Author Archives: prosperitysaskatchewan

TIM MCMILLAN STEPPING DOWN AS MINISTER AND MLA – BECOMING CAPP PRESIDENT

TIM MCMILLAN STEPPING DOWN AS MINISTER AND MLA

Released on September 18, 2014

Rural and Remote Health Minister Tim McMillan today announced that he is stepping down from cabinet effective immediately and resigning as the MLA for Lloydminster effective September 30.
McMillan has accepted the position of President of the Canadian Association of Petroleum Producers (CAPP), effective October 1.
McMillan said it has been an honour to serve in the provincial government led by Premier Brad Wall.
“This province has seen such a positive change over the past seven years,” McMillan said.  “I feel extremely fortunate to have been part of the government during this remarkable period of growth and progress.”
Premier Wall said McMillan will be missed and wished him all the best in his new career.
“Tim has been a great MLA and Minister and I will miss his unique perspective at the cabinet table,” Wall said.  “As President of CAPP, I know Tim will continue working hard to develop our resource industry in western Canada, including here in Saskatchewan.”
McMillan noted he will be following all of the provisions of the new Saskatchewan Lobbyists Act which requires that a former minister cannot lobby the provincial government for one year after leaving cabinet.
McMillan was first elected in 2007 and was re-elected in 2011.  He has held several different cabinet portfolios prior to his appointment as Minister of Rural and Remote Health in June of this year.  These include Energy and Resources, Crown Investments Corporation, Saskatchewan Liquor and Gaming Authority and Tourism Saskatchewan.
Wall said for the time being, Health Minister Dustin Duncan will also handle the Rural and Remote Heath duties.  He plans to appoint a new minister shortly.
A byelection must be called by the Premier within six months of the date the seat becomes vacant.
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For more information, contact:
Karen Hill Executive Council Regina Phone: 306-787-2127 Email: karen.hill@gov.sk.ca Cell: 306-5299207

36% more jobs posted on SaskJobs than EI recipients in Saskatchewan in July 2014

September 18, 2014
Statistics Canada
The number of EI recipients in Saskatchewan in July 2014 was up 0.7% from July 2013.
There were 10,490 EI recipients in Saskatchewan in July 2014, at the same time, there were 14,305 jobs posted on SaskJobs .ca alone.
There were 36% more jobs on one website than EI recipients in Saskatchewan.
Today there are 13,762 jobs posted at SaskJobs.ca
 EI Sept 2014 1 EI Sept 2014 2

CN facing federal fine for not moving enough grain

8 Sep 2014
The StarPhoenix
THE CANADIAN PRESS AND THE STARPHOENIX
CN facing federal fine for not moving enough grain
The federal government is fining Canadian National Railway for not moving a minimum amount of grain as outlined in the Fair Rail for Grain Farmers Act.
“As CN was not able to meet the minimum volume requirements, the Minister has decided to issue Administrative Monetary Penalties to the company,” said Jana Regimbal, press secretary with the Office of the Minister of Transport, in an email.
“The penalty is up to $100,000 per week and that is up to the Minister’s discretion.”
In a news release, Mark Hallman, Director — Communications and Public Affairs for CN, stated, “CN has not been informed of government concerns or any intention to issue penalties against CN in connection with its grain transportation performance.
“… Such a step would be unfounded given that it’s the current balance of the grain supply chain that has not allowed us to meet the government’s Order-In-Council minimum grain volume requirement.”
The government’s Fair Rail for Grain Farmers Act states railways must move one million tonnes of grain and oilseeds a week until the end of November.
The new regulations are intended to maximize the amount of grain moved by rail before the winter season and allow the government to reassess the situation later in the fall, with the longer term goal of returning carry-over stocks to normal levels by the end of July 2015.
At 76 million tonnes, the 2013-14 western Canadian crop was 50 per cent higher than the 10-year average and the act is meant to stop a repeat of the grain backlog.
Earlier Wednesday CN chief executive Claude Mongeau told a CIBC investor conference that demand for hopper cars has fallen so low in the past few weeks that the railway won’t be able to meet the federal government’s delivery thresholds.
“So we can’t move what they don’t deliver or what they don’t order, and I think that’s a good sign,” he said. “So we should have continued strong grain, but not the surging that we faced last year.”
While the late crop will be strong, Statistics Canada said it will only be slightly above an average year at 55 million to 58 million tonnes.
He said the company doesn’t expect to face a repeat of the problems it faced in moving last year’s bumper western Canadian grain crop
Mongeau said there is ample storage room for farmers to deliver Prairie grain since country elevator stocks are in line or below the five-year average since the beginning of the new crop.
After a “brutal winter,” he said the supply chain of Canada’s largest railway is “back in sync.”
Despite complaints from grain elevator companies, CN moved a record 25 per cent increase in grain Mongeau said, rejecting claims that grain only started moving because the railways were ordered to do so by the Conservative government.

Japan’s predicament a boon for future of energy exporters #uranium

Japan’s predicament a boon for future of energy exporters
The Globe and Mail
Published Wednesday, Sep. 17 2014, 6:28 PM EDT
Last updated Wednesday, Sep. 17 2014, 6:34 PM EDT
This is another of an occasional series from The Globe and Mail’s Brian Milner, who visited Japan to assess the results of dramatic efforts to revitalize the world’s third-largest economy.
One commercial office building in Tokyo’s busy Uchisaiwaicho district is notable for its constant police presence. That’s because it’s the headquarters of Tokyo Electric Power Co. (TEPCO), provider of power to nearly 30 million people and one of Japan’s more reviled companies.
TEPCO gained its spot in the Hall of Shame over its dreadful handling of the Fukushima nuclear disaster triggered by the massive earthquake and tsunami in March, 2011, as well as subsequent revelations of poor maintenance and safety flaws and anger over the slow pace of compensation. Huge anti-nuclear demonstrations followed, and the public outcry has scarcely abated. As recently as its annual meeting in June, management had to fend off activist shareholders demanding a permanent end to nuclear power.
Japan energy sources
Now, a year since the complete shutdown of the rest of Japan’s 48 reactors for safety checks, those demands have taken on new urgency. The Nuclear Regulation Authority, the government’s watchdog, has given the green light for another utility, Kyushu Electric Power Co., to restart two reactors at its Sendai plant in southwestern Japan. Other utilities are seeking the go-ahead to turn another 18 reactors back on.
Prime Minister Shinzo Abe needs to get at least part of the country’s substantial nuclear capacity back on line to cut a soaring energy import tab – including hefty government subsidies – that makes Japanese industry less competitive and presents one more obstacle to his recovery strategy. Power-generating costs shot up more than 40 per cent between 2010 and 2012, and that was despite falling demand. Costs have only gone higher since then.
Efforts to reduce electricity consumption are evident everywhere. During Tokyo’s typically hot summer months, air conditioning is lowered in most buildings and shut off in lobbies and unused offices. Many office workers depart by 6 p.m., as power was cut.
As many as a dozen reactors may remain out of service for good, and some experts say the total could be far higher because of serious safety shortcomings. Other reactors will require expensive upgrades and retrofits that will take years to complete before they can be switched back on. And even the Sendai restart could still be blocked by local officials, who are well aware that a majority of Japanese still oppose any return to a nuclear power option.
This will spell bad news for investors in TEPCO – which is controlled by the government fund that bailed it out – and other utility stocks. But it’s good news for global energy prices. TEPCO and other utilities are aggressively pursuing long-term supplies of liquefied natural gas, and Japan intends to be a player in shale-gas developments in Mexico and elsewhere.
Further down the road, the Japanese hope to exploit what are believed to be vast deposits of methane hydrate deep below the seabed around Japan as a major source of natural gas. But high extraction costs remain an obstacle. And if officials think the public is furious about nuclear power, wait until they start tampering with the marine environment.
So at least for now, exporters of thermal coal and natural gas don’t have to worry either about nuclear restarts or new technologies disrupting their lucrative market.

PotashCorp Mulls Output Boost on Signs of Rising Demand – Recalling Workers #potash

Potash Corp. Mulls Output Boost on Signs of Rising Demand
By Christopher Donville
Bloomberg
Sep 17, 2014 2:10 PM CT
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, is considering a production capacity increase on signs demand in the $20 billion market for the crop nutrient may rise.
The company, based in Saskatoon, Saskatchewan, may boost its annual operational capacity to as much as 11 million metric tons of potash next year, from an estimated 9.2 million tons this year, Chief Financial Officer Wayne Brownlee said today in an investor presentation in New York.
“There’s probably a little bit of growth room in the offshore market in 2015,” he said. “Given some of the supply constraints we’ve seen in some of our competitors, there may be room for us to have increased volume.”
The company is moving to recover from turmoil in the potash industry since Russia’s OAO Uralkali (URKA) quit a sales accord with a Belarusian competitor in July of last year to operate at full capacity, pushing down prices. Last December Potash Corp. cut 18 percent of its workforce and reduced capacity following the price decline.
The producer has now begun the process of recalling some laid-off workers to its potash mines, Brownlee said. He estimates global shipments of potash, a form of potassium that strengthens plant roots, may increase in 2015. This year, sales will be between 58 million and 59 million tons.
Potash Corp. rose 0.9 percent to C$39.01 at the close in Toronto, rebounding from a 0.6 percent decline earlier. The shares have gained 11 percent this year.
To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net
To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Carlos Caminada, Robin Saponar

New technology means a fast-pace output response to falling oil prices

New technology means a fast-pace output response to falling oil prices

Peter Tertzakian

Special to The Globe and Mail

Published Wednesday, Sep. 17 2014, 5:00 AM EDT

Last updated Wednesday, Sep. 17 2014, 5:00 AM EDT

 

When the economy slows down, wallets thin out and people have less money to spend. Drivers make fewer trips to the gas pumps. The demand for oil slackens quickly. The price of a barrel goes down. It’s not rocket science.

What about the other side of the oil market? If producers have less money to spend, does production decline swiftly too?

Historically, the output response to lower prices has been slow, much slower than consumer thrift. But that lagging reaction may be history. Because of science and innovation, the character of world oil production has radically changed. Since 2009, oil output has rocketed up in the United States and Canada, and not much elsewhere (see Figure 1). That’s not news. But what may be news is how vulnerable North America’s growth may be to the dropping oil price.

Non OPEC contributions to world oil supply

The price of a barrel of international light crude oil – measured by Brent – has hit its lowest level in more than two years. Discounted North American oil prices are softening sympathetically; inside the continent, crude prices are at least $5 to $10 cheaper than barrels labelled with Saudi, Nigerian and British flags. Some oil price analysts, feeding off slowing demand fundamentals in Europe and China combined with growing Libyan production, suggest that price could weaken more. And while we agree that lower prices are possible in the short term, we do not expect price markdowns to be long-lasting.

Here is why. For oil producers, a crude oil discount translates into less cash flow, less appeal to capital markets and therefore less spending power. Yet not all oil production is affected equally by less investment. The world’s 92 million barrels a day of oil production can be divided into four distinct types of production: Canadian oil sands; age-old onshore conventional wells; increasingly high-tech offshore production; and new-age hydraulically fractured tight oil.

Contrary to popular belief, oil will steadily flow from Canada’s oil sands, even with lower prices. Massive sunk costs, scale, and negligible decline rates mean that most existing operations in the region will keep producing, even if the oil price for West Texas intermediate were to reach $55 a barrel (U.S.) or below. The resilience of oil sands production was proven out during the financial crisis: Oil supply remained steady when the price of oil dropped to under $50 in the last few months of 2008.

Overwhelmingly, the bulk of the world’s output still comes from “conventional” vertically drilled onshore wells, combined with a growing wedge of supply from the larger scale and more technically challenging offshore projects. Historically, these production types have flowed reliably during low price episodes, and there has been a steady string of global megaprojects that have come online to offset legacy production declines.

But this landscape has changed. Producers from outside North America have been plagued with falling output, technical challenges, a lack of investment, outages due to civil war, corruption, sanctions or all of the above. New large megaprojects such as Kashagan or Brazil’s deep-water subsalt have been long delayed. Organization of Petroleum Exporting Countries production is increasingly prone to outages. Even assuming that new international developments come on line, once declines from the existing production base are factored in, the collective capacity expansion from outside North America is flat at best. Or looking through the lens from the other side, the reverse argument is that U.S. and Canadian hydraulically fractured light oil fields will mostly determine the industry’s free-market response to lower oil prices (OPEC may respond at some point, but that’s another story).

North America’s hydraulically-fractured, tight oil production follows a “just-in-time delivery” business model. When prices are robust, production can grow quickly, because each new well delivers very high initial production rates. However, high decline rates in these wells imply that output should fall off quickly when investment (drilling) is reined in. This downside hypothesis has never been tested, but if low prices were sustained, the economic experiment would be on.

Tight oil or shale oil exploitation is heavily dependent on the rapid recycling of cash flow and access to capital markets. Price weakness slashes unhedged cash flow. Price weakness also sours the appetite of capital markets to invest in oil companies. So production growth should moderate, or even retreat, with a low-price cash famine. This would, in effect, set a floor for the oil price. Depending on the rocks and the operator, the break-even price for North American tight oil varies widely. But we would expect that, notionally, the trigger price to start to witness an investment slowdown is about $85 a barrel for the West Texas intermediate benchmark (still about $10 under today’s price).

The just-in-time nature of North American tight oil, combined with the difficulties in adding new supply elsewhere, suggests that the world’s oil supply will quickly adjust to falling demand or surplus production. The lower prices go, the greater the probability they will rocket up again. But that’s not rocket science either.

Peter Tertzakian is chief energy economist at ARC Financial Corp. in Calgary and the author of two best-selling books, A Thousand Barrels a Second and The End of Energy Obesity.

DeBeers says finding new diamond deposits essential

The largest deposit in the world is in Saskatchewan’s Fort a la Corne district just west of Prince Albert – maybe look there?
Eric
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DeBeers says finding new diamond deposits essential
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
Rough&Polished
17.09.2014
De Beers, the world’s largest diamond producer by value, said it is essential to search for fresh, large sources of kimberlite diamonds.
BusinessDay quoted the group’s head of exploration Charles Skinner as saying that there was a potential threat to the diamond market from synthetic diamonds if the supply of natural diamonds cannot keep up with demand.
He claimed there had been no discovery of a major kimberlite for about 30 years.
“The reason for the significant volume of diamonds produced in the period between 1970 to present is because of the feedstock from these significantly large diamond mines that were discovered in that period,” he said.
“There’s been massive depletion and it begs the question wh ere will diamonds come from in the future.”
Skinner said over 8,000 kimberlites had been found, but only 67 had enough diamonds to justify the economics of establishing a mine.
Of those mines, only seven were major mines like Jwaneng and Orapa in Botswana and Venetia in South Africa, producing 65 percent of global rough diamond production by value, he said.
Meanwhile, Tsodilo Resources president Mike de Wit said the size of kimberlites had dropped to an average of just 2ha from more than 30ha in the 1940s.
“It’s shameful that we’ve not been able to keep that level of discovery going on,” he said.
“The decline in rough diamonds is a reality and the life of mine for new projects is pretty short, 10 or 12 years. We see some new projects coming on stream but they won’t have the impact that a big mine would have.”
De Beers said recently that it was willing to spend money on diamond exploration in South Africa and Angola.

Saskatchewan’s population could top 1.5 million people by 2038

PROJECTIONS SHOW STRONG, CONTINUING GROWTH FOR SASKATCHEWAN

Released on September 17, 2014

Saskatchewan’s population could top 1.5 million people by 2038, according to a new report released today by Statistics Canada.
StatsCan issues its population projections every five years, outlining seven possible scenarios for population growth in Canada and the provinces.  Its projections for Saskatchewan range from the province having a population of anywhere from 1,174,000 people to 1,527,000 people by 2038.  The lower growth projections are based on population trends dating back to Saskatchewan’s zero-growth period of the 1990s and early 2000s, while the higher growth scenarios are based on Saskatchewan’s strong population growth trends in recent years.
Premier Brad Wall said he believes the strong growth scenarios are more likely, based on the experience in Saskatchewan in the past few years.
“Saskatchewan is strong and growing,” Wall said.  “These projections show we are expected to keep growing and that’s a good thing.  There are many challenges that come with growth, but I would rather deal with those than the challenges of decline our province was facing just a few short years ago.”
Wall noted that when Statistics Canada issued its population projections in 2005, four of the six scenarios saw Saskatchewan actually losing population over the next 25 years.  Even the most optimistic scenario at the time saw Saskatchewan growing to just 1,064,000 people by 2031.  Today, there are more than 1,120,000 people living in the province.
“Saskatchewan has now grown by more than 120,000 people in just the past seven years,” Wall said.  “Today, the least optimistic projection shows stronger growth than the most optimistic one just a decade ago.  Things have changed a lot in Saskatchewan.”
Wall said the government will continue working hard to keep Saskatchewan strong and meeting the challenges of growth.
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For more information, contact:
Karen Hill Executive Council Regina Phone: 306-787-2127 Email: karen.hill@gov.sk.ca Cell: 306-529-9207

Lower taxes boost income growth in Saskatchewan

Lower taxes boost income growth in Saskatchewan
By Bruce Johnstone
The Leader-Post
September 15, 2014
Chart below added to story from Brad Wall’s Facebook page Sept 16, 2014
Income Sept 2014
REGINA — Incomes in Saskatchewan are growing more quickly than in most other provinces, thanks largely to lower income taxes, according to the latest report from Sask Trends Monitor, a Regina-based monthly statistical newsletter.
“In 2012, gross income for the average Saskatchewan tax filer increased more quickly than inflation for the tenth year in a row,” Sask Trends Monitor said.
“Higher employment earnings bolstered by more income from investments were the reason. Saskatchewan’s tax rate is lower than in most other provinces so
much of the income growth has translated into higher after-tax incomes.”
Based on data derived from personal income returns, Saskatchewan taxfilers saw their average income increase by 2.7 per cent annually from 2002 to 2012 — second-highest next to Newfoundland and Labrador at 2.9 per cent and ahead of Alberta at 2.1 per cent, the report said.
The average gross income per Saskatchewan taxfiler in 2012 (the most recent year for which data was available) was $45,400, good for second place among the provinces, behind Alberta at $57,100 and ahead of Ontario at $44,800. The Canadian average was $43,900 in 2012.
“The average (Saskatchewan) income overtook the B.C. average in 2009 and the Ontario average in 2012 to reach second place after Alberta.”
Doug Elliott, publisher of Sask Trends Monitor, said he wasn’t surprised by Saskatchewan’s strong income growth during the 2002-2012 period, but was surprised by the reasons for the above-average increases in income.
“The effective tax rates are an odd (thing),’’ Elliott said. “As your income goes up, your taxes go are supposed to go up, but ours haven’t really,” Elliott said.
While the average taxfiler in Saskatchewan paid more taxes in 2012 ($7,500) than 2002 ($5,700), the average income tax paid as a percentage of average gross income actually declined slightly to 16.3 per cent in 2012 from 16.5 per cent in 2002.
“This is mainly because the provincial income tax rate of 5.9 per cent is below the rates in most other provinces,” the report said. The Canadian average provincial income tax rate is 6.3 per cent, ranging from a low of 4.3 per cent in B.C. and a high of 8.2 per cent in Quebec.
“So I think (Premier Brad) Wall can take some credit for the fact that, in spite of the rapid growth in incomes, our actual taxes haven’t increased all that much.” In fact, Saskatchewan has the fifth lowest effective income tax rates among the provinces.
Investment income almost doubled from $1,500 in 2002 to close to $3,000 in 2012, also helping to boost incomes, the report said.
bjohnstone@leaderpost.com
© Copyright (c) The Regina Leader-Post

INFOGRAPHIC: Visualizing the changing landscape in nuclear power #uranium

INFOGRAPHIC: Visualizing the changing landscape in nuclear power

Visual Capitalist | September 16, 2014

There’s been talk about a coming potential uranium bull market for awhile now, but here is a different look at the nuclear picture. The below visualization shows every nuclear reactor in the world by country and breaks down their timeline including construction, commercial power generation, and decommissioning. In addition, planned reactors for the future are also shown for each country.

This data visualization makes it clear where the future of nuclear is. Former nuclear stalwarts such as France, Germany, and the UK all have aging reactors with no new plants planned. Meanwhile, China and Russia do not seem to be afraid of leaning heavily on nuclear energy in the near future. In China alone, 28 or 49 reactors are under construction and there are an additional 35 planned for the future. This is despite nuclear only accounting for 2% of Chinese energy supply in 2012.

Also of note is Japan, which once relied on 29% of its energy coming from nuclear before the Fukushima accident in 2011. In recent years, Japan has cut nuclear out of their grid, although some reactors are still technically operational. To make up the difference, they have imported more natural gas and oil.

Original graphic from: Popular Science

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