HicksBiz Blog

Category: Oil + Gas

Oil + Gas

Hicks on Biz: PTI Group a regional success story - originally published Edmonton Sun, Sept 27, 2013

Quick hospitality quiz. Where is the world’s fifth biggest hotel? Hint. Not far from Edmonton. What company owns this hotel, and is Canada’s largest hotel chain owner/operator? Hint. It’s headquartered in Edmonton. Why is this company the single biggest buyer of yogurt in Canada? Hint. It feeds an awful lot of people every day. The company is PTI Group Inc. a subsidiary of Houston-based Oil States Inc. It may be a subsidiary – PTI is headquartered out of a former Costco warehouse on the south side of Edmonton - but it’s a mighty subsidiary. PTI’s biggest hotel is Wapasu Lodge, a two hour drive north of Fort McMurray, in the middle of nowhere, but just a short drive down a private road to Kearl Lake, Imperial Oil’s massive new oilsand mining operation. At 5,400 rooms, it truly is the fifth biggest hotel in the world. PTI buys more yogurt than any other Canadian customer because it’s a lunch-bag favourite for the 19,000 plus tradespeo ... Read the rest of entry »

Our Oil Sands Are Clean! Hicks on Biz column originally published Edmonton Sun May 25, 2013

Nothing is more irksome than the Keystone XL pipeline protesters calling our oil sands oil the “dirtiest oil on the planet” or Al Gore claiming there’s no such thing as ethical oil, only “dirty and dirtier oil.” For two years, I have been reading everything I can get my hands on about the oil sands, pollution and technology. I have reached quite the opposite conclusion of Mr. Gore. If the technological advances in the oil sands continue at the current pace, if energy producers continue to invest in oil sands’ research at current levels, if provincial and federal regulators continue to raise the bar to ensure world-leading environmental standards, oil-sands oil will be one of the world’s cleanest energy sources. If a proposed new factory or electricity plant put out a call for the best environmentally friendly fuel source – be it wind, solar, hydro, nuclear, natural gas or oil - our oil-sands oil will soon be competitive at a fraction of the c ... Read the rest of entry »

The greening of the oil sands: Presentation by HIcks on Biz columnist Graham HIcks of the Edmonton Sun to the Sunrise Rotary Club of Edmonton, May 17, 2013

May 17, 2013 The greening of the oil sands Presentation to the Sunrise Rotary Club of Edmonton by Graham Hicks Thanks so much for the invitation to speak to your club this morning. Since retiring from the Edmonton Sun as “Hicks on Six” two years ago, I  embarked on a second career, of business journalism. That new focus rapidly read to a new obsession: Studying and reading everything I can get my hands on about the oil sands, pollution and technology. Given the oil sands are the single greatest driver of our economy, the obsession has been a good fit. I think there’s a crying need out there: To have non-partisan, independent, plain-speaking journalists not only defending the oil sands, but extolling its virtues.  In short, I hope to be an evangelist for the GREENING OF THE OIL SANDS. Our detractors, such as the Keystone XL pipeline protesters who call our oil sands bitumen the “dirtiest oil on the planet” or Al Gore claiming there&rsqu ... Read the rest of entry »

Say goodbye to upgraders: Hicks on Biz column, originally published Edmonton Sun, April 13, 2013

BY GRAHAM HICKS ,EDMONTON SUN Wave goodbye to the bitumen upgrader. Hold a funeral for the giant “pre-refineries” that, until 10 years ago, were still expected to dot Alberta’s Industrial Heartland around Fort Saskatchewan, each employing thousands of construction workers for years on end, each pumping $7 billion or more into the Alberta economy. Upgraders are so dead that oilsands giant Suncor has walked away from a staggering $3 billion – that’s 3,000 million dollars – it had already invested in its on-site Voyageur upgrader. Suncor officially cancelled the project last week. New Suncor President Steve Williams couldn’t justify spending the additional $7 billion needed to complete the upgrader, not with better “opportunity costs” elsewhere in the oilsands, i.e. using the $7 billion to expand bitumen production. Upgraders made sense right up to the building of Shell’s Scotford complex in the late ‘90s. Running molasses-like b ... Read the rest of entry »

Premier Alison Redford is smart: HIcks on Biz, originally published in Edmonton Sun, Feb. 23, 2013

He’s mad! He’s mad! This Hicks on Biz chap has gone clear off his rocker! He is suggesting Alison Redford is smart! Super smart! A superb politician! I am indeed. It’s fashionable these days to verbally pound Alberta’s premier at every turn. In Wednesday’s Edmonton Sun, four columns, one editorial and one news story were all over Redford and Finance Minister Doug Horner for not anticipating a huge drop in energy royalty revenues, a drop creating $4 billion government revenue shortfalls for the current and next fiscal years. You read it here first. By the time Redford heads into the next election, likely April 2016, she could have a balanced budget, no provincial debt, and a start on building the Heritage Fund ($16 billion) to the size of Alaska’s Permanent Fund (now at $41 billion). Why am I not a madman? The current free fall in government revenue is all about the “bitumen bubble,” the massive discount on the pr ... Read the rest of entry »

Alberta's Industrial Heartland is getting there: Hicks on Biz in the Edmonton Sun, Feb. 2, 2013

We take so much for granted. Most urban regions would kill to have an industrial “park” like Alberta’s Industrial Heartland. Canada’s largest petro-chemical and hydrocarbon (oil and natural gas) processing region embraces 582 square kilometres of land covering five municipalities around Fort Saskatchewan, including the still-virgin Edmonton Energy and Technology Park within Edmonton’s northeastern boundaries. Some 40 companies produce products made from oilsand and natural gas feed stocks. It’s all about keeping the jobs and the knowledge and the downstream wealth creation from the raw bitumen, crude oil and natural gas of northern Alberta in Alberta, for Albertans. At least half those companies work at global levels with an estimated $30 billion of investment as of 2012, 7,000 knowledge-based jobs and $77 million a year in municipal taxes alone. Intermunicipal squabbling is usually a quicksand in which regional economic development plans are swallo ... Read the rest of entry »

Oilsands oil versus the world: Hicks on Biz, originally published Edmonton Sun Jan. 26, 2013

So what about this "differential" or $50 gap difference between the price of crude in the Excited States, and the price of our heavy oil?It’s quite simple. Most of our “Canadian Select Crude” is exported to heavy-oil refineries in the American mid-west or all the way to the Louisiana coast.Number one, the pipelines to Louisiana, where huge refineries pay $100 a barrel for Mexican heavy oil that arrives by boat, are so full that heavy oil is backing up through the system. The storage “tank farms” east of Edmonton are just about full.Everybody knew a pipeline capacity crunch was coming, especially with delayed construction of the mighty Keystone XL pipeline from here to Louisiana. But the crunch has happened much earlier and with more ferocity than was expected.Number two, the mid-west refineries are running at full capacity.Number three, our oil now competes for mid-west refinery and pipeline space with new American crude oil from North Dakota.Which means, since early December, the price of our ultra-heavy oil ... Read the rest of entry »

The future of Alberta's economy is crystal clear: Hicks on Biz column originally published in Edmonton Sun, Jan. 5, 2013

The crystal ball doesn’t really need any polishing, because rarely have the opportunities/challenges for Edmonton’s and northern Alberta’s economy been so clear.It’s about extracting and shipping hydrocarbons (oil, natural gas and coal) in a way that keeps the forests green, the water pure, the air pristine, the pipelines and transmission lines as unobtrusive as possible.It’s about compromise, because millions of barrels of oil a day squeezed out of vast sand deposits to our north can’t be done without some disruption to Mother Earth. It’s a question of how much, and how the land is left once the mining is done.It’s about a Goldilocks economy. Not too hot, not too cold, trusting that a combination of market forces and government regulation keeps the energy juggernaut at just the right temperature.Pipelines are on the top of every agenda: Before, building pipelines to get our oil and gas out to the teeming masses of Asia or the thirsty refineries of Louisiana was rather abstract, an issue years away as the oil ... Read the rest of entry »

Learning to love Alberta's pipelines: Hicks on Biz originally published in Edmonton Sun, Dec. 1, 2012

Former premier Ed Stelmach used to call it 'the invisible industry." Even excluding urban water/sewer lines and residential gas lines, we have more pipelines running through the extended Greater Edmonton neighbourhood than just about anywhere else in the world. Maps attempting to illustrate all of central and northern Alberta energy pipelines are just about useless. If the colour blue is used to show all the pipelines, that map would be near solid blue from Red Deer to Fort McMurray. All of Alberta – excluding urban services – has about 400,000 kilometres worth of pipeline. Collector lines are everywhere in conventional oil/gas producing areas; from wells to mini-hubs, mini-hubs to bigger hubs, to major pipes heading to rural primary processing plants, to even bigger pipes transporting crude oil or natural gas into local refineries, or to the super-highway pipelines that send raw or processed hydrocarbons out of province. Thanks to the oilsands northeast of Edmonton, and oil an ... Read the rest of entry »

AIMCo: A fabulous Edmonton Success Story: HIcks on Biz, originally published in Edmonton Sun, Nov. 24, 2012

AIMCo is a fabulous Edmonton business success story. We’re not talking about its rate of return on $70 billion worth of assets - a healthy 7.9% return that assures provincial and municipal employees their pensions are secure. We’re talking about what AIMCo has done, in four short years, to create new wealth in Edmonton. Rewind to 2008, when the Ralph Klein government, spurred by indomitable cabinet minister Shirley McClellan, gathered up its piggy-banks – its pension funds, the Alberta Sustainability Fund, the Alberta Heritage Savings Trust Fund and others – to create one arm’s length investment management firm. AIMCo, the Alberta Investment Management Corporation, is a crown corporation with its own board of governors and only one mandate: That it make money. There is no directive that AIMCo must invest (or not invest) in Alberta. In fact when AIMCo did make a multi-million dollar investment in Calgary-based Precision Drilling, there was momentary uproar ... until ... Read the rest of entry »