Alberta Oilsands Companies: Imperial Oil to invest $8 Billion

Imperial Oil to invest $8 billion in Kearl Project

An amazing story for Alberta Oilsands companies just released. Imperial Oil, owned by US Parent Exxon Mobil and known for it’s retail chains Esso has announced that they will invest $8 billion in the first phase of the Kearl Project. The Kearl Project by Imperial Oil is located north of Fort McMurray and part of the Athabasca Region known for its vast reserves of oilsands. This is an amazing piece of news for the Alberta Oilsands industry as they have come to a standstill in the last 6 months when US per barrel of oil plummeted to $30. With the current price of US per barrel of oil at $60 and the availability of cheaper supply costs, it was an ideal time for Imperial Oil to continue with their project. The Kearl Project is expected to produce 110,000 barrels of oil per day starting in 2012 and this is just the first phase of this project. The entire project will last for over 50 years and is considered one of the best undeveloped Alberta oilsands resources available in the Athabasca region. The cost estimate of $8 billion is inline with Imperial Oil’s previous estimate 5 years ago and it was a matter of waiting for the right timing to announce and begin this project. With the availability of labour now that so many other Alberta Oilsands projects have halted production, Imperial Oil was able to secure more reasonable labour and supply costs for their Kearl Project. All in all this was a win win for the company and for the Alberta Oilsands industry.

$60 US per barrel of Oil is profitable for Alberta Oilsands

Now that $60 US per barrel of Oil is a reality in May 2009 where do we go from here. The Alberta Oilsands has been dependant on US per barrel of oil reaching at least the $60 price and stabilizing at this level. The recent announcement by Imperial Oil with a $8 billion investment in their Kearl Project north of Fort McMurray really tells the world that oilsands is here to stay. Not only will $60 US per barrel of oil stabilize but industry analysts all believe that the price will rise from this level and probably be more at the $80 price per barrel. Of course it is anyone’s guess on what will happen but the big companies in the Alberta Oilsands are starting to make their large investments now the $60 US per barrel of oil is here. Who will be the next major Alberta Oilsands company to make an announcement that they will continue with their project? Will it be Shell or Husky Energy or even Suncor. The availability of cheaper labour and supply costs will definitely make these large projects more viable even if oil falls back to $40 US per barrel. A more planned Alberta oilsands investment environment will benefit labour and companies as stability is a key to success.

US price per barrel of Oil is continuing to rise

Alberta Oilsands will definitely benefit from a rising US price per barrel over $60. Perhaps a stable $80 US per barrel of oil for the next five years will see a good steady growth of projects in the Alberta Oilsands areas of Fort McMurray and Edmonton or Calgary. The availability of financing will also play a key role in the further development of the Alberta Oilsands and this will determine the pace of new projects. With a higher US per barrel of Oil at $60 or more the current players in the market are more able to finance their larger projects with the improved cashflow projections. World demand for oil from Asia and the US will continue to make US price per barrel of oil swell and especially in the summer months when demand for oil is high. Though with the recent rise in oil to $140 and the double whammy of the financial crisis, consumers around the world will be more cautious about their oil consumption habits. This is actually a good thing as it will stabilize demand and keep US per barrel of oil at a more moderate level. Hopefully the availability of other viable alternatives to US Oil will make the price per barrel also more stable.

Alberta Oil is cheap supply for US Obama

Ed Stelmach says US will need Alberta Oil

Alberta oilsands produces a reliable and secure oil source for the US. Ed Stelmach sent a clear message to the Obama administration when he said US will need Alberta oil in the future. It is important for the US to recognize that Canada’s Alberta rich oil sands is a secure and cheap source of oil for the growing US Demand. Fossil fuels including the oilsands will provide more than 80% of the supply needed to satisfy world demand for oil. It is in the best interest for the US to work closely with Canada in implementing a viable solution to develop the oilsands responsibly. Expel the myths and produce the facts of Alberta oil and let the world know what the Alberta oilsands companies can do to protect the environment. In 2008, the Alberta Government created a $2 billion dollar fund to promote solutions to solving the dirty oil problem. This and other solutions from the oilsands’ companies themselves will serve to promote this abundant resource for the growing demand for oil consumption.

Obama concerned about Alberta Dirty Oil

Obama has an aggressive plan to combat climate change. He says that we can not punish the future by exploiting the present and we will not tolerate the increase in green house gas emissions while he is President. This is a direct blow to Alberta oilsands companies and the growing environmental concern about ‘dirty oil’. Alberta’s dirty oil image is a picture of an environmental disaster waiting to happen. We are shown images of Northern Alberta’s oilsands production in Fort McMurray, the Athabasca region, and how the destruction and carnage of the environment is occurring without concern. Environmentalist are adamant that dirty oil in Alberta cannot continue and they will work harder in showing the world the truth that is happening to this ecosystem. Obama further stated that his presidency will reduce the US’s dependence on ‘dirty oil’ for good. Ed Stelmach of the Alberta government on the other hand has been working vigorously in fighting the environmentalist by dispelling the myths behind their stories.

Dirty Alberta Oil: Myths and Facts

Myths about Alberta oilsands are abundant. But what are the true facts of what the Alberta oilsands is doing to the environment. With a $2 billion dollar investment by the Alberta Government in researching solutions to develop the oilsands more cautiously, we are sure to hear a lot of buzz about the oilsands in the near future. One of the myths about the oilsands is the amount of impact that oilsands has on the environment. A study was done comparing the emissions that currently are produced by coal production, a large polluter in the US and China, versus the oilsands. When compared with this polluter, the oilsands represents less than 1 percent of the emissions being emitted by coal production. Another myth follows about the oilsands environmental impact due to tarsands pools created from extracting the oil and leaving the toxic remains behind. Of course the toxic remains have always existed in the area even without removing the oil. The environmentalist are concerned that the process of extracting the oilsands will create a bigger impact than if no production was done. While this may be true of only some rare situations, the truth is that the tarsands production is very careful in leaving behind tarsands pools in a way that will not be worse than the original case. Of course the results are hard to prove by both sides given the short amount of time that has passed since the production of the oilsands.

Subprime lending in Alberta: Truths and Myths

What is the Subprime Market in Alberta

The Subprime Market made the national news in the US and has continued to be a weekly headline. A subprime market is one in where high lending rates are offered to borrowers with lower credit quality. These lenders borrow from the subprime markets because the main banking institutions will generally not lend to these types of investors. The Alberta Subprime Market does exist but not in the same scope as we have seen in the US. The hot Alberta real estate market, especially in areas such as Edmonton, Calgary, Fort McMurray, and Grand Prairie have led investors to borrow like there is no tomorrow. Everyone just wants to be in the real estate market of Alberta and the prices seem to keep climbing. With the price of oil rising to meteoric heights, the subprime market was also lending at meteoric rates with investors leading the way in borrowing from these non-traditional lenders. While the interest rates given by the main banks such as Royal Bank, CIBC, and TD Canada Trust remains at historic lows of 5% on a 5 year fixed rate mortgage, some subprime lenders were writing new mortgages that ranged from 7% to 20%. There have even been cases where investors who needed bridge financing to close on a deal would borrow from these second tier lenders at rates above 30%.

Foreclosures in Alberta as a result of Subprime Lending

Foreclosures in Alberta have seen a dramatic rise in the last 12 months. The year of 2008 has seen the foreclosure rate jump more than 50% with the lawyers working overtime to handle the workload of Foreclosures in Alberta. How can the rate jump so high? It is a direct result of subprime lending in Alberta and specifically in real estate heated markets such as Edmonton and Calgary. The subprime lending has allowed investors to over leverage their financial position and put themselves in an impossible position to maintain their properties. Once the ability to pay the mortgage is not met, these investors desperately try to liquidate their properties in a falling Edmonton and Calgary real estate market. The result is that many homes do not get sold, mortgages do not get paid and the foreclosures start increasing in the double digits. However, put into perspective, the foreclosure rate in Alberta, especially Edmonton and Calgary have been very low. Even with a tripling of the foreclosures in Alberta due to sub prime lending, the actual amount of Edmonton foreclosures is still small. We do not see a subprime crisis the equivalent of the US in Alberta or Canada. Even our subprime lenders are more careful than their US counterpart in giving out their hard earned cash. However we should expect to see foreclosures in Alberta to remain at historic highs for at least another two years while overly optimistic investors untie themselves from the poor investment decisions they have made.

Predictions for Subprime lending in Alberta

We predict that the subprime lending in Alberta will be reduced to normal levels for 2009 and 2010. Lenders such as HomeTrust, Resmor, and some private money lenders are just going to be careful by reducing their risk in a declining Alberta real estate market. Faced with falling real estate prices, the subprime lending activity in Alberta will become even below average over the next 12 months. You also got to know that the subprime lenders themselves are suddenly short of capital and must be conservative in their own portfolios or else face similar fates as the clients whom they lend to. When the economy is not doing well and jobs are not abundant the ability for investors to pay their mortgages will also decline. In a falling economic climate, sub prime lending is going to be placed at a low priority and it will be back to the basics of borrow what you can afford.

Slower pace of development good for Alberta Oilsands

Alberta Oilsands will benefit from the slower pace

The slow down of the development in the Alberta Oilsands and Northern Alberta region will actually have a positive long term affect on the environment. The past few years have been a frenetic pace for Alberta oil sands companies and oilsands developers to quickly develop and buy up more land in Northern Alberta. The higher price of oil caused a euphoria in investment capital being poured into Alberta oilsands companies without any consequence to the environmental impact. The recent slowdown in development will actually benefit Fort McMurray and the Athabasca Region as the region gets some time and breathing room. Some much needed time to take a look at what can be done to develop the valuable resources that the Alberta oilsands offers and to positively impact the communities that they operate in. Yes, the slower pace of development is actually a blessing in disguise and will give Alberta Oilsands companies time to develop a long term strategic plan that will take into account the communities and the environment in relation to the profit potential.

Developing an Environmental plan for the Alberta Oilsands

Many environmentalists and governmental agencies have criticized the Alberta Oilsands companies in their lack of a solid plan for the development of the Alberta oil sands region. This lack of a plan will not only have long term negative consequences to the environment but also affect all the surrounding people living in the communities of Northern Alberta and the Athabasca region and Fort McMurray. A lack of a solid plan is a direct correlation to a lack of responsibility and accountability for the environment that these Alberta Oilsands companies have. It is unacceptable to not have a viable environmental plan for the Alberta Oilsands and many environmentalists around the world are lobbying their governments to take actions to prevent any further damage to the Northern Alberta and Athabasca regions. It is important to immediately address the long term consequences of developing the Alberta tarsands and making sure that the environmental impact is minimized. Having a solid environmental plan for the Alberta oil sands will be a first step in reaching this shared goal and the Alberta Government is also in agreement with this position.

Alberta Oilsands and the Aboriginal Communities

Many Aboriginal Communities, including the Metis Settlement, are affected by the development activities of the Alberta Oilsands. The concerns for health and the destruction of their lands is a primary objective that the Aboriginal communities including Chief Allan Adam of the Athabasca Chipewyan First Nation is striving so hard to achieve. As so many Aboriginal Communities will be affected by the Alberta oil sands companies, it is vital that the rights and concerns of these people be dealt with immediately. We cannot build first and make a plan later for the environmental impact. This is not acceptable and will be a major obstacle for the further rapid development of many Alberta oilsands projects. On the other hand, there has been some good news regarding the environmental plan for the Alberta oilsands and the Aboriginal Communities. There has been a lot of positive development towards drafting of solid plans to protect the environment from the rapid development happening in the Athabasca region. However, as with most talk, people want to see action and it is this action that will help the Aboriginal Communities.

Public views of Environmental impact of Alberta Oil Sands and Alberta Oil Sands Companies

What people think about Alberta Oil Sands

What do you think the public sees when they think of the Alberta Oil Sands? Is it that the Alberta Oil Sands image is one of only monetary gain at the expense of the environment? Or is it even worse and they believe that once the Oil Sands are without oil then the companies will leave a dirty oil legacy and not care about their environmental impact at all. Some people, especially the people who work in the Alberta oil sands, are working hard at dispelling any false beliefs and any wrong public opinions. Of course since the Alberta Oil Sands is so far north and only migratory birds get a birds eye view of the impact, this is a harsh uphill battle for the public relations people who work for these Oil Sand companies. Nevertheless, these Oil Sand firms will spend vast amounts of money documenting their success at reducing their carbon footprint while benefitting not only themselves but the communities and the great country of Canada. This article is about this view of the Alberta Oil Sands and firms that work in the oil sand fields.

What Alberta Oil Sands Companies are doing about their image

Whether we are in a recession or a market boom, Alberta Oil Sands companies are very concerned about what the public views of their operations and their environmental impact. Communities such as Fort McMurray in Northern Alberta are complaining that the big Alberta Oil Sand company is making their environment very dirty. These companies have changed the environment that they live in and will forever leave them with a legacy of dirty oil. This powerful environmental impact will be due to the greed of the Alberta Oil Sands Companies and will not benefit the communities at all. Of course when you talk with the Alberta Oil Sands Companies such as Imperial Oil or Shell you hear a whole different story. The large Alberta Oil Sands Companies’ opinions are that there is a large mistrust in their operations as a result of publics’ high dependence on the industry’s products but poor understanding of what it actually does. More importantly, they say people are viewing their companies from way up from space and only really see lights but not the real detail. In fact, the Alberta Oil Sands company has been doing a lot to counteract the effects of their operations on the environment and they would like to inform the public better of their actions on this front. Hopefully the future of towns such as Fort McMurray will have a positive attitude towards the growth and prosperity of their communities as a direct result of the Alberta Oil Sands companies. This is the image that public relations is working hard and spending a lot of money to achieve. Will it work or will it backfire on them, only time and perhaps the media can tell.

Recent poll of public’s opinion of Environmental Impact of Alberta Oil Sands

A recent poll taken by Alberta Oil Sands companies aimed at finding out public opinion on the environmental impact that the oil sands companies are having and what people really thought about this topic. The poll was a 60 question telephone poll and asked 425 people in Edmonton and an equal number in Toronto. The results of the poll drew similar conclusions including: the Alberta Oil Sands image problems are broader than any one company, that Canadians believe that it’s possible to develop the Alberta Oil Sands while protecting the environment, that they see technology as a large part of the solution, and that they are most concerned about the environmental impact of projects on the fresh water and greenhouse gas emissions.