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October 2010 Alberta Fundamentals

Ally

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Oil, gas and drilling up 60% from last year

EDMONTON — Improvements this year in oil and gas drilling activity should carry over into 2011, the Canadian Association of Oilwell Drilling Contractors (CAODC) said Tuesday.

The first three-quarters of 2010 saw a 60-per-cent improvement over 2009, but were still 14 per cent below the same months of 2008, and significantly under the 2006 mark.

There were 83,359 operating days for the period this year, up from 51,993 in 2009.

Rig utilization in the first nine months of 2010 averaged 38 per cent, compared with 23 per cent in 2009 and 40 per cent in 2008.

CAODC said its forecast for the fourth quarter of this year hasn`t changed from the update issued on May 28. The association expects an average of 400 rigs to run in October through December for a utilization rate of 50 per cent.

Read the full article here.
 

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Power plant, upgrader near finish line

EDMONTON - Work at the Capital Region`s two major industrial projects, worth about $8 billion and employing thousands of skilled contract workers, is almost complete.

And work on the next major project, the North West Upgrading plant near Redwater, won`t begin until spring at the earliest if it`s approved before the end of the year.

South of Wabamun Lake, the $1.9-billion, 450-megawatt Keephills 3 high-tech coal-fired power plant is in its early commissioning stages, with combustion and electrical transmission testing underway.

The number of contract workers has fallen steadily, from 1,800 to fewer than 600 this month as more and more of the operation is turned over to joint owners Capital Power and TransAlta Utilities.

"Basically we are turning on things to make sure they work. And we will be producing power and running the plant before we go online into the provincial power grid," spokesman Mike Long said.

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Crude oil prices to slide up to US$60 range in 2011: Capital Economics

Gas prices at the pump may be creeping up, but that does not mean the price of crude is going to remain elevated as well. In fact, oil prices are expected to slide back to the pre-bubble days of 2007 next year, analysts with Capital Economics said Wednesday.

Julian Jessop, analyst with the London-based firm, predicts the price of a barrel of oil will slide to US$60 a barrel by the end of 2011 as the U.S. dollar recovers and global demand disappoints. This would be the same level as prices in the first half of 2007, before oil went into a bubble that touched highs of almost US$150 a barrel in the summer of 2008.

"Our relatively bearish view on oil prices is based on two arguments," Mr. Jessop said in a note Wednesday.

The first is that recent oil price strength is based on issues in the financial markets that are ultimately temporary. Key is the weakness in the greenback.

Since the currency began its slide in May, the OPEC basket price for crude has climbed to US$80 from US$68, an increase of 18%.

However in sterling and yen terms crude value has only risen by about 6%, and about 3% in euros, he said.

Read the full article here.
 

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Oilsands standards please U.S. officials

Against a backdrop of public questions about how Alberta`s oilsands are being developed, the U.S. State Department`s special envoy for international energy affairs says the province is on the right track.

"Americans want to be good consumers and ask good questions about what the preparations are (for these projects), and I am here to ask those," David Goldwyn said Thursday as he prepared to return to Washington.

The envoy reports directly to Secretary of State Hillary Clinton, and the timing of his visit is linked in part to the approval for TransCanada Corp.`s Keystone XL pipeline which will run south from Hardisty to refineries along the Gulf Coast of Texas.

The heart of the opposition to Keystone XL is the oilsands product it would carry. Greenhouse gas (GHG) emissions are higher for bitumen production than for conventional oil.

"I`m here because you asked us, because one of your companies has applied for a pipeline licence, and under our laws we are required to make an environmental-impact statement and a national interest determination," Goldwyn said.

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Many Alberta boomers mortgage-free

EDMONTON — Alberta baby boomers are the most likely in the country to have paid off their mortgages according to a new survey.

The TD Canada Trust Boomer Buyers Report said Thursday nearly six in 10 Alberta boomers have paid off their mortgage, compared to 44 per cent nationally.

For the purposes of the survey, boomers were defined as those born between 1946 and 1964.

But not everyone in that age group was close to burning the mortgage papers; one in 10 of Alberta`s boom generation have paid off less than 25 per cent.

Boomers in Alberta are also the most likely in Canada to plan to spend their retirement at their vacation home, at nine per cent compared to five per cent nationally, said the report.

Twenty-two per cent of Albertans would consider buying a retirement property in the United States, while 25 per cent are already considering real estate opportunities in the U.S.

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More Canadians seek mortgage broker`s help

The percentage of Canadians using mortgage brokers to buy their homes has increased significantly this decade.

The Deloitte report, Winning Strategies in the Brokered Mortgage Marketplace, released Wednesday, said that in the 1990s mortgage brokers numbered in the hundreds and were a last resort for borrowers unable to obtain a mortgage directly from a bank or credit union.

"Over the last decade, an increasing number of viable options for borrowers have surfaced," said the report. "In addition to branch-based lenders, borrowers can now consult with the banks` own mobile mortgage specialists as well as independent brokers -- while also conducting their own research online.

"In this changing and information-abundant environment, the mortgage brokerage channel has emerged as a legitimate competitor."

The report said the share of transactions increased from 26 per cent in 2003 to 38 per cent in 2009 as mortgage brokers made inroads, particularly with first-time homebuyers and young Canadians.

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Ally

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Many Alberta boomers mortgage free

EDMONTON — Alberta baby boomers are the most likely in the country to have paid off their mortgages according to a new survey.

The TD Canada Trust Boomer Buyers Report said Thursday nearly six in 10 Alberta boomers have paid off their mortgage, compared to 44 per cent nationally.

For the purposes of the survey, boomers were defined as those born between 1946 and 1964.

But not everyone in that age group was close to burning the mortgage papers; one in 10 of Alberta`s boom generation have paid off less than 25 per cent.

Boomers in Alberta are also the most likely in Canada to plan to spend their retirement at their vacation home, at nine per cent compared to five per cent nationally, said the report.

Twenty-two per cent of Albertans would consider buying a retirement property in the United States, while 25 per cent are already considering real estate opportunities in the U.S.

Read the full article here.
 

Ally

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16,743
Oilsands standards please U.S. official

Against a backdrop of public questions about how Alberta`s oilsands are being developed, the U.S. State Department`s special envoy for international energy affairs says the province is on the right track.

"Americans want to be good consumers and ask good questions about what the preparations are (for these projects), and I am here to ask those," David Goldwyn said Thursday as he prepared to return to Washington.

The envoy reports directly to Secretary of State Hillary Clinton, and the timing of his visit is linked in part to the approval for TransCanada Corp.`s Keystone XL pipeline which will run south from Hardisty to refineries along the Gulf Coast of Texas.

The heart of the opposition to Keystone XL is the oilsands product it would carry. Greenhouse gas (GHG) emissions are higher for bitumen production than for conventional oil.

Read the full article here.
 

Ally

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Recession and recovery through the lens of small businesses

Investors often make decisions based on views from on high by economists, analysts and advisers, but it also can be helpful to view the world from ground level, through the eyes of small-business owners closely in touch with everyday consumers.

A small-business panel at a Sage Simply Accounting conference presented some insight into where the economy seems to be going and how to invest accordingly.

In the wake of a Sage survey in which 70 per cent of small businesses said they were negatively affected by the recent recession, and 14 per cent dramatically so, the most pessimistic panel member was George Moen, president of Vancouver-based Blenz Coffee.

"I`ve got the advantage of seeing the consumer in real time, particularly in Western Canada," Moen said. "And we see a culmination of things -- a lack of credit access, uncertainty, and when there`s uncertainty everybody defaults to paralysis.

"I think the reality is that we are in an environment that confused the consumer, confused the investor and particularly confused the small-business owner. The cash register isn`t ringing like it used to, and it ain`t getting any better.

Read the full article here.
 
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