Friday, 8 December 2017

First jobs tough to get in Alberta last year

Published: The Owl
By: ATB Financial's Economics & Research Team

It may have been selling corn dogs at the summer fair or clearing tables at a local restaurant--all of us will vividly remember our first real jobs. Entry-level employment is rarely glamorous or high paying, but those first jobs are critical for gaining valuable work experience.
Statistics Canada, in a report titled “Getting your foot in the door: A look at entry-level job vacancies in Canada” profiles the kinds of jobs offered to new workers. It explores topics such as: How many entry-level job vacancies are available? What are their characteristics? Which occupations offer entry-level positions?

It also profiles the unemployment rates among entry-level workers by province. The chart below shows the 2016 jobless rate for entry-level jobs compared to the overall job market. For most provinces, the unemployment rate for entry-level jobs (the blue bar) was lower than was the overall rate (the yellow bar), suggesting that it was easier for people just entering the job market to find work than those who were established in their careers.

However, in Alberta the unemployment rate for entry-level work was actually higher than the overall unemployment rate--it was nine per cent, almost 8/10th of a percentage point greater than the overall rate. (This was also the case in Manitoba and Ontario, although the differences here were smaller.)
So while 2016 was tough for established workers in Alberta, it was even more difficult for young workers or new Canadians looking for their first work experiences. Those corn dog sellers and table clearers may have been quite happy to find the jobs they did.

Monday, 27 November 2017

The strange geopolitics of rising oil prices

By: H.T.
Published: The Economist

Why oil is at a two-year high

A STRANGE paradox underpins the recent rise in the price of oil to around $60 a barrel, its highest level in two years. On the one hand, it partly reflects optimism that when producers from the OPEC cartel meet in Vienna on November 30th they will extend an agreement with non-OPEC producers such as Russia to keep output under restraint until late next year. On the other hand, it partly reflects the fear that regional tensions between Saudi Arabia and fellow OPEC members Iran and Qatar could degenerate to such a degree that they disrupt supply from the world’s biggest oil-producing region. Such are the tensions within OPEC, according to Reuters, that Gulf oil officials have stopped using a WhatsApp chat group that used to be a useful co-ordination tool. So is it feasible to imagine that people who cannot bear talking to each other via social media can still agree to onerous production cuts that are vital to keeping prices high?

The short answer is yes. Throughout its history, OPEC has awkwardly held together despite intense internal squabbles and even conflicts, such as Iraq’s invasion of Kuwait (both OPEC countries) in 1990. Indeed, one reason for the growing confidence about an extension of the deal due to expire next March is that compliance levels were 96% last month. That is remarkable considering the rising tensions between Sunni Saudis and their Shia foes. Even at the best of times in the past, participants have usually started cheating when oil prices have risen.

Besides OPEC and geopolitics, there are other reasons oil prices are on a roll. A synchronous upswing in the global economy means that demand for oil is rising. The International Energy Agency, a global forecaster, recently spooked the market by saying that higher prices were likely to dent consumption of crude next year. That is possible, but with prices still at less than half their peak of 2008, consumers, such as drivers, show no sign yet of jamming on the brakes. Rising global demand and falling OPEC supply may yet flush out more American shale production, which is the main bugbear of oil bulls. Martijn Rats of Morgan Stanley says that to keep the market roughly in balance, shale-producers will have to raise output from 5.8m barrels a day (b/d) to 6.8m b/d over the next 12 months, a 17% increase. However, he notes that a bottom-up analysis of listed shale-producers suggests their production is only growing at about 5% a year, which is not enough to fill the gap. Rather than continuing to pump as fast as they can, they are now focusing on pumping more profitably.

With Brent crude above $60 a barrel, and America’s West Texas Intermediate drawing close, much of this may be baked into the price. Bullish hedge-fund investment in oil futures is close to record highs. If OPEC and the other petro-states disappoint in Vienna this week, there is the risk of a sharp sell-off. But for the first time in several years, the interests of the biggest producers in keeping output under control may be aligned. Saudi Arabia wants high prices to achieve a generous valuation when it part-privatises Aramco, the state oil company. Russia's president, Vladimir Putin, wants them to keep the economy—and hence his regime—stable. And shale producers want them because their investors are demanding higher returns, rather than higher volumes. No paradoxes there.

Friday, 17 November 2017

A Look Back to Looking Forward

By Rod Garland

100 years ago in October and November of 1917, four divisions of the Canadian Corps took turns assaulting Passchendaele ridge in Belgium during WW1. After separate attacks, they succeeded in capturing it and the ruins of Passchendaele village from exhausted German defenders.

The battle that had dragged on for months was one of the deadliest in terms of losses on both sides, but showed the rest of the world how Canadian resolve, spirit and resourcefulness could get the job done.

This week the World Energy Outlook 2017 (WEO-2017) was released by the International Energy Agency (IEA). It is the annual update of energy demand and supply projections to the year 2040, with reports under different scenarios, and their consequences for energy security, economic prosperity, efficiency, investment, air quality and climate change.

The highlights are that the global energy landscape is changing and the rate of change will likely vary over the coming decades.

On the World’s current path, by 2040, global energy demand is expected to grow by 30% with increasing electrification expected to meet this demand and as the cost of renewables decline, clean energy technologies are expected to meet 40% of the growth.

Solar power is expected to be the cheapest form of new electricity in many countries, with third world developing regions leading the growth. A third of energy demand growth is expected from India with China adopting a new economic strategy on a cleaner growth path to reduce pollution.

China is projected to become a world leader in wind, solar, nuclear and electric vehicles and the source of more than a quarter of projected growth in natural gas consumption.

The USA is expected to be the largest exporter of LNG by the mid 2020’s and a net oil exporter by 2030 and the shale oil and gas revolution in the United States continues thanks to the remarkable ability of producers to unlock new resources in cost-effective ways.

Globally, cars are expected to double to 2 billion, but oil for those cars is expected to peak as efficiencies are realized with fuels and with sales of more electric cars, especially in Asian markets.

Oil demand is expected to rise to 105million barrels per day due to commercial transportation, aviation, shipping and petrochemicals and global energy related CO2 emissions are expected to rise slightly.

Severe climate impacts are expected, and commitments to reach limits established by the Paris accord are encouraged.

Definitely not the end of the Oil era

With the United States accounting for 80% of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, it is definitely not the end of the Oil era.

Change in global oil demand by sector in the NPS

Once US tight oil production flattens in the late 2020s and non-OPEC production as a whole falls back, the market becomes increasingly reliant on the Middle East to balance the market.

There is a continued large-scale need for investment to develop a total of 670 billion barrels of new resources to 2040, mostly to make up for declines in existing fields.

As the world’s fifth-largest oil producer and a significant gas producer, Canada is well positioned to meet the demand from other countries. Including from oil sands expansion, oil output is expected to grow from 4.5 million barrels per day to 6.2 million.

Will Canada miss the boat?

Canada’s competitiveness with the USA and other producing countries will be based on its ability to build new oil and gas infrastructure and construct pipelines in all directions. Recent failures in getting large projects beyond the planning stages is a disincentive to investors and producers alike, that has seen investment dollars go elsewhere and some producers scale down operations or leave.

Providing the certainty of a regulatory process that works for industry and that is acceptable to all stakeholders is desperately required. This will need strong, committed political leadership of the energy sector before investment will return.

The rest of the world is watching, we need to re-kindle the will and spirit of our brave men who played such a big part in Passchendaele and get the job done.

The IEA has released outlooks yearly and these projections and predictions are published and available on the IEA website for review. Many of the outlooks, in particular the longer term predictions have not always, if ever, met published expectations, mostly for geopolitical reasons, and more recently with rapid advances in new technologies such as deployed with the development of shale gas & oil.

Rod Garland

Rod has recently joined the CAGC in a member services role. He has been involved in the seismic industry since 1975, notably in the survey and line clearing sectors. He has served as a Board member for both Enform (now Energy Safety Canada) and the CAGC and has also represented industry on numerous environmental & safety committees for both the CAGC and the CSEG. He conceived the concept for Seismic-In-Motion which showcases seismic field technologies and is an editor and contributor of “the Source” magazine. He would be happy to meet with any companies or individuals who support the seismic industry and who would benefit from membership with the CAGC.

Wednesday, 15 November 2017

Red tape chasing investors away from Alberta's energy industry

By Kenneth P. Green, Elmira Aliakbari and Ashley Stedman - The Fraser Institute
Published: Fort Nelson News

         TransCanada Corp. recently pulled the plug on Energy East, its proposed 1.1-million-barrel-per-day oil pipeline between Alberta and New Brunswick, a month after the company said it would conduct a "careful review" of the cost impacts of changes in National Energy Board regulations.
         It was the latest in a chain of bad news for Canada's energy industry, and further evidence that Canada's growing regulatory barriers may be damaging our investment climate.
         Plunging oil prices and the approval of competing pipelines such as Keystone XL certainly contributed to the cancellation of Energy East.
         But governments, by continuing to pile on new taxes and create unclear regulations, are killing existing projects and driving investment away from Canada.
         A 2016 Fraser Institute survey of energy executives and managers found that Alberta has become significantly less attractive to investment over the past few years. In 2014, Alberta ranked in the top 15 most attractive jurisdictions worldwide, but tumbled to 25th in  2015 and continued its downward slide to 43rd in 2016. This ranking is based on a policy perception index score, which measures the extent to which policy deters oil and gas investment.
         So what policies are driving capital and companies out of Alberta?
         Simply put, regulatory hurdles and poor policy decisions by the provincial and federal governments. Alberta's carbon tax, higher corporate and personal income taxes, a cap on greenhouse gas emissions from oilsands production all contribute to a poor investment climate.
         And while Alberta has become less attractive for investment, U.S. jurisdictions such as Texas, North Dakota and Oklahoma have remained amoung the most attractive in the world. The survey showed that in 2016, eight American states were in the top 10 most attractive jurisdictions in the world. Saskatchewan was Canada's only top-performing jurisdiction.
        And Alberta's investment attractiveness will likely continue to fall behind its American counterparts as a new U.S. policy changes, driven by President Donald Trump, favour the energy sector. Trump is simply making it easier to develop oil and gas resources, opening additional lands, suspending onerous regulations, dropping international greenhouse gas obligations, allowing oil exportation and, perhaps, cutting taxes on business.
        Yet in Canada, we have a difficult time getting shovels in the ground for major energy infrastructure projects - at a high cost for Canadians and the economy.
        Studies show that if Canada exported one million barrels of conventional heavy oil and oilsands bitumen a day to world markets at US$60 a barrel, additional industry revenues would reach $4.2 billion annually. And if access to international markets garnered Canadian producers a price boost, the Alberta and Saskatchewan governments could see oil royalties increase by more than C$1 billion annually, assuming oil reaches US$60/barrel.
        That would mean more Canadian (and Albertan) jobs and billions of dollars in revenue for governments, which could be used on vital services such as health care, education and infrastructure.
        But regulatory hurdles and poor policy decisions have crippled Canada's attempts to access new energy markets.
       TransCanada's abandonment of Energy Easts appears to be the latest example of investment walking out the door, leaving Canadian jobs and economic opportunities behind.
            Kenneth P. Green is a senior director, and Elmira Aliakbari and Ashley Stedman are analysts at the think-tank Fraser Institute. 

Thursday, 9 November 2017

The Future for Pipelines in Alberta

By: Rod Garland - CAGC Member Services

The Future for Pipelines in Alberta

The Alberta Enterprise Group recently held a panel discussion in Calgary to analyse the demise of the Energy East pipeline and discuss what it could mean for the future of energy infrastructure and investment in Canada.

Who are the Alberta Energy Group?

Formed in 2007, they are comprised of business leaders who advocate and lobby to improve the prosperity of Alberta as a place to live and conduct business.

Their role is to communicate the benefits of doing business in Alberta; to positively inform the public and policy makers on complex and challenging issues facing the province and the country; and create real change as the community requires. AEG member companies employ over 150,000 Albertans and generate billions in economic activity each year. The Chairman and founding member is Murray Edwards
also Chairman of CNRL.

The panel included Dennis McConaghy – Former Executive VP, Corporate Development – TransCanada Corporation, Dr. Andrew Leach – Associate Professor, Alberta School of Business – University of Alberta and Martha Hall Findlay – President + CEO, Canada West Foundation. The panel moderator was Claudia Cattaneo of the Financial Post

Andrew’s opening comments were that the reasons for the cancellation were about money, timing and regulations. His opinion was that $100 bbl oil is gone, the capacity requirement has diminished and that the length of the pipeline to the east coast through multiple regulatory regimes meant that cost effectiveness was unlikely. Opposition with the keystone pipeline, a long regulatory process and public interest acceptance were other reasons.

Dennis was convinced that TCP would not have successfully got all of the required permits. He mentioned that the changing of rules and regulations including requirements to assess upstream and downstream impacts of carbon emissions that were added late in the process were a key factor in the company’s decision and felt that the “Needs Assessment” should be the prerogative of TCP and shippers of product, not the regulators. He was skeptical that any other similar pipeline project would get built in the future.

Martha believes that the change in US Presidents that led to a quick approval of the Keystone project in the States, would likely lead to a successful outcome of that pipeline making the Energy East pipeline unnecessary. She also believes that the uncertainty with regulations detrimentally affects business decisions that CEO’s have to make and erodes investor confidence and delays for any reason cost money.

In the open free for all discussion the following points were made

Feds haven’t defined exactly what carbon taxes mean.

Carbon taxes shouldn’t have any relevance to whether or not a pipeline should be built that should be made as a needs assessment by industry shippers

The libs and NDP cheered when the company cancelled the project as it would have been a political nightmare for them in Ottawa.

Political sanction comes too late in any new pipeline process after companies have expended time, effort and money which ends up being wasted.

The example of Enbridge’s Northern Gateway pipeline was quoted whereby conditional approval from the Conservative government was granted, only to be cancelled by the subsequent Liberal government in 2016 citing concerns with the route through the Great Bear Rainforest. They also introduced a moratorium on oil tanker traffic on the BC Coast essentially killing the project as viable.

Investors are unwilling to risk capital without a degree of certainty that political decisions won’t stop projects at the last minute.

There is a lack of political leadership in defining a workable energy strategy. Several investors have turned away because of political delay (eg Petro-china, Petronas). Canada is perceived in the eyes of the world as not being able to get projects completed.

Going Forward

In the views of the panel, retaliation doesn’t work, all groups have to be on the same side.

Carbon taxes will have to be addressed to make projects acceptable.

There should be consideration for expanding railroad networks as an option to move product even though pipelines are a more economical transportation system.  New technologies such as converting fluids into pellets that could be safely transported over-land would eliminate the concerns over possible spills from pipelines and from tankers off the BC coast.

Projects shouldn’t require Cabinet approval late in the approval process.

Commitments from politicians that they truly support the hydro-carbon industry should be sought at every opportunity.

Canada needs a competent Energy Strategy

Inter-Provincial barriers should be removed, free trade options encouraged for market access and protectionism should be discouraged.

Follow the Alberta Energy Group at this link

Wednesday, 11 October 2017

'What Trudeau won't tax' hashtag pokes fun at PM

Published: IPOLITICS
By: Janice Dickson

As the Trudeau government continues to defend its controversial tax proposals in the face of fierce private sector criticism, a new hashtag has emerged on Twitter poking fun at the things Trudeau "won't tax."

Conservative MP Michelle Rempel appeared to help initiate the conversation.

"This is just begging for a hashtag. I'll go first. His cabinet Minister's taxpayer funded limo rides to hockey games. #whattrudeauwonttax," tweeted Rempel.

The hashtag emerged after it was reported that a document on the Canada Revenue Agency’s website indicates that employee discounts for merchandise should be treated as a taxable benefit. The document, known as a tax folio, states that when an employee receives a discount on merchandise because of their employment, the value of the discount is “generally included in the employees income.”
But while the Conservatives and lobby groups say the government is targeting retail workers, National Revenue Minister Diane Lebouthillier insisted that’s not the case.
“Our government recognizes the important role that the retail sector and those working in it play in our communities and in our economy,” Lebouthillier said in a statement Tuesday.
“There have been no changes to the laws governing taxable benefits to retail employees. We are not targeting individuals working in retail. The Agency issued a guidance document to mainly provide assistance for employers and is committed to further clarifying the wording of the guidance to reflect this.”

With files from Canadian Press.

Tuesday, 19 September 2017


By: Kevin Turko
Published: Oilfield Pulse

        If one takes the time to surf through all the news and the NEB website, I've got to tell you, it is tough not to get depressed with the state our country is in these days. Before I jump into the middle of this pool, a thought occurred to me the other day which made me wonder how all the politicians, eco-activists and concerned environmentalists would react to the following scenario. I know this is more than a little far fetched as it would cripple the Canadian economy for years to come, but work with me for a few more minutes.
       Let's say, just hypothetically or perhaps hysterically, that we gave in entirely to all the carbon-free warmongers and decided to kill the oil & gas industry in Canada. As they say, we capitulate totally and leave it in the ground. After all, that is what they are dreaming of, and that is what they are being funded for! Nothing less is acceptable in their minds. No amount of dialogue, monetary appeasement or technological innovations seems to matter. The 3rd largest proven oil reserves in the world, somewhere north of 170 billion barrels. Damn the torpedoes, let's just leave those n nasty and carbon infested fossil fuels in the ground. But the world keeps on spinning, and the demand for oil & gas doesn't diminish for decades to come.
         Fast forward to year 2100, and the rest of the world is running out of reserves and we're still sitting on over 100 billion barrels tucked away comfortably across Canada. OK, maybe Western Canada. The UN and other less fortunate countries, now starving for energy, plead with Canada to re-open the flood gates. People around the world will die if we say no! Would we stick to the moral high ground and say no, or would we live up to our renowned friendly reputation and compassionate ways and simply say yes. Of course, we would. But what if we say no? How long do you think it would take some other rogue or desperate state, or our might neighbors to the south, to forcefully and militarily come and get it?
       Perhaps for-fetched today, but in the year 2100, who knows!
        This leads me to the nonsense that we are experiencing with pipeline approval process here in Canada. The NEB is becoming a joke and now a political pawn for our oh so wonderful climate change gurus., and self-proclaimed planet protectors, federal Liberal government. So much for being an independent regulator! This is rapidly turning into a great way to defer the Energy East decision until after the next federal election, or better yet, to delay the Cabinet decision to say NO so long as these companies simply run out of money, give up on Canada and move on. Before you come over the top rope, and this is directed completely to those who disagree with my opinions, yes, I do firmly believe we must protect the environment and be utterly responsible in how we explore, extract, build pipelines, and ship this stuff. But the demand for oil & gas isn't going away anytime soon. Any decade soon! In fact, the entire crop of carbon naysayers and carbon tax supporters will be long gone, turned into ashes, and will be part of the world's eco-system before this ever happens.

  " In addition, the NEB will consider upstream and downstream greenhouse gas emissions (GHGs) in determining whether these projects are in the public interest. The NEB also wants to examine the potential market impacts of GHG reduction targets embedded in laws and policies on the economic viability of the projects."

    " Today's decision establishes the foundations for a thorough assessment based on science, traditional knowledge of Indigenous peoples, and other relevant evidence."
    Oh, for God's Sake! So now TransCanada is also responsible to defend debatable and unsettled climate change science around GHG emissions. Poor souls! I wonder how much more money and time this will cost them? Irving Oil, in a letter to the NEB said, its customers will use "relatively the same" amount of fuel,


and produce the same level of greenhouse gas emissions, whether the Irving-refined oil comes from Alberta through the Energy East Pipeline, or from other sources in the U.S. or overseas. "The scale of downstream GHG emissions will not be influenced by the Project". Bang on! And of course, any surplus oil shipped out of the Bay of Fundy, once refined, will eventually create GHGs. So now the new and improved NEB also needs to consider the downstream GHG emissions in far away countries around the world, to which we have no control nor influence. Whether it's our oil, or oil sourced from another country, the downstream emissions are the same.
    As for the upstream side of the NEB's thorough assessment based on science, let me do the quick math. We have about 170 billion barrels of proven reserves, whether it's shipped through Energy East or not, or whatever other pipeline or rail car or not, will create GHG emissions to get it out of the ground. Fact of life! This project is doomed if TransCanada needs to belly up to the bar and defend every producer in Canada and the GHG emissions they are creating. Again, Oh, for God's Sake!
    And don't shoot me for saying this, but what does the "traditional knowledge of Indigenous peoples" lend to "better understanding the risks associated with potential accidents and system malfunctions that may, for example., lead to an oil spill into the environment" or "upstream and downstream greenhouse gas emissions"? I suspect their traditional knowledge is about as valuable to the subject of pipeline approvals and climate change as is about 99.9% of all other Canadians.
     Rather than the NEB and Federal governments spending all this time and money on determining whether these pipelines are in the public's interest, perhaps they should devote all their time to determine how to get these pipelines built and flowing as safely, environmentally soundly, and expeditiously as possible. They're just not in Canadians public interest, they are in the world's public interest.
     The world needs our oil & gas, maybe not as much today, but that day is coming. When will we finally stop, and replace this constant industry vs. eco-activist infighting, and endless NEB navel gazing with Federal Cabinet leadership to simply get on with the show!
    Oh, For God's Sake!