November 2009

[Ally]

Alberta`s Gas producers face bleak Market this Winter

CALGARY - Alberta natural gas producers, already hurting from steep declines in prices, should gird themselves for even softer markets this winter, according to a morning note by UBS Research.

Slower declines and plans to ramp up shale gas production will pull down 2009 average natural gas prices to $4 US from the investment brokerage`s previous forecast of $4.50 US, with 2010 averages falling to $6.25 US from $7.00 US, analyst Andrew Potter said in the research note.

"The revision to our forecasts is the result of changing fundamentals including US production not falling as quickly as expected," Potter said.

The investment brokerage had a brighter outlook for crude oil prices, pushing its 2010 forecast to $75 US per barrel from $70 US driven by a weaker US dollar and slowly strengthening world economies and demand.

Read the full article here.

 

[Ally]

Suncor awards key Contract for reactivated Firebag

EDMONTON — Hot on the heels of Suncor`s announcement last Friday that it`s restarting work on its Firebag 3 oilsands project, Aecon Group has been awarded a key contract at the Fort McMurray site.

"This contract is one of the largest in the history of the industrial group, and signifies for us that work in the oilsands is beginning to ramp up once again," Paul Koenderman, Aecon executive vice-president, said Monday in a news release.

The value of the contract was not disclosed.

Aecon acquired Edmonton`s Lockerbie& Hole in February for $220 million as part of a push to land more work in the oilsands.

Aecon will complete piping, electrical, and insulation work at the Firebag 3 in situ project.

Work will start early next year and be completed by the third quarter in 2010.

Read the full article here.

 

[Ally]

Ravenous Pine Beetle reaches Central Alberta

EDMONTON — After devouring the pine forests of British Columbia, swarms of mountain pine beetles staved off starvation in July and August by climbing up treetops and hitching rides on westerly winds that blew them deeper than ever into northern Alberta.

Beetles now infest trees as far east as Slave Lake and Entwistle in spite of more than $200 million--$60 million in the last year alone--spent by the Alberta government in the last three years to contain the pest, which is as tiny as a grain of rice.

The Alberta and federal governments announced another $25 million on Monday to manage the beetle`s spread from this latest outbreak.

"It came in on a thermal or in the jet streams in July, which infested our forests in a way in these last 90 days that was unexpected," said federal Minister of State Rob Merrifield, who announced Ottawa`s $10-million contribution.

"It has thrown urgency into the entire issue of the pine beetle in Alberta, and because of that, we have to accelerate what we do to be able to deal with it.

Read the full article here.

 

[Ally]

Suncor`s Firebag project generates jobs for Flint Energy

EDMONTON — Restarting Suncor`s Firebag 3 oilsands project means jobs for up to 385 workers at Flint Energy Service`s Sherwood Park modular fabrication facility, the company says.

Calgary-based Flint said in a news release that work is underway and will be completed in the first quarter of 2010.

"As a supplier of choice for Suncor, we are very pleased to see Suncor resume developing its oilsands assets, restarting delayed work and commencing additional project spending," said Bill Lingard, president and CEO of Flint. "We are particularly pleased to have been awarded this contract, getting back to work on this project, and the future opportunities this presents."

Suncor announced Friday it would spend $900 million this year to resume work at the Firebag site, which is expected to produce 68,000 barrels of oil per day by the middle of 2011.

And in another sign of reviving interest in the oilsands sector, UTS Energy announced it sold its 50-per-cent stake in three oilsands leases east of the Firebag River to Imperial Oil and ExxonMobil for $250 million.

Read the full article here.

 

[Ally]

On the rebound: A Road Map to recovery in Edmonton Housing

Organizers called the housing outlook conference held Tuesday in Edmonton The Road to Recovery.

But how far along are housing markets in Edmonton and Alberta and what does the next year hold for resale and new homes?

Here is a recovery road map based on information presented at Tuesday`s conference held by Canada Mortgage and Housing Corp.:

Is the Edmonton resale housing market recovering?

Signs point to a steady rebound. For the Edmonton census metropolitan area, MLS sales will approach previous peak levels in 2010 of 20,500 units sold after the market hit bottom in 2008 with 17,369 homes.

Read the full article here.

 

[Ally]

Government of Alberta News Release. November 18, 2009
New regulations restrict landlords from billing tenants with heat sub-meters

Edmonton... Renters can no longer be charged for the energy used to heat their apartments with uncertified heat sub-meters under new regulatory changes introduced by the government.

"I`ve heard a number of concerns from tenants about the accuracy and fairness of heat sub-meters," said Service Alberta Minister Heather Klimchuk. "These new rules address these concerns and ensure renters are charged fairly."

Under the new Energy Marketing and Residential Heat Sub-metering Regulation, landlords are not allowed to use a heat sub-meter to bill tenants unless the heat sub-meter is certified by Measurement Canada, under the federal Weights and Measures Act. Currently, there are no heat sub-meters in Alberta certified by Measurement Canada. The new rules start Nov. 18 and apply both to existing heat sub-meters and new heat sub-meters.

If a heat sub-meter becomes certified in the future, landlords can use it to bill tenants as long as they clearly disclose:

• the sub-meter readings;
• the amount being charged for the energy;any amount being charged for administrative or other fees; andthe method used to calculate these amounts.

If heat was previously included in the rent, starting to bill a tenant directly for heat is considered a rent increase.

"While developing this regulation, we got input from tenants, landlords, their representative organizations, and we also consulted with Measurement Canada," Klimchuk emphasized.

"In principle, tenants paying for the actual energy they use is fairer and it rewards renters who conserve heat," Klimchuk explained. "But renters deserve to have confidence that the devices used to measure their energy use are accurate and the amount they`re being charged is clear and understandable."

An estimated 3,000 tenants across Alberta are currently being billed through the use of heat sub-meters.

More information on the new regulation is available at: www.servicealberta.ca

 

[Ally]

Saskatchewan deficit projected to reach $1.05 Billion

REGINA — A Saskatchewan Party government that once boasted of being in the pink is now awash in red ink.

The release of the province`s mid-year financial report by Finance Minister Rod Gantefoer on Thursday shows the government now projecting it will take in only $109 million from potash royalties and taxes — $1.8 billion below what it forecast in its spring budget that staked 20 per cent of total revenues on the pink-hued rock.

The government is now spending more than it is taking in and running an operational deficit, even with higher-than-expected oil royalties, tax revenues and federal transfers.

That has required a drawdown from the rainy day Growth and Financial Security Fund of $564.3 million and a special dividend from Crown Investments Corp. of $555 million from the sale of the government`s share of SaskFerco to erase a deficit in the province`s general revenue fund.

However on a summary basis — which includes all of the operations of government including the Crowns — a deficit projected at $25 million at budget is now pegged at $1.05 billion.

Read the full article here.

 

[Ally]

Upgrader plan calls for 2011 start

Owners of what would be one of the largest industrial construction projects in the Edmonton region-- the three-phase, $15-billion North West Upgrader near Fort Saskatchewan-- are anxious to get rolling.

"We are alive and we want to move forward," the firm`s project director told the Resource Industry Suppliers Association on Thursday.

If the delayed project can get a guaranteed supply of bitumen lined up, along with long-term customer contracts and finalized financing, Jerry Crail said things could come together quickly.

"We plan to be doing some stuff on our site this summer, with things getting into full swing by 2011 for the first phase. And when that one is finished, by 2013, we will immediately start phase two, followed by phase three," he said.

The site is cleared, and long lead items, such as a large reactor vessel, are in storage in Duluth, Minn.

Read the full article here.

 

[Ally]

Plunging Potash sales hammer Saskatchewan

WINNIPEG -- Potash sales in the Western Canadian province of Saskatchewan, one of the world`s richest sources of the crop nutrient, have dropped to their lowest level in 37 years, punching a $1.8-billion hole in its budget.

Saskatchewan was expecting $1.9-billion in potash revenue when it set its 2009-10 budget in March, but slashed that estimate to $637.6-million in mid-August. Now it expects to take in just $109-million, its lowest revenue from the fertilizer in 13 years.

"I said when I tabled the budget that the one thing that was going to keep me awake was potash," Saskatchewan Finance Minister Rod Gantefoer told reporters in the provincial capital of Regina while giving his mid-year financial update.

"I didn`t think it would end up turning into a bit of a nightmare."

Mr. Gantefoer projects 2009 Saskatchewan potash sales of 4.4 million tonnes, its smallest output in 37 years.

Read the full article here.

 

[Ally]

Alberta`s Consumer bankruptcies rise again in September

CALGARY - The number of consumer bankruptcies in Alberta jumped again in September as household finances bore the brunt of tne economic downturn.

There were 1,163 bankruptcy filings in September, up nearly one-third from the previous month, according to figures released Friday by the Office of the Superintendent of Bankruptcy Canada.

That was also more than twice the level recorded in September 2008.

Read the full article here.

 

[Ally]

Retail sales in Alberta remain flat

EDMONTON — While Canadians rang up their seventh increase in retail sales in nine months, Albertans` spending remained flat in September.

But that`s an improvement over the previous two months when Alberta sales posted monthly declines, according to Statistics Canada retail trade figures released Monday.

Alberta shoppers spent $4.6 billion in September, the same as in August. Compared to the September of last year, retail sales in Alberta are down 10.4 per cent.

"Alberta`s flat retail activity in September is another reminder that while the provincial economy has stabilized, 2009 has been a recession year," said ATB Financial senior economist Todd Hirsch.

"Shoppers are still spending, but they are exercising restraint and discretion in their purchases."

Read the full article here.

 

[Ally]

Realtors offer payment options

Will that be standard commission, reduced-percentage, no commission or flat fee?

Edmontonians looking to sell their home have a growing array of choices when it comes to reimbursing the realtor or company that closes the deal for them.

There`s the traditional commission of seven per cent on the first $100,000 and three per cent on the balance. Some customers prefer paying a reduced percentage as low as two per cent available at some firms such as Two Per Cent Realty. Other sellers opt to go entirely commission-free with the popular ComFree service and do the work themselves.

Amrik Basra offers another option at his brokerage Executive Flat Rate Realty--a flat rate fee for a full-service, licensed brokerage with Multiple Listing Service access.

"It`s negotiable so we can set a $5,000 flat rate whether the house sells for $450,000, $425,000 or $400,000, he`s going to pay me $5,000 and that`s it," said Basra, who co-owns the firm with his wife where five other realtors also work.

Read the full article here.

 

[Ally]

Momentum returning to Oilsands

EDMONTON / Feel it? Suddenly, there`s a buzz in the air. Alberta`s big, bad oilsands are back in vogue.

Oh, don`t get too excited -- or aggravated, depending on how you feel about North America`s biggest, messiest industrial project.

The oilsands boom isn`t coming back anytime soon. At least, not in its original, chaotic form.

No one is predicting a sudden gusher of overlapping, poorly planned megaprojects, a brand new influx of tens of thousands of foreign temporary workers, or a rapid rebound to $147-US-a-barrel oil prices.

In fact, another spike in prices(however unlikely) is the last thing anyone wants. That includes OPEC, which sees the current $75 to $80 price range as pretty close to optimal.

Read the full article here.

 

[Ally]

Calgary Housing Market surging

One year ago, the downturn in the Calgary residential real estate market was beginning to take hold on the heels of a global financial market meltdown.

But just two weeks into November, preliminary housing sale numbers indicate how dramatically the market has turned since then.

Sales in November of this year will eclipse those for November 2008. And at this pace, average sale prices will also be up from a year ago.

"It has a lot to do with the low mortgage rates," said Nikki Harrison, a realtor with Re-Max Realty Professionals, adding that has stimulated buyers to purchase homes.

Last year at this time, the bad and uncertain economic news contributed to people sitting back and not moving, but now the overall outlook for consumers is more positive.

Read the full article here.

 

[Ally]

Builders likely to meet Forecast

A goal once thought by some housing industry observers to be unrealistic is now within reach.

Unless the bottom totally falls out of the still recuperating single-detached housing market, builders will easily surpass the forecast set for them for the year by Canada Mortgage and Housing Corp.

It`s a goal that will be reached thanks to the strong second half of 2009.

Early on, the federal agency predicted work would likely start on 4,200 detached homes this year.

Halfway through the year, there was some doubt about that estimate, seeing as how starts were then sitting at 1,549.

Read the full article here.

 

[Ally]

Alberta Homebuyers return

New home buyers from Grande Prairie to Lethbridge are jumping back into the ownership market, despite the fact recessionary clouds are still hovering.

Favourable conditions in recent months--including low mortgage rates, inventory reductions and price stabilization--have allowed potential homebuyers in Alberta and across the Prairies to re-enter the market, says Lai Sing Louie, Prairie region economist for Canada Mortgage and Housing Corp.

"As a result, the fourth quarter outlook is more optimistic than our previous forecast," he says, referring to the period from October to December.

Predictions for housing construction starts for the remainder of this year and next have been upgraded, he says.

The construction gap between 2008 and 2009 has closed dramatically in Alberta.

Read the full article here.

 

[Ally]

Housing Prices gaining strength

As the year moves along, resale housing prices are gaining strength, says Royal LePage.

Prices for detached homes in Calgary are showing "slight" increases for July to September compared to the previous three months, says Ted Zaharko of Royal LePage Foothills

Between the second and third quarters, average prices for two-storey bungalows increased to $414,556, up from $400,167, while those of bungalows rose to $401,944, up from $401,600.

The reason is that first-time homebuyers continue to capitalize on low interest rates and well-priced homes in the third quarter, says Zaharko.

Condominiums were one of the only exceptions to the trend, decreasing slightly to $249,500, down from $252,344.

Read the full article here.

 

[Ally]

Oil Industry enters a new Era of Volatility and OpportunityMarvin Romanow knew it wouldn`t be easy when almost a year ago he rose to the top job at Nexen Inc., the Calgary energy giant. Mr. Romanow, the former chief financial officer, was replacing an industry iconoclast in Charlie Fischer, who had retired. Mr. Romanow - a former Saskatchewan boy, just like his predecessor - took the reins just as the financial crisis was biting hard. And the job includes piloting the challenging new Long Lake oil sands megaproject, which relies on steam-assisted gravity drainage (SAGD) technology instead of the classic mining techniques.

First off, who do you cheer for: Stamps or Roughriders?

I have both colours of shirts, so I have sat in both sections through my career in Calgary. I lived and worked in Regina for seven years and football there has a cult status. It was an interesting way to get absorbed in football.

Are you related to former Saskatchewan premier Roy Romanow?

Not that I`m aware of. But it was a very useful name to have when I lived in the province.

Besides football, is life generally a lot more intense?

Since the middle of 2008, there has been a lot of intensity in our industry. That`s been amplified in companies that have a lot of natural gas because gas is suffering far more than crude oil.

Read the full article here.

 

[Ally]

Taxpayers fund CO2 Pipeline

Alberta will spend up to $495 million over 15 years to support the world`s largest pipeline system for collecting and storing carbon dioxide, The Journal has learned.

A letter of intent between the province and Enhance Energy will be signed at a ceremony today, and follows previous announcements for Shell`s Quest project at Scotford and TransAlta`s Pioneer Project at the under-construction Keephills 3 coal-fired turbine near Wabamun.

The three projects together will receive$ 2 billion from the province`s carbon capture and storage fund.

Enhance plans to begin laying pipe in 2011 and start operations in 2012 for its Alberta Carbon Trunk Line.

Much as the 1950s` Alberta Gas Trunk Line formed the backbone for a network of a natural gas collection lines that laid the foundation of a large and profitable gas export and petrochemical industry, the carbon trunk line is expected to grow to deliver CO2 to hundreds of depleted oil reservoirs.

Read the full article here.

 

[Ally]

Surging Oil Prices pose threat to Economic rebound: IEA

Energy - Oil prices would threaten a rebound in the global economy if they rise beyond current levels, the chief economist of the International Energy Agency said on Monday.

"We would like to see oil prices not to go higher than these levels as it is a certain risk to economic recovery," Fatih Birol told Reuters.

Oil prices have more than doubled from the lows near $30 a barrel at the end of 2008 to near $80 a barrel as investors eyed signs of wider economic recovery, which could boost oil demand.

Read the full article here.