October 2011 Alberta Economic Fundamentals

[Ally]

China shifts interest in Canadian energy companies




The $2.2-billion takeover of Daylight Energy by Asian superpower China signals the vulnerability - and also desirability - of companies whose assets are undervalued in the market, say analysts.




The Daylight-Sinopec deal also marks a move away from Alberta's vast bitumen deposits to unconventional natural gas, a resource China has yet to unlock commercially at home.





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[Ally]

LFT seen as remedy for Alberta oilsands traffic snarls




EDMONTON - One day, an LRT train could be whisking riders past long lines of cars and trucks on their way to jobs in - northern Alberta's oilsands.




That`s a potential long-term solution to transportation headaches in the Regional Municipality of Wood Buffalo that can see Fort McMurray workers stuck in mammoth traffic jams 10 kilometres long.




The problem is that unless you fly, Highway 63 is the only way to reach oilsands projects north of Fort ­McMurray that employ about 57,000 people, including roughly 27,000 who drive from homes in the area.



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[Ally]

Alberta oilsands green enough for California




As California mulls just how carbon-intensive to consider oilsands crude while it looks to tweak its emission-reduction rules, a Calgary company has quietly determined it produces oil green enough to supply the Golden State.




Wading into a difficult crossborder discussion that brings in environmental, economic and trade considerations, Cenovus Energy Inc. says the life-cycle - or so-called "wells-to-wheels" - carbon intensities of crude produced from three of its operations are low enough for refiners in California.





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[Ally]

OPEC slashes oil demand forecast




OPEC slashed its estimate for oil demand this year and said it expected sales to stagnate next year, in a forecast Tuesday blaming global economic uncertainty for cutting into the world`s appetite for crude.




Updating last month`s forecast, the 12-nation Organization of the Petroleum Exporting Countries said that it expected demand to be up by nearly 1 million barrels a day this year over last. That projected increase will be 180,000 barrels a day less than its previous estimate, it said.





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[Ally]

St. Albert real estate market slows




Home sales are bringing fewer dollars into the real estate coffers of St. Albert.




Single-family home sales were down $8 million in St. Albert in the first three quarters of this year when compared with sales over the same nine months in 2010. When compared with 2009, January to September sales were down $35 million.




`That has a major effect on the cash flow in the community,` said Jon Hall, communications manager of the Realtors Association of Edmonton, who noted that post-sales purchases are considerable.





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[Ally]

'Stunning job rush continues in Alberta




Alberta continues to churn out jobs at a frenetic pace amid what one analyst described Friday as a period of "blockbuster" employment growth across the country.




The province's unemployment rate dipped to 5.4 per cent in September - from 5.6 per cent in August - following a fifth straight month of job gains, Statistics Canada reported Friday.




The federal agency recorded 8,600 new jobs, bringing to almost 98,000 the number of new jobs created during the past year.





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[Ally]

Plunging oil prices cast shadow over oilpatch




CALGARY ` Continued weakness in world markets and falling commodity prices have cast a shadow on oil and gas producers' outlook for 2012 activity, industry observers say.







As crude oil prices teetered on one-year lows and the European Commission moved to ban imports of bitumen, the Canadian oilpatch has started bracing itself for what could be a grim 2012.







"It's a terrible backdrop," said John Stephenson with First Asset Fund Inc. "Budgets will be slashed and we'll be seeing companies scaling back on their plans for high-cost expansions. That will impact the (oilsands) mining companies first because they are more expensive, from a capital cost and operating cost perspective, at least in this environment."





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[Ally]

St. Albert real estate market slows




Home sales are bringing fewer dollars into the real estate coffers of St. Albert.




Single-family home sales were down $8 million in St. Albert in the first three quarters of this year when compared with sales over the same nine months in 2010. When compared with 2009, January to September sales were down $35 million.




`That has a major effect on the cash flow in the community,` said Jon Hall, communications manager of the Realtors Association of Edmonton, who noted that post-sales purchases are considerable.





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[Ally]

Alberta boomers most likely to expect mortgage-free retirement: TD





CALGARY ` Alberta boomers are the most likely in the country to expect a mortgage-free retirement, according to the 2011 TD Canada Trust Boomer Buyers Report released Wednesday.




The poll said 79 per cent of Alberta boomers expect to be mortgage-free in time for retirement and 62 per cent plan to stay in their current home.




When Alberta boomers do move, they`re most likely to say it is part of their retirement strategy (37 per cent). When they don`t move it is often because of their adult children.






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[Ally]

Oilsands growth threatened by lack of plan




OTTAWA - Opposition to oilsands expansion in "Canada's Texas" and a controversial U.S. pipeline expansion project is growing because of a failure to crack down on pollution that traps heat in the atmosphere and causes climate change, Canada's ambassador to the U.S., Gary Doer, was told by staff in newly released correspondence.




"The anti-oilsands campaign is very real and shows no sign of letting up," wrote Marc LePage, a special adviser on climate change and energy issues at the Canadian Embassy in Washington, in an email sent to Doer.




"This will not go away and will likely intensify in the absence of movement on climate change legislation."





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[Ally]

Arena, airport yield possible investor opportunities




If shovels hit the ground on a new downtown Edmonton arena, realestate investors should dig around area neighbourhoods for house-buying opportunities, says real-estate author Don Campbell.




"I know it's a political football, but just get it done," Campbell said of the controversial arena project, during a stop in Edmonton this week.




"Because the 10-, 12-, 15-year impact on all of those older neighbourhoods that are around there will be substantial - especially when you couple that with the airport redevelopment north of it.




"Those two projects alone will create such a strong economy in Edmonton for a very long time. It will help attract more people in and help older neighbourhoods redevelop."





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[Ally]

Neighbourhoods near Edmonton Airport, proposed arena fertile ground for real estate investors, author says




EDMONTON ` If shovels hit the ground on a new downtown Edmonton arena, real-estate investors should dig around area neighbourhoods for house-buying opportunities, says real-estate author Don Campbell.




`I know it`s a political football, but just get it done,` Campbell said of the controversial arena project, during a stop in Edmonton this week.




`Because the 10-, 12-, 15-year impact on all of those older neighbourhoods that are around there will be substantial ` especially when you couple that with the airport redevelopment north of it.





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[Ally]

Oil prices rise to highest level in a month




A series of encouraging economic reports sparked oil prices (CL-FT) Friday, pushing the benchmark to the highest level in nearly a month.




Investors shrugged off declining oil demand forecasts that came out earlier this week and focused instead on growing U.S. consumer spending, a rise in bank lending in China and a meeting of world leaders to discuss Europe`s debt crisis.





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[Ally]

Calgary house prices, sales rise in September





Calgary home prices rose along with sales in September, according to the Canadian Real Estate Association.




CREA said Monday that MLS residential sales in Calgary reached 1,789 units in September, up 11 per cent from a year earlier. The average sale price rose by 1.3 per cent to $406,252 for the same period.




Sales in Alberta rose by 10 per cent to 4,316 units with the average price up three per cent to $359,637.






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[Ally]

Edmonton shines among Canada's busiest cities




Mark Ryski, chief executive of Edmonton-based HeadCount Corp., has seen the company he founded in 2003 grow 55% in the past three years with just 12 employees.




But his retail traffic and sales analysis firm isn`t the only one doing well. The city`s small and medium business community has been quietly thriving ` even if it doesn`t always get the headlines.




`I think Edmonton does walk in the shadow of Calgary and generally entrepreneurs [in Alberta] walk in the shadow of oil and gas,` Mr. Ryski says. `Instead of ranting and complaining about that . I think the business community is alive and well and thriving.`




Edmonton ranks ahead of all but Regina in the largest Canadian cities for a second year in the annual ranking of entrepreneurial cities by FP/Canadian Federation of Independent Business, called Communities in Bloom, and in fifth position overall among all municipalities across the country.





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[Ally]

Alberta pulp mill gets $9.6 million in 'green transformation' aid




EDMONTON ` Two Alberta pulp mills will get $9.6 million under a federal program to enhance their environmental performance and economic competitiveness.




The West Fraser Mills plant in Slave Lake will get $5.1 million to help it use black liquor, a byproduct of the pulping process, to generate energy.




The project was one of 15 across Canada that won support Thursday under Ottawa`s pulp-and-paper green transformation program.




As well, the Alberta-Pacific Forest Industries mill near Boyle will receive $4.5 million under another federal program to diversify its product offerings by extracting and purifying biomethanol from its pulping process. AlPac`s new extraction process has never been used on a commercial-scale project.





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[Ally]

Thermal oilsands projects reach output record




A report from FirstEnergy Capital Corp. analyst Michael Dunn confirms that while protesters march and regulators delay pipeline projects, Alberta`s output of bitumen from in situ oilsands and heavy oil projects is going nowhere but up.




The energy investment bank report notes that total primary and thermal heavy oil/bitumen production hit a new high in July, with output crossing the 900.000 barrel per day threshold for the first time.




Several factors led to the milestone, including recovery to pre-turnaround levels at Cenovus Foster Creek and first oil from Suncor`s Firebag 3 project.




The report notes combined production at Suncor`s Firebag and Mackay projects averaged 86,900 bpd in July. Eventually, Firebag 3 is expected to produce 62,500 on its own.





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[Ally]

Facing 'dirty' label, oil patch looks to partners




Canada`s energy industry is hoping the European corporate heavyweights in Fort McMurray, Alta., will help to derail a new fuel standard they say discriminates against oil sands crude.




Some time in the next few weeks, European nations will consider a fuel quality directive that seeks to reduce the greenhouse gas intensity of transportation fuels. The draft directive, assembled by the European Commission, includes language setting oil sands-derived crude in a distinct and separate category from other oil. It assigns the oil sands oil a substantially higher greenhouse gas intensity: 107 grams of carbon dioxide per megajoule of energy produced. Most other crudes are lumped into a basket and assigned a value of 87.5.





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[Ally]

Edmonton is running out of space




EDMONTON ` Edmonton has 15 years left before all its planned neighbourhoods are full, new number crunching by the city and development industry suggests.




If current growth trends hold, the three remaining large tracts of land, where no plans have been developed to date, will be fully developed in 35 years, say city staff.




That has city councillor Ed Gibbons calling for a greater sense of urgency to plan for the 7,300 hectares and an industry group warning a strong regional government needs to be considered to balance interests when Edmonton runs out of land.





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[Ally]

Oilsands firms spending to grow




Oilsands spending on construction will continue unabated despite a dip in crude prices, surpassing $18.5 billion within the next two years, according to a new report.




The massive outlay of capital reflects in part producers spending more time finishing engineering plans before starting construction, moving some project timelines' slightly back, said AltaCorp Capital in an industry update Monday.





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