

 

[Ally]

CMHC long-term outlook sees Calgary home prices bouncing back

The average resale housing price in the Calgary census metropolitan area will increase year-over-year in 2010, following two consecutive years of declines, predicts a new forecast released today by Canada Mortgage and Housing Corp.

"In the first quarter, the average resale price was $394,463, an increase of seven per cent from the same period in 2009," said the CMHC in is Spring Calgary Housing Market Outlook.

"Despite the impressive year-over-year gain, growth in the average price is expected to moderate as the sales-to-active listings ratio continues to trend downward." The average price is forecast to increase 4.4 per cent this year reaching $403,000. Balanced conditions are expected to continue into 2011, when the average price is forecast to rise 3.7 per cent to $418,000, said the CMHC.

The trend in resale activity has moderated in 2010 from the heightened pace experienced toward the end of last year, it said. And with the recent rise in mortgage rates coupled with higher home values, this will push monthly carrying costs upward, "tempering" demand for home ownership.

In 2010, CMHC forecasts MLS residential sales to reach 25,000 units, up by 0.5 per cent from the previous year.

Read the full article here.

 

[Ally]

Edmonton hombuilding back to normal

EDMONTON — Lower inventory, stable demand and improving consumer confidence have boosted home building in the Edmonton region to "normalized" levels from the lows of last year.

Despite rising interest rates, housing starts in the Edmonton region in April nearly quadrupled from a year earlier, when homebuilders downed tools because of recession and oversupply of inventory.

"Basically, what happened is the market returned from last year," said Sandra Young, president of the Edmonton branch of the Canadian Homebuilders` Association of Canada.

"We, as builders, saw sales start returning last fall and they stayed strong throughout the winter months, and that turns into the starts that you see today."

Total home construction started in the region reached 1,407 in April, compared with 355 in April 2009, Canada Mortgage and Housing Corp. reported Monday.

Read the full article here.

 

[Ally]

Busier year ahead for Edmonton home builders

EDMONTON - Edmonton housing starts will continue to rebound through 2011 after three depressed years, Canada Mortgage and Housing Corp. said Wednesday.

Single detached homes will lead the charge this year, with multifamily units rebounding in 2011.

The 5,600 single homes being built this year is 44 per cent higher than last year`s total, which itself was up 49 per cent over 2008. Next year 6,600 single units are forecast, the highest number since 2007.

A total of 8,600 units in all sectors are expected to be built this year, and 10,400 next year.

"Inventories were drastically reduced over the winter and production has been ramping up since last fall to bring new product to market for the important spring selling season," said Richard Goatcher, CMHC`s senior Edmonton market analyst.

Multiple-dwelling starts should reach 3,000 units this year, up 24 per cent from 2009. Multiple units dropped 40 per cent in 2009 due to weakened demand, rising inventories and competition from moderately priced resale units, he said.

Read the full article here.

 

[Ally]

CMHC long-term outlook sees Calgary home prices bouncing back

The average resale housing price in the Calgary census metropolitan area will increase year-over-year in 2010, following two consecutive years of declines, predicts a new forecast released today by Canada Mortgage and Housing Corp.

"In the first quarter, the average resale price was $394,463, an increase of seven per cent from the same period in 2009," said the CMHC in is Spring Calgary Housing Market Outlook.

"Despite the impressive year-over-year gain, growth in the average price is expected to moderate as the sales-to-active listings ratio continues to trend downward." The average price is forecast to increase 4.4 per cent this year reaching $403,000. Balanced conditions are expected to continue into 2011, when the average price is forecast to rise 3.7 per cent to $418,000, said the CMHC.

The trend in resale activity has moderated in 2010 from the heightened pace experienced toward the end of last year, it said. And with the recent rise in mortgage rates coupled with higher home values, this will push monthly carrying costs upward, "tempering" demand for home ownership.

In 2010, CMHC forecasts MLS residential sales to reach 25,000 units, up by 0.5 per cent from the previous year.

Read the full article here.

 

[Ally]

Alberta readies royalty curves, aims to fix soured oilpatch ties

CALGARY - The ball will be in the oil and gas industry`s court after the province releases its long-awaited royalty curves as part of the competitive review process, Alberta`s energy minister said Wednesday.

Speaking at the opening of Bow Valley College, Energy Minister Ron Liepert said the announcement of the curves -- which will be made in Calgary after the close of markets today -- will be the next step in the province`s competitiveness review, which is designed to lure oil and gas investment back to the province.

When asked what oil companies and investors can expect, Liepert was coy, but said the numbers will represent the government`s best efforts to correct a relationship that went sour after it moved to hike royalties two years ago.

"We can expect the culmination of a lot of good work that we`ve been doing with industry over the last 60 days," he told the Herald. "Obviously, there are a lot of challenges today, we`ve tried to create as stable an environment as we can for the investment community and we`ll have to wait and see" how they react.

Today`s announcement is the second plank of a three-part competitiveness review designed to look at fiscal and regulatory policies affecting investment in all sectors of the economy.

Read the full article here.

 

[Ally]

Phase out subsidies to oil and gas, Flaherty urged by bureaucrats

OTTAWA — The Harper government is being urged by its own senior bureaucrats to "lead by example" and deliver on a commitment to phase out subsidies for the oil and gas sector at a global economic summit next month in Toronto.

In a secret memorandum sent to Finance Minister Jim Flaherty and obtained by Canwest News Service, the top bureaucrat in his department recommended it was time to end the tax incentives as part of a move toward a balanced federal budget.

The memo, dated March 18, 2010, follows up on a commitment made last year in Pittsburgh by leaders from the group of 20 economies to "rationalize and phase out" inefficient subsidies to the fossil fuel industry that encourage wasteful consumption to address both environmental and energy concerns.

"As host of the June Leader`s Summit in Toronto, Canada will be expected to lead by example in delivering on the commitments agreed to in Pittsburgh," said the memorandum, signed by deputy finance minister Michael Horgan.

The memo noted that Environment Minister Jim Prentice had also asked Flaherty to introduce some of the measures in the last federal budget and that Prime Minister Stephen Harper would be fully briefed on the issue prior to the upcoming G8 and G20 meetings next month in Toronto and Huntsville, Ont., that he is hosting.

Read the full article here.

 

[Ally]

Calgary`s sliding retail vacancy rate hits renewed boom

Calgary has one of the lowest retail vacancy rates in North America, fuelled by high consumer spending, stable employment and high personal incomes.

Over the past year, the bleak economic picture had some industry experts predicting the retail vacancy rate in the city would be on an upward trend, but that hasn`t happened. Rather, the vacancy rate has fallen to under 1.5 per cent, according to a report by Colliers International, as the city prepares for another retail boom.

"It`s looking a lot better than a lot of people were predicting," said Krystyn Gatto, retail leasing associate with Colliers International in Calgary.

"Our spending is higher than the rest of the provinces, but coupled with that is the fact that we`re largely under-retailed in Calgary," Gatto said.

"When you compare the amount of retail space per capita in Calgary to, say, Vancouver or Toronto, our average is much lower."

Stable employment, strong commodity prices, improving retail sales and excellent long-term growth prospects have combined to create one of the lowest retail vacancy environments in North America, said Colliers` most recent retail report, obtained by the Herald.

Read the full article here.

 

[Ally]

Norwegian, French giants join carbon capture study

Major oil firms with international experience in carbon capture and storage are joining a $50-million study of the huge tropical reef formation 1,000 metres deep in an area north of Fort Saskatchewan, says project operator ARC Energy.

The Canadian arms of France`s Total and Norway`s Statoil have signed on, with another international oil firm and a major Canadian firm expected to sign on shortly. The four will pick up a share of the $7-million industrial partnership tab.

"We are thrilled to have these partners. The major CO2 projects around the world have their names on them. So this level of expertise is really important," said Heather Campbell, ARC Energy`s senior business adviser for enhanced oil recovery.

"For the partners, this gives them an insider view of the reservoir. All the four partners have facilities that are existing or planned in the Industrial Heartland region," said Campbell.

ARC, which holds the oil lease for the area, is spending $16 million on HARP, the Heartland Area Redwater Project, which is now in its second phase.

Read the full article here.

 

[Ally]

Energy industry cheers royalties rollback

The Stelmach government`s royalty rollback continued Thursday with a series of new oil and gas incentive programs designed to spur activity -- at an expected cost of $1.5 billion in uncollected royalties over three years.

The changes threaten the government`s promise to be back into black ink within three years, with the expected revenue loss in 2012-13 exceeding the slim surplus projected for that year.

The government believes the loss will be offset by more than $800 million in additional cash from increased land sales, tax revenue and oilpatch activity

Energy Minister Ron Liepert was in Calgary to announce new royalty scales for energy plays in Alberta, as well an "emerging resources and technologies initiative" to encourage more unconventional development of shale gas, coal bed methane, and horizontal oil and gas wells.

"There is nothing given away," Liepert said. "We, on behalf of Albertans, will be recovering a fair royalty return."

Read the full article here.