Category: Economic

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Alberta Economic Ft Mac

Fort MacMurray Chamber of Commerce Hears About East Energy Pipeline

Energy East pipeline, Fort MacMurray Chamber of Commerce

During a recent Fort McMurray Chamber of Commerce luncheon the vice president of TransCanada addressed the crowd of business people and talked about the Energy East pipeline project. TransCanada Vice President Gary Houston said the pipeline will benefit the economy of Canada and is also one of the safest oil transportation methods possible. According to Houston “We’ve had over 100 open houses across the country since 2013. We’re dealing with nearly 500 municipalities. We’re dealing with 155 aboriginal groups, 5,500 landowners. It’s just a huge undertaking. When you count all the consultants, there are more than 1,000 people canvassing the country trying to get the message out.” Public support is crucial for the success of the project, and Houston is up front about this fact.

Approval for the Energy East pipeline has not been given by the National Energy Board, but that did not stop the presentation on the project at the recent Fort MacMurray Chamber of Commerce luncheon. TransCanada has also started a social media campaign that is quite aggressive, hoping to dispel myths and get success stories about the oil industry out into the public eye. Greenpeace Canada went public with documents last November which showed that TransCanada had a plan to use third party groups for discrediting opponents when efforts to do this by TransCanada fail. The documents read in part “This campaign approach has a strong heritage in the more aggressive politics and policy fights in the U.S., and those lessons and best practices will be critical to our success.” During the speech Houston touched on pipeline safety, saying “We’re now shipping nearly 2,000 barrels a day out of Alberta by train and that’s a big number when you live in Winnipeg, Manitoba, seeing the oil cars going through downtown, People are really waking up to the fact that maybe this isn’t the best way to transport oil over a long distance. A pipeline is under the ground, silent and usually routed away from communities.”

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Economic Ft Mac

Council Evaluation and Project Reviews Hope to Identify Savings

council evaluation, project reviews

Possible future financial issues are the reason for a council evaluation and project reviews in an attempt to identify savings that can be achieved. The capital projects review is necessary in case oil prices stay down and future revenue is decreased as a result. During the meeting Fort MacMurray Mayor Melissa Blake had questions about whether it was the intent to review all 35 projects at once, and Coun. Tyran Ault said he wanted to get through the list. Ault said “I kind of did want to go through 35 projects line by line, but some of them could take 10 seconds.” Mayor Blake was not on board, stating “I’m still getting the sense that this is a terrible idea” and explaining that it was uncertain what type of information the administration could provide on such short notice.

Coun. Jane Stroud, who attended the meeting via teleconferencing, also had questions about the council evaluation and project reviews. Stroud had concerns about the delays for projects involved, and said “We did the budgets in December and we do have the funding for capital projects.” Oil Sands Community Alliance delegate Reegan McCullough stated “We think there are some things that industry have learned in terms of reviewing major capital projects, One of them is taking a look at the population growth. In the near term … there will be basically minimal growth in the municipality.” Blake discussed whether the delegate could come back in the future, saying “You’ll be able to come back at that time with what’s reasonable and what’s not? What I don’t want to do is repeat, repeat, repeat.”

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Economic Ft Mac

Regional Municipality of Wood Buffalo Operating Budget to be Slashed by Millions

Regional Municipality of Wood Buffalo, operating budget

The Regional Municipality of Wood Buffalo council will examine the current operating budget in an effort to cu around $14 million out. This is a precaution in case oil revenues do not pick up and the municipality faces future losses of revenue as a result of lower oil prices. At an audit and budget committee meeting a plan was proposed to eliminate 2.8% of the operating budget, an amount that is a little more than $14 million. The money used to slash the budget numbers will come from discretionary spending that may include contracted resources for projects that are not critical, training, business travel, and goods and supplies ordered. According to Sheldon Germain, who is the committee chair, “I’m very appreciative that we looked at our 2015 operating budget and found close to $15 million dollars. We’re going to continue to monitor the revenue side and the cost side at the end of the first quarter and see if there’s other areas or opportunities that we can be more efficient.”

The council for the Regional Municipality of Wood Buffalo will vote on the discretionary spending cuts in the operating budget at the meeting on March 24, and further options may also be possible once the first quarter fiscal report is available. During the meeting Germain inquired about whether the administration could provide a plan showing what the operating budget would look like with cuts of 5%, 7%, and 10%. RMWB Chief Financial Officer Elsie Hutton explained that the analysis for these plans would not be possible until the first fiscal quarter report is provided.

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Economic Ft Mac

Wood Buffalo Must Prepare For Rebound According to Mayor Blake

Wood Buffalo, Mayor Melissa Blake

Fort MacMurray Mayor Melissa Blake discussed the economy last week with a Parliamentary committee, and she told the committee that the Wood Buffalo area has been through oil price drops before and that one of the important lessons learned in the past was how to get ready for a rebound. Blake spoke to Parliament’s Standing Committee on Finance which is investigating the economic impact that dropping oil prices has. Mayor Melissa Blake stated “In mid-2008, we had our first breather since the rush to oilsands development took hold a decade before. We had a chance to catch up, a chance to plan, a chance to get ready for what was coming next. And what came next was a very busy rebound. Our community is still catching up since the more than doubling of our population since 2000. Experience tells me that it is really hard predicting the price of oil in either direction. From a community perspective, the rapid upswings can be even more difficult than what we’re currently experiencing.”

Mayor Melissa Blake had the opportunity to speak about the Wood Buffalo economy during the last day of the 3 day committee hearing, providing the group with some insight into the special situation and circumstances that Wood Buffalo faces. Blake said “Today we have $21 billion in oilsands projects already approved, $4 billion in various forms of construction and another $26.5 billion in applications,. Yet capital spending pales in comparison to what these companies will spend over the life of those projects. We’ve come through even darker days of our past even stronger than before and I believe we will do that again this time.”

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Alberta Economic Ft Mac

Nexen Energy Announces 400 Job Cuts Due to Recent Oil Price Drops

Nexen Energy, job cuts

Nexen Energy has announced job cuts due to the recent drop in the global price of oil. According to the company 400 jobs will be slashed in the cost cutting effort. According to Nexen Energy 340 jobs will be cut from the North America operations, and 60 jobs will be cut from the North Sea UK operations. The job cuts represent almost 15% of the Canadian staff that the business has. While there are layoffs and terminations planned Nexen Energy does not plan on instituting a hiring freeze at the moment, and active recruiting is still going on for almost 90 different jobs in the safety and production categories. Some of the positions being recruited require very special skill sets, so transferring some of the laid off employees into these positions is not an option because of this. According to one source “You can’t, for instance, take an accountant and make him a firefighter. Unfortunately the skill set does need to come close.”

The job cuts announced by Nexen Energy are just the latest cuts in the energy industry. Many oil companies have been cutting back as oil prices continue to decline. It is very unlikely that the previous high prices will return anytime soon, and that means the energy industry has to be more cautious about expenses and exploration costs to offset lower profits and lower crude oil prices. Fang Zhi, the CEO of Nexen Energy, wrote “Our long-term perspective continues to be fundamental to how we make decisions for our organization. CNOOC Limited’s rationale for acquiring Nexen remains the same – it was not made with a short-term view, but rather to acquire, and responsibly develop long-term, quality resources.”

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Economic Entertainment Ft Mac Sports

Regional Municipality of Wood Buffalo Still Negotiating Over Downtown Arena Project

Regional Municipality of Wood Buffalo, downtown arena project

A downtown arena project is still under consideration by the Regional Municipality of Wood Buffalo, and the municipality is in negotiations with a business that may be able to arrange for tenancy in the completed arena who has an affiliation with the Edmonton Oilers. Talks with International Coliseums Company about the creation of a Sports and Entertainment Centre started on March 6 of this year and they are still going on. Initially the council was working with Clearwater Consortium and a non-binding letter of intent was signed, but discussions stopped roughly a month ago when it became apparent that both sides were so far apart that an agreement would not be possible. Eventually negotiations were started with the new company instead.

The new Regional Municipality of Wood Buffalo negotiations over the downtown arena project shows that the project will go forward in spite of past delays. According to RMWB supply chain management director Ted Zlotnik “We weren’t able to reach a deal that I believed benefits the taxpayers and the citizens of Fort McMurray,. The key terms were not agreed to between both parties … our best and final offer and their best and final offer did not match and we parted ways. We had our first face-to-face meeting, talked about the key terms we would like to see in that letter of intent. (It) looks promising, both sides seem to understand the intricacies of the deal.” Hopefully the downtown arena project will attract attention and people to Fort MacMurray and provide economic opportunities.