Connect with us

Real Estate

Canadian oilsands player calls for government to mandate production cuts

Editor

Published

on

[ad_1]

One of the country’s largest oilsands players, Cenovus Energy, is urging the Alberta government to implement “temporary” production cuts across the oil sector as Canadian crude prices continue to struggle.

A shortage of pipeline capacity is contributing to a huge gap between the price for Canadian crude and the American benchmark, costing some companies and the provincial government dearly.

Cenovus says the magnitude of the price gap is causing significant losses for many producers — and that the provincial government has the power to enforce output cuts and “alleviate the wide differentials.”

Earlier this month, the Calgary-based company said it would limit its oil output by an unspecified amount. 

“We think there is a strong case for the government to temporarily mandate reduced production for the industry,” Cenovus said in an email statement to CBC News.

“Our inability as a country to build critical new pipeline projects means we are now in a situation where we can’t get our growing oil production to market. This has resulted in a market failure.

“This market failure is the result of policy failures at the federal level that impacted pipeline projects, and in the short term it can only be fixed by the Government of Alberta through temporary mandatory industry-wide production cuts.” 

Cenovus said the market can’t fix a problem that is “inherently political.”

The company pointed to legislation used by the Alberta government nearly 40 years ago that curtailed oil production.

Alberta Premier Rachel Notley called on the federal government last month to increase the capacity to transport oil by rail. (CBC)

In 1980, Premier Peter Lougheed enforced output cuts during a dispute with Ottawa over the National Energy Program.

“Legislation exists, and has been used previously by the Lougheed government, to require all producers to temporarily cut production to alleviate the wide differentials,” said the Cenovus statement. 

“Government has a duty to protect the value of its oil resources on behalf of Albertans.”

Peters & Co., an energy-focused investment bank, recently estimated that if the price gap remains at around $40 a barrel for 2019, it would cost the Alberta government about $5 billion in oilsands royalties for the year.

According to Peters & Co.’s report, the situation could result in substantial revenue loss for the government.

Its estimate does not include the impact on conventional oil or condensate royalty revenues, which are also affected by wide differentials. Nor does it factor in the impact of a slow-down in economic activity.

“The Alberta Government has a lot at stake with the wide differentials, and should be motivated to improve the situation in the near-term,” said the report from Nov. 9.

Last month, Premier Rachel Notley called on the federal government to buy more rail cars to transport Alberta oil.

“The oil price differential right now is absurd, and exactly why Premier Rachel Notley is fighting to build new pipelines and pushing Ottawa to step up and help fix the backlog in rail shipments,” said Mike McKinnon, spokesman for the province’s minister of energy, said in an email statement.  

“We continue to engage industry leaders on a number of different approaches and look forward to having more to say soon.”

A driver inspects his vehicle before starting his shift at the Shell Albian Sands oilsands mine near Fort McMurray, Alta., in July 2008. (Jeff McIntosh/Canadian Press)

Martin Pelletier, portfolio manager at TriVest Wealth Counsel in Calgary, said “desperate times call for desperate measures,” but he would rather see industry come up with a solution than the government impose one.

Where the province could play an important role, is in getting oil executives in a room and helping mediate an industry-led agreement, Pelletier said.

“It has to start with industry,” he said.

However, he said he was not surprised to hear Cenovus’ suggestion because “we have to get the conversation going” about solutions to a “made-in-Canada” energy crisis.

Warren Mabee, director of Queen’s Institute for Energy and Environmental Policy, said it would be hard to get companies to agree to cuts, given competing interests and agendas. 

Large integrated companies, like Suncor, would not be affected like companies without refineries or other options for their oil productions, he said.

“I think it’d be very difficult to come up with an agreement,” Mabee said. “It’s a tough thing unless everybody really does come on board with it.”

Mabee also thinks governments — federal or provincial — would be reluctant to get involved in mandating cuts.

“To put a mandate into place means that you’re actually playing with the market, and if you’re playing with the market as a government then you’re opening you’re opening yourself up on the trade front,” Mabee said.

“Given that our trade with the U.S. is a little fraught right now… I just can’t see government wanting to do it​.”

Enbridge workers weld pipe for the Line 3 pipeline project just west of Morden, Man., in August 2018. (John Woods/Canadian Press)

Cenovus is not the only company to announce that it would limit its own oil output.

Earlier this month, Canadian Natural Resources said it has already cut production by up to 15,000 barrels per day and could increase that figure to as much as 55,000 this month and in December.

Canadian prices crashed in September because of a backlog of oil in Alberta.

The Fort McMurray region has increased production throughout this year, but export pipelines are full and several refineries in the U.S. which process heavy oil from Alberta, shut down for maintenance.

Some industry experts now expect low prices for Canadian heavy crude could persist into 2020.

More export pipeline space is expected once Enbridge’s Line 3 replacement project is complete in about 12 months.

With files from Kyle Bakx

[ad_2]

Source link

قالب وردپرس

Real Estate

7 Tips For First-Time Home Buyers In Calgary

Editor

Published

on

By

Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

Continue Reading

Real Estate

‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

Editor

Published

on

By

The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

Continue Reading

Real Estate

10 Tips For First-Time Home Buyers

Editor

Published

on

By

Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

Continue Reading

Chat

Trending