Global Business Centre in Canada

Document Sample
Global Business Centre in Canada Powered By Docstoc
					       CALGARY :


Seattle                                                   Ottawa

                                                             New York

   Los Angeles

Calgary is Canada’s energy capital. It is the decision-making hub and head office of every major oil
and gas company in the country and is rapidly becoming an innovative national centre for financing,
designing, constructing and operating electric power plants that use diverse sources such as wind,
run-of-river hydro, natural gas, coal and biomass.

As well, Calgary is home of the industry’s major trade associations and the nation’s energy regulator,
the National Energy Board. No other industry in the country is as highly concentrated as Canada’s
energy sector: the decisions made in downtown Calgary affect multi-billion dollar projects in Alberta,
Canada and around the world. This concentration also makes Calgary a global leader in all aspects
of energy development: project design, exploration, production, finance, processing, transportation,
marketing and management.

Calgary Economic Development has compiled this profile to give interested businesses and individuals
a comprehensive overview of Calgary’s energy sector and the many opportunities it offers. We invite
you to learn more.

For additional information, please contact:

Calgary Economic Development
Calgary TELUS Convention Centre
731 – 1st Street SE
Calgary, Alberta, Canada T2G 2G9
Phone: 403-221-7831 or toll-free: 1-888-222-5855
Fax: 403-221-7828

This profile was completed with the financial assistance of Western Economic Diversification Canada.

Calgary Economic Development (CED) is Calgary’s lead economic development agency, committed to market-
ing the Calgary region’s competitive advantages, pro-business climate and superior lifestyle across Canada and
around the world.

Our organization works closely with business, partner agencies, educational institutions, the community and
all levels of government. We focus on leveraging Calgary’s abundant energy and innovative spirit to sustain
economic growth.

Calgary is Western Canada’s business centre and has the largest number of head offices in Canada per capita.
Its key economic drivers are: Information and Communication Technology, Transportation and Logistics, Energy,
Manufacturing, Financial and Business Services and Film and Creative Industries. CED concentrates its activities
on developing these sectors; an experienced economic development professional is dedicated to each sector.

Using a hands-on approach, we’re furthering the success and growth of existing businesses, helping small
and medium businesses grow their markets globally and promoting the Calgary Region as the ideal location
for business investment. Our operating principles allow us to get the job done – by working with business and
partners proactively, collaboratively and responsively.

Proud of its past and focused on tomorrow, Calgary is Canada’s leading business opportunity centre. To make
Calgary a part of your tomorrow, let us point you in the right direction.
                                SECTOR PROFILE      I    ENERGY

04     Conventional Oil
04     Natural Gas
05     Oil Sands
06     Petrochemicals
07     Electricity
08     Coal
09     Alternative Energy
10     Pipelines
11   Business Climate
11     Energy Employment in Calgary by Subsector
12     North American Employment Comparison
12     Calgary Energy Companies by Subsector
13     Calgary’s 12 Largest Energy Companies (by Revenue)
14     Calgary’s 12 Largest Energy Employers
15   Labour Costs
15     Alberta Labour Costs at a Glance
16     Select Hourly Wages – Energy Sector
16     Labour Costs Index
17   Unionization Rates
17     Provincial and National Unionization Rates
18   Business Support
20   Stellar Economic Performance
22     Net Property Tax for a Single-Family Home, 2004
23     Major Provincial Tax Rates, 2005
34     Provincial and State Corporate Income Tax Rates
24     Top Marginal Personal Income Tax Rates, 2005
25     Fuel Tax Comparison
26     Business Cost Index
26     Crime Rate Index
27     Flight Times
28   Conventional Oil
28   Natural Gas
29   Oil Sands
29   Coal
29   Freehold Mineral Tax
29   Bonuses and Sales of Crown Leases
29   Rentals and Fees
30   A Perspective on Royalties
31     University of Calgary
33     SAIT Polytechnic
34     Mount Royal College
34     Bow Valley College
35     DeVry Institute of Technology
35     Petroleum Industry Training Service for Skilled Technical Workers
36     CDI College
37     Alberta Research Council
37     Alberta Energy Research Institute
38     Canadian Centre for Energy
38     CANMET Western Research Centre and National Centre for Upgrading Technology
39     Canadian Energy Research Institute
39     Institute of Sustainable Energy, Environment and Economy

                                   SECTOR PROFILE III ENERGY

40     Canadian Association of Geophysical Contractors
40     Canadian Association of Oilwell Drilling Contractors
41     Canadian Association of Petroleum Producers
41     Canadian Energy Pipelines Association
42     Petroleum Services Association of Canada
42     Petroleum Technology Alliance Canada
43     Small Explorers and Producers Association of Canada
43     The Coal Association of Canada
44     National Energy Board
44     Alberta Energy & Utilities Board
45     Calgary Technologies Inc.
45     Calgary Regional Partnership
46     Consulates and Honorary Consulates
48   Health
49   Education
49   Lifestyle
                                   SECTOR PROFILE 1 ENERGY

Founded at the confluence of two rivers – the Bow and the Elbow – where the foothills meet the prairies,
Calgary was established as an outpost for the North West Mounted Police (later the Royal Canadian
Mounted Police). As the remote but resource-rich settlement grew into a thriving town, it was entrenched
as an important intersection for trade, transportation and agriculture.

Alberta’s energy industry began in the 1880s with coal mining in Lethbridge, south of Calgary, and natural
gas production in Medicine Hat, east of Calgary. In 1910, the discovery of natural gas and oil in Turner Valley
triggered a drilling boom in the southern reaches of the province and prompted the overnight start-up of
hundreds of oil and gas companies in Calgary. The city’s location proved ideal once again as the crossroads
of Alberta’s exploration, production and finance.

                                                       More than 30 years later, Imperial Oil’s discovery of
                                                       oil in 1947 further transformed Calgary, Alberta and
                                                       Canada into energy leaders. After drilling 133 dry
                                                       holes, the company struck at Leduc, one of the richest
                                                       deposits ever found in Western Canada. In the six
                                                       decades since, Calgary has been Canada’s undisputed
                                                       “Energy Capital” and today is a major player in the
                                                       world’s energy economy.

                                                       Companies such as EnCana, Enbridge, Imperial Oil,
                                                       Nexen, Petro-Canada, Shell Canada, TransCanada,
                                                       Husky, Canadian Natural Resources and Talisman have
                                                       corporate head offices in Calgary. Hundreds of junior
                                                       oil and gas companies and hundreds more oil and gas
service and supply companies - including Precision Drilling, Ensign Energy Services, Schlumberger Canada
and Halliburton Canada - are also headquartered in the city. In all, Calgary is home to nearly 2,000 energy
industry companies.

The influence and economic impact of Calgary-based energy companies is evident throughout Canada,
from oil and gas exploration off the Atlantic Coast and wind farms in Quebec, to nuclear power generation
in Ontario and natural gas pipelines in the Northwest Territories. More than 32,000 Calgarians are directly
employed in the city’s energy sector: 62 per cent in oil and gas exploration and production, and 23 per cent
in oil and gas services and supply. In Alberta, the province’s department of energy reports almost one in six
workers is directly or indirectly employed in the energy sector – that number is expected to grow considerably
as Alberta’s oil sands are developed.
In Calgary, energy is the cornerstone of the local economy, and, traditionally, the city’s prosperity is closely
linked to the prices of oil and natural gas. In May 2005, Calgary-based companies drove more than $75 billion
of the $108 billion of major capital projects in the province. In 2003/04, the energy industry contributed $42.5
billion (or 25 per cent) to the province’s gross domestic product and $7.7 billion to provincial revenues through
royalty payments. Energy also accounts for just over half the value of Alberta’s $66 billion in total exports.

Alberta’s energy industry is expected to remain strong for many years – the province sits on one of the world’s
largest sources of energy.

■ Its proven coal reserves (33.6 gigatonnes) account for 60 per cent of Canada’s total reserves; at current
   rates of consumption, the province has enough coal for 600 to 800 years.

■ The Western Canadian Sedimentary Basin has reserves of five billion barrels of conventional oil and 60
   trillion cubic feet of natural gas.

■ The province has the world’s largest recoverable oil sands deposits, currently estimated at 175 billion barrels
   of proven reserves. By volume, these proven reserves are surpassed only by Saudi Arabia. Time Magazine
   has called the oil sands “Canada’s greatest buried energy treasure,” and predicted they “could satisfy
   the world’s demand for petroleum for the next century.” In 2005, the Canadian Association of Petroleum
   Producers reported Alberta’s oil sands production exceeded one million barrels a day.

                                    SECTOR PROFILE 3 ENERGY

Canada and Energy
The critical mass of Calgary’s, and Alberta’s, energy resources and companies makes Canada a leading global
energy producer. The U.S. Government’s Energy Information Administration ranks Canada fifth in the world after
the United States, Russia, China and Saudi Arabia for total primary energy production (which includes coal, oil,
natural gas, hydroelectric, nuclear, etc.) Furthermore, Canada is the world’s third-largest producer of natural gas
and is second only to Russia in exports. Canada is also the largest supplier of energy to the United States.

In their joint report, Alberta’s Ultimate Potential for Conventional Natural Gas (March 2005), the Energy Utilities
Board (EUB) of Alberta and the National Energy Board of Canada reported Canada provides about one-quarter
of total North American gas production. The seventh-largest producer of crude oil and natural gas liquids in
the world, Canada produces about 3.1 million barrels per day.

Alberta Energy reports that in 2003 the province supplied about 70 per cent of Canada’s crude oil and gas
exports to the United States, delivering about 1.04 million barrels per day (b/d) of crude oil and petroleum
products daily and more than 2.6 trillion cubic feet of natural gas during the year. These exports accounted for
11 per cent of all U.S. crude oil imports (or five per cent of U.S. oil demand) and 66 per cent of all U.S. natural
gas imports (about 12 per cent of U.S. demand).

The demand for Canadian fuels is growing in other markets as well, particularly in China and other Asian
countries with rapidly growing economies. In turn, this is creating new opportunities and accelerating the
development of Alberta’s oil sands and ongoing activities of its entire energy sector.

                                                 Software         Energy
                                                Developers      • Bioenergy
                                                                • Wind
                                                                • Fuel
                               Investor-owned                                    Oil & Gas
                              Electric & Power                                  Exploration
                                 Generation                                     & Production
                               Engineering              A Global
                                                      Energy Centre           Drilling & Oilfield
                               • Construction
                               • Environment

                                      Pipelines &      Business
                                      Processing                           Manufacturers
                                                     • Banking • Tax
                                                     • Legal • Insurance
                                                     • Human Resources
Conventional Oil
The conventional oil sector has been a perennial driver of the Alberta economy for more than 50 years and
is a critical part of Alberta’s past, present and future. Developing the province’s conventional oil resources has
been a fixture of Alberta life since 1947, when the province’s first major oil field was discovered near Leduc.

In 2003, Alberta Energy reported conventional crude oil production made up about 38.6 per cent of Alberta’s
total crude oil and equivalent production, equal to roughly one-quarter of Canada’s total crude oil and
equivalent production. This amounts to about 5.5 per cent of total North American crude oil and equivalent
production. In 2003, Alberta was the fourth-largest conventional crude oil-producing area in North America,
after Texas, Alaska and California.

Development of Alberta’s conventional oil industry has created an extensive infrastructure that supports the
continued drive to locate, drill for and transport oil to market. This infrastructure continues to grow: Alberta
Energy reports that between 2000 and 2003, industry invested more than $54 billion in the province’s
conventional oil and gas industry.

Industry also continues to focus on finding innovative and more efficient ways to extract a higher percentage
of crude oil from conventional reservoirs, recognizing that up to 70 per cent of total crude oil reserves in
Western Canada cannot be extracted with existing technologies.

Most of the crude oil produced in Alberta is exported to other markets. Of the production that remains in
the province, most is converted into transportation fuels at refineries in Alberta. A much smaller proportion is
refined into other oil products to heat homes and buildings, generate electricity and manufacture lubricants,
waxes, plastics, synthetic rubber and asphalt.

Natural Gas
Natural gas is one of the cleanest, cheapest and most efficient sources of energy, making it a necessary
component of an environmentally friendly economy. Alberta is home to a large natural gas resource base and
accounts for just over 80 per cent of the natural gas produced in Canada.

Alberta Energy estimates the province’s reserves of recoverable, conventional natural gas are at 84 trillion
cubic feet (Tcf). Alberta’s coal seams could contain as much as an additional 500 Tcf. While it’s not yet known
how much of this natural gas from coal (coalbed methane) is economically recoverable, Alberta’s natural gas
supply will meet the needs of Albertans, Canadians and North Americans for the foreseeable future.

                                    SECTOR PROFILE 5 ENERGY

With new technology and building on U.S. experience, Calgary companies are exploring opportunities to
optimize the extraction of natural gas from coal while maintaining appropriate environmental controls.
Alberta’s first commercial natural gas from coal project was announced in 2002; by December 2003, 1,000
wells for natural gas from coal had been drilled in Alberta, more than 400 of which netted some production.

In addition to heating homes and businesses, over 60 per cent of the natural gas consumed in Alberta is
used by the industrial sector. Natural gas is an important raw material for the province’s oil sands and electric
power generation industries, which have expanded in recent years as the result of significant investment
based on availability of the resource in Alberta.

Oil Sands
Oil sands are deposits of bitumen, a molasses-like oil that will not flow unless heated or diluted with lighter
hydrocarbons. Alberta’s oil sands are the world’s largest deposits of oil and are contained in three major areas
beneath 140,800 square kilometres of northeastern Alberta – an area larger than the state of Florida and
twice the size of the province of New Brunswick.

These deposits contain one-third of the world’s known oil reserves – enough to supply the world’s total
needs for up to 15 years. The oil sands have an estimated 1.6 trillion barrels of oil in place, of which 175
billion barrels are recoverable with current technology.

In 2003 Alberta’s oil sands were the source of about 52.7 per cent of the province’s total crude oil and
equivalent production and about 34.8 per cent of all crude oil and equivalent produced in Canada. However,
only about two per cent of the initial established resource has been produced to date.

Annual oil sands production is growing steadily as the industry matures. The Canadian Association of Petro-
leum Producers (CAPP) reports output of marketable oil sands production is currently one million barrels a
day (bbl/d). By year’s end 2005, Alberta’s oil sands production is expected to account for one-half of Canada’s
total crude output and 10 per cent of North American production. It is also predicted that the oil sands will
create a total of 102,000 new jobs across Canada by 2012. And in May 2004, the National Energy Board
forecast oil sands production would be 2.2 million bbl/d by 2015.

Calgary’s energy sector has been instrumental in turning “theory into reality” through capital investment,
research and technological innovation. Some $59 billion will be invested in the oil sands in the coming
decade to develop this non-conventional resource. The Canadian Association of Petroleum Producers
estimated capital spending for oil sands in situ and mining in 2004 was $5.4 billion, and Alberta Energy
estimates that in the last five years alone, industry has invested $24.7 billion in oil sands development. As
well, government and industry have worked together to find innovative and economical ways to extract and
process the oil sands. Energy research is more important today than ever before.
In particular, the Alberta Energy Research Institute helps spur new technology and innovation programs
that will reduce the impact of greenhouse gases and other emissions, and reduce the consumption of water
and gas.

Another watershed technology developed for oil sands recovery is steam assisted gravity drainage (SAGD),
which allows bitumen to be recovered from oil sands deposits that are impractical for surface mining and
extraction methods. Only five per cent of oil sands can be recovered through surface mining, while other in situ
extraction techniques recover around another 15 per cent. The development of SAGD potentially doubles the
economic viability of oil sands reserves.

SAGD was developed between 1986 and 1998, and is the result of collaboration between the Government
of Alberta, through Alberta Oil Sands Technology and Research Authority, and industry partners. It was
pilot-tested at an underground test facility near Fort McMurray, Alberta. In 1999-2000, a number of the
original development partners were licensed to use SAGD technology and announced commercial ventures
worth a total of over $3.4 billion.

Among the major companies actively developing the oil sands are: Canadian Natural Resources Limited,
EnCana Corporation, Husky Energy Inc., Imperial Oil Resources Limited, Petro-Canada, Shell Canada Limited,
Suncor Energy Limited, and Syncrude Canada Ltd.

Petrochemical production is one of the largest manufacturing industries in Alberta, accounting for more than
$8 billion worth of products annually of which $4 billion is exported. The industry directly employs more than
6,500 Albertans with a combined payroll of nearly $400 million. Alberta is Canada’s leading petrochemicals
manufacturer and home to four petrochemical plants with a combined annual production capacity of 8.6
billion pounds of ethylene. Two of those plants – at Joffre and Fort Saskatchewan – are the world’s largest.

Polyethylene cord and rope, flexible packaging material, polystyrene cups and other consumer products, such
as nylon and plastics are all examples of petrochemical-based products developed from Alberta’s natural gas
liquids and crude oil – products just about everyone uses in everyday life.

The current viability of the province’s petrochemical industry is based on access to a long-term, secure and
economic supply of natural gas liquid (NGL) feedstock – especially ethane – and the ability to develop suitable
competitively priced products for international markets.

                                   SECTOR PROFILE 7 ENERGY

The petrochemical industry has invested approximately $7 billion in Alberta since the 1970s to substantially
increase production capacity for ethylene, polyethylene, ethylene glycol and linear alpha olefins. For example,
ethylene production has nearly doubled in recent years as a result of expansions at both Joffre and at Fort
Saskatchewan. As well, BP Chemicals Canada’s construction of a linear alpha olefins facility at Joffre is
Canada’s first domestic source of this petrochemical.

Major petrochemical companies based in Calgary include: Shell Canada Chemical Company, Dow Chemical
Canada, Nova Chemical and BP Chemicals Canada.

Alberta’s electricity system is owned and operated by a mix of investor-owned and municipally owned
companies (most of them based in Calgary), not by the Alberta government. The province’s department of
energy, Alberta Energy, develops, supports and monitors the framework for bringing new generation on-line,
competitive electricity markets, and efficient delivery systems.

Alberta’s competitive electricity market has resulted in over 3,200 megawatts (MW) of new electricity generating
capacity since 1998. In addition, plans or proposals for 5,000 MW of new generation worth more than
$5 billion have been proposed. To put this growth in perspective, one MW is equal to one thousand kilowatts,
roughly equivalent to the power consumed by 1,000 typical Alberta households in an average year.

Alberta Energy reports that thermal sources account for the majority of Alberta’s installed generating capacity:
coal-fired plants make up almost 50 per cent of the province’s total generating capacity, and natural gas
accounts for over 40 per cent, including efficient cogeneration at industrial operations that produce energy
as a by-product of normal activities.

The remainder is hydro, wind and biomass (energy produced from organic sources such as wood waste,
garbage or animal matter). Proposals to add to the province’s installed generating capacity also include a
number of green power projects such as the addition of up to 800 MW from wind generation.

The ability to deliver electricity throughout Alberta must also be increased in order to keep pace with the
province’s continued strong economic growth. In late 2003, the Alberta government approved a new
transmission development policy to encourage timely, cost-efficient investment in transmission infrastructure,
the backbone of the electricity system. To ensure all transmission charges to generators and to industrial,
commercial or residential customers are fair, the Alberta Energy and Utilities Board (EUB) continues to
regulate Alberta’s transmission system, as it always has.
Alberta’s retail electricity market gives larger industrial and commercial consumers a choice of service provid-
ers. More than 20 companies are currently competing to sell power to the province’s larger commercial and
industrial users, which account for 64 per cent of all electricity use in Alberta. With the continued development
of the retail market, more retail options will be available to smaller consumers such as residential, farm and
small commercial customers.

Among the major companies that make up Alberta’s electrical energy sector are: ATCO Energy, TransAlta,
Direct Energy Marketing, Nexen Marketing, Enmax Corporation, Alta Link, Enbridge and Canadian Hydro

Coal is the world’s most abundant fossil fuel. Canada is ranked 10th in the world in total proven coal reserves,
with Alberta’s 33.6 gigatonnes representing 60 per cent of Canada’s total reserves; at current rates of
consumption, the province has enough coal for 600 to 800 years.

Alberta’s coal contains more than twice the energy of all the province’s other non-renewable energy resources,
including conventional oil and pentanes, natural gas, natural gas liquids, and bitumen and synthetic crude.
Currently, 50 per cent of the electrical power used in Alberta is generated by coal.

Alberta coal is low in sulphur and burns cleaner than most coal found in other countries; modern coal-burning
technologies also enable it to be used to generate electricity cleanly and efficiently. One of Alberta’s goals is to
provide research that will lead to even cleaner, more efficient coal-burning technologies.

Over 85 per cent of the 30 million tonnes of coal mined annually in Alberta is used in power plants. In 2003
for instance, Alberta used 25 million tonnes of sub-bituminous coal for electricity generation.

The coal industry provides benefits to communities through employment opportunities, community infrastruc-
ture development, and economic prosperity. Coal is also a source of revenue for Albertans. In the three fiscal
years from 2000 to 2002, for example, $43 million in royalties were paid to the Government of Alberta for
development of the province’s coal resources.

Nine major coalmines operate in Alberta, typically producing between 30 and 35 million tonnes of marketable
coal every year. The two major coal companies based in Calgary are Elk Valley Coal Corp. (which is the world’s
second largest producer of metallurgical coal) and Grand Cache Coal Corporation. The Coal Association of
Canada is also based in Calgary.

                                   SECTOR PROFILE 9 ENERGY

Alternative Energy
Alberta is responding to the world’s growing demand for affordable, renewable and environmentally friendly
energy. Companies across the province are finding innovative ways to use abundant and renewable resources
– or biomass – such as cereal crops and animal waste.

In 2004, The City of Calgary tested biodiesel (80 per cent diesel fuel mixed with 20 per cent biofuel from
oil seed crops and waste cooling oil) in a fire department vehicle. The City expects to see more of its fleet
use biodiesel, which emits 15 per cent less greenhouse gas than regular diesel but provides roughly the
same power.

In Peace River Country, Glacier Power, a wholly owned subsidiary of Canadian Hydro Developers Inc. of Cal-
gary, wants to use a time-tested source of energy – flowing water – to produce “low-impact renewable green
energy” from a six-metre deep weir (a low-head, run-of-the-river generating facility) on the Peace River.

Canadian Hydro Developers also opened its Grande Prairie EcoPower® Centre in September 2005. The
centre will use wood waste to generate electricity and steam for use in two sawmills; the Government of
Alberta will purchase 60 per cent, or 110,000 megawatts per year, of the green power generated from this
facility for 20 years. The EcoPower® Centre will generate enough electricity for about 21,000 households.

One of the most promising sources of renewable energy in Alberta is wind. The Canadian Wind Energy
Association (CanWEA) predicts that by 2010 Canada’s total wind power capacity will have increased to
10,000 megawatts or about five per cent of the country’s total electricity production. (Equivalent to 30 million
megawatt hours of electricity per year, or enough to meet the electricity needs of nearly four million homes).

In September 2003, Enmax Corporation and Vision Quest Windelectric opened a $100-million wind farm
in southern Alberta, Canada’s largest single-site wind farm. The 114-turbine, 75-megawatt generating facility
produces about 235,000 MWh/year of electricity – enough energy to power more than 32,500 homes annually.

In 2004, the $48-million Magrath Wind Power Project – an equal partnership between Suncor Energy Inc.,
EHN Wind Power Canada Inc. and Enbridge Inc. – began generating power. The project’s 20 turbines have
the capacity to generate 30 megawatts of green electricity – enough to power approximately 13,000 homes.
One-third of the power generated by the turbines is used by Enbridge for its pipeline operations. The
remaining electricity is distributed to consumers through the Alberta electrical grid.
The Calgary area also includes a number of leaders in fuel cell technology: Versa Power Systems is a leading
developer of solid oxide fuel cell technology. Advanced Measurement Inc. manufactures customized test
systems to measure voltage, current, humidity, temperature and other fuel-cell characteristics. Global
Thermoelectric is the world’s largest supplier of thermoelectric generators. The University of Calgary has
respected capabilities in fuel cell research and is part of the Western Canada Fuel Cell Initiative, which
includes 45 fuel cell research groups. Alberta researchers in the initiative were recently awarded over
$2 million from the Alberta Energy Research Institute and Western Economic Development, to advance
development of high-temperature fuel cells that can operate on fossil fuels and biofuels (such as wood and
agricultural crop waste).

Calgary is the decision-making headquarters for a number of large North American pipeline companies,
including TransCanada PipeLines Limited, Alliance Pipeline Ltd., BP Canada Energy Company, Terasen
Pipelines, Enbridge Pipelines Inc. and ATCO Pipelines. Other regional pipeline companies are also based in
Calgary as is the Canadian Energy Pipeline Association (CEPA).

CEPA reports that its members operate approximately 100,000 kilometres of pipelines across North
America, delivering about 1.7 billion cubic feet of natural gas and 2.35 million barrels of liquid hydrocarbons
every day. These companies also directly and indirectly employ some 24,000 Canadians and will invest an
estimated $1 billion a year in capital projects for the next 20 years.

In Alberta, the province’s 35,722-kilometre network of operating pipelines is an important part of North
America’s pipeline system and links to major production areas, markets and export terminals throughout
Canada and the United States. Alberta’s natural gas pipelines system makes up more than 25 per cent of
the total pipelines in Canada, reports Alberta Energy.

Major future opportunities in Canadian pipelines include the development of new export routes for Alberta’s
growing oil sands production, and the potential for new natural gas pipeline routes from Alaska and the
Northwest Territories.

                                     SECTOR PROFILE 11 ENERGY

Business Climate
Calgary’s energy sector is robust and integrated, with hundreds of companies involved in all aspects of the
industry – exploration, development, production and distribution – in Canada and across the world.

Throughout the 1970s, ‘80s and ‘90s, Calgary’s energy sector achieved a critical mass that eventually led
to virtually the entire sector shifting its head office operations to the city. Calgary’s title as Canada’s oil capital
was reaffirmed in 2004 when Imperial Oil, the largest energy company in Canada, announced it too would
locate its head office in Calgary.

Economist Todd Hirsch of the Canada West Foundation says companies are influenced by the location of
their industry’s major players. Added to this factor are other bottom-line considerations such as taxes,
human capital, operating costs and the city’s infrastructure, amenities and cultural attractions.

Calgary’s workforce has exceptional knowledge and experience in energy. More than 4,300 petroleum
engineers work in Calgary and another 63,800 workers are employed in natural and applied sciences-
relation careers. Calgary’s labour force is well-educated: 73 per cent of Calgarians have attended a
post-secondary institution.

Energy Employment in Calgary by Subsector
      Subsector                                                              Employment         Percentage
      Oil sands and heavy oil development                                             172            0.53%
      Coal production                                                                  85            0.26%
      Oil and gas exploration and production                                      20,198            62.34%
      Oil and gas services and supply                                              7,522            23.22%
      Electric power generation, transmission and distribution                     2,412             7.44%
      Petroleum and coal products manufacturing                                       248            0.77%
      Pipeline operation                                                           1,763             5.44%
      Total                                                                       32,400              100%

      Source: Statistics Canada Labour Force Survey 2004, GGA Management Consultants,
      Calgary Economic Development
Calgary attracts skilled workers from across Canada and around the world. In fact, Calgary benefits from the
highest net interprovincial migration in Canada, attracting some 6,900 immigrants to the city annually (1995
to 2004). Calgary also has the youngest population of any city in Canada, with an average age of 35. Youthful
vigour and a positive work ethic matched with high-level professional and technical skills mean higher
productivity and value-added to energy businesses.

North American Energy Employment Comparison
     Total Pop                      City                                          Total O&G Employees
     4.2 million                    Houston, Texas                                              66,700
     1 million                      Calgary, Alberta                                            31,500
     1 million                      Edmonton, Alberta                                           15,500
     1.3 million                    New Orleans, Louisiana                                      14,300
     400,000                        Lafayette, Louisiana                                        11,300
     200,000                        Odessa-Midland, Texas                                       10,900
     3.5 million                    Dallas, Texas                                               10,300
     1.1 million                    Oklahoma City, Oklahoma                                      8,800
     800,000                        Tulsa, Oklahoma                                              7,600
     300,000                        Anchorage, Alaska                                            7,200

     Source: Harvard Institute for Strategy and Competitiveness – Cluster Employment 2001 Top US Metro
     Areas, Statistics Canada

Calgary Energy Companies by Subsector
     Subsector                                                                   Number of Companies
     Oil and gas exploration and production                                                      1,059
     Oil and gas services and supply                                                               682
     Pipeline operation                                                                              55
     Electric power generation, transmission and distribution                                        34
     Petroleum and coal products manufacturing                                                       13
     Oil sands and heavy oil development                                                                 9
     Coal production                                                                                     2
     Total                                                                                       1,854

     Source: Stats Canadian Business Patterns, 2004 and Calgary Economic Development.

                                    SECTOR PROFILE 13 ENERGY

Though Calgary is home to the vast majority of the country’s largest and many of the world’s major energy
companies, more than 93 per cent of the sector’s businesses employ fewer than 100 workers. Small and
mid-size companies are significant contributors to Calgary’s energy sector, providing expertise and services
that support larger companies and utilize innovative technology.

Calgary’s energy sector is constantly evolving through the creation, growth, merger and acquisition of
companies. For example, between 2000 and 2004, the number of companies in electric power generation,
transmission and distribution grew by 126 per cent; the number of oil and gas exploration and production
companies increased by 11 per cent; and the number of companies in oil and gas supply and service grew
by nine per cent.

This growth is achieved by companies’ ongoing evaluation of their resource portfolios and the development
of new growth strategies. New opportunities emerge every day as properties are bought, traded or sold, or
when new joint ventures and partnerships are struck to develop currently owned properties.

Calgary’s 12 Largest Energy Companies (by revenue)
      Rank             Company                                                               Revenue
      1                Imperial Oil                                                     $22.4 billion
      2                EnCana Corporation                                               $15.4 billion
      3                Petro-Canada                                                     $14.7 billion
      4                Shell Canada Limited                                             $11.2 billion
      5                Husky Energy Inc.                                                 $8.4 billion
      6                Suncor Energy                                                     $8.1 billion
      7                Enbridge Inc.                                                     $6.5 billion
      8                Canadian Natural Resources                                        $6.5 billion
      9                Talisman Energy                                                   $5.3 billion
      10               TransCanada Corp.                                                 $5.1 billion
      11               Nexen Inc.                                                        $3.9 billion
      12               TransAlta Corporation                                             $2.8 billion

      Source: FP 500: Database, June 2005
Calgary’s 12 Largest Energy Employers2
    Rank             Company                                             Number of Employees2
    1.               Precision Drilling Corporation                                   12,000
    2.               ATCO Ltd.                                                         7,531
    3.               Ensign Resource Service Group Inc.                                7,300
    4.               Flint Energy Services Ltd.                                        4,600
    5.               Petro-Canada                                                      4,500
    6.               Suncor Energy Inc.                                                4,372
    7.               EnCana Corporation                                                4,090
    8.               Shell Canada Limited                                              4,003
    9.               Enbridge Inc.                                                     4,000
    10.              Petro Kazakhstan Inc.                                             3,306
    11.              Nexen Inc.                                                        3,000
    12.              Husky Energy Inc.                                                 2,899

    Source: FP500 Database, 2005 Edition; Calgary Economic Development

                                      SECTOR PROFILE 15 ENERGY

Labour Costs
Calgary’s labour costs are competitive with other western Canadian cities and are lower than competing U.S.
jurisdictions, offering employers a significant competitive advantage.

Calgary’s labour costs, for many energy sector occupations, are lower than the provincial average and
contribute to its low business cost index.

Alberta Labour Costs At a Glance, 2005

      Employer paid benefits
        Canadian Pension Plan                4.95%1
        Worker’s Compensation                $1.83 per $100 of insurable earnings (1.83%) is the average
                                             for 2005. The rate for the insurance industry is $0.39
        Employment insurance                 2.73%2
        Paid vacation                        4.0% (6% after four years)3
        Holidays                             Alberta employees are entitled to nine paid general holidays
      Health care premiums
        Single                               $44/month4
        Family                               $88/month5
        Minimum wage                         $7.006

      1. Determined by federal law. Maximum contribution is $1,861.20 (2005). Calculation is based on maximum
        pensionable earnings of $41,100 minus a basic deduction of $3,500 times 4.95%.
      2. Maximum contribution of $1,064.70 is achieved at an annual salary of $39,000.
      3. If employees are paid a monthly salary, they receive their regular rate of pay for the time of their vacation.
        All other employees receive vacation pay as a percentage of wages for the year for which vacation was
        given. All construction employees receive 6% (no qualifying period necessary).
      4. Assumes that adjusted taxable income exceeds $15,970; otherwise a lower rate applies.
      5. Assumes that adjusted taxable income exceeds $34,250; otherwise a lower rate applies.
      6. As of September 1, 2005.
      Source: Alberta Economic Development, 2005
Select Hourly Wages – Energy Sector
    Occupation                                                                Calgary   Alberta
    Oil and gas well drillers, servicers, testers and related workers         $19.87    $20.99
    Petroleum engineer                                                        $42.60    $37.68
    Oil and gas drilling, servicing and related labourers                     $14.21    $16.63
    Supervisors, petroleum, gas and chemical processing and utilities         $33.89    $42.04

    Source: 2005 Alberta Wage and Salary Survey

Labour Costs Index
    Index of Labour Costs, Average of 12 Industry Operations, 2003
    Calgary                                                                   100
    Vancouver                                                                 104
    Toronto                                                                   105
    Colorado Springs                                                          114
    Minneapolis                                                               117
    Chicago                                                                   121
    Seattle                                                                   122

    Source: KPMG CEO’s Guide to International Business Costs, February 2006

                                    SECTOR PROFILE 17 ENERGY

Unionization Rates
Alberta’s unionization rate is among the lowest in Canada. Private sector unionization is 12.4 per cent;
overall unionization is 23.7 per cent, with the bulk of unionized workers employed in public administration,
education and health.

Over the past 10 years, Alberta’s person-days lost due to labour disputes have ranked among the lowest
in Canada.

Provincial, National Unionization Rates
    Region                                                                                 Total %
    Canada                                                                                 31.8
    Quebec                                                                                 40.0
    Newfoundland                                                                           38.9
    Manitoba                                                                               37.5
    Saskatchewan                                                                           35.3
    British Columbia                                                                       33.6
    Prince Edward Island                                                                   32.3
    Nova Scotia                                                                            28.7
    New Brunswick                                                                          28.5
    Ontario                                                                                27.8
    Alberta                                                                                23.7

    Source: Statistics Canada, Labour Force Historical Review, 2004
Business Support
Calgary is Western Canada’s financial centre. Canada’s major banks and financial firms have a significant
presence in the city and each offers a wide range of specialized services in the sector, including:

■ Business insurance consulting

■ Business process standardization and optimization

■ Capital program management

■ Comprehensive tax planning

■ Control assurance

■ Corporate finance

■ Dispute consulting

■ Electrical generation, marketing and deregulation

■ Energy law

■ Energy trading and risk management

■ Financial management

■ Forensic investigation

■ International business

■ Joint ventures

■ Mergers and acquisitions planning and integration

■ Operations and technology consulting

■ Regulatory framework

■ Shareholder value analysis and portfolio optimization

More than 135,000 Calgarians are employed in business, finance and administration occupations.
Employment in this support sector grew 51 per cent between 1994 and 2004.

                                   SECTOR PROFILE 19 ENERGY

Calgary’s energy sector, in collaboration with its financial and business services sector and the Alberta and
federal governments, has developed financial instruments to provide capital to support growth of the energy
sector. Energy trusts and flow-through shares are two examples. Energy trusts allow investors to invest in a
portfolio of crude oil and natural gas properties and receive a portion of the net cash flow as the oil and gas is
produced. Energy trusts increase the financial resources available to Calgary energy companies. Flow-through
shares are common shares of an oil and gas company where the company enters into an agreement with a
limited partnership to flow through to the limited partnership certain tax deductions that are generated from
the company’s capital program. By making tax deductions available to the investor, energy companies gain
increased access to capital for their exploration and development activities.

Among the leading financial companies specializing in energy in Western Canada are: ARC Financial,
FirstEnergy Capital Corp., Scotia Waterous & Co., Peters & Co. Limited, Petroleum Place Energy Advisors Inc.,
Envoy Capital Management, Manvest Inc., SpringBank TechVentures Funds, SRG Capital Ltd., Tamarack
Capital Advisors Inc., and TriWest Capital Management Corporation.

Financing in Calgary’s energy sector is highly robust with approximately $15.9 billion worth of transactions
having closed in 2004. Mergers and acquisitions and asset sales each accounted for approximately 50 per
cent of the activity. This constituted approximately 35 per cent of the total value of energy sector deals com-
pleted in North America in 2004. (Source: Waterous & Co. as quoted in The Globe and Mail, January 2005)

Calgary Economic Development can provide further insight into Calgary’s financial and business services

Also available to Calgary-based organizations are government funded programs including the Scientific
Research and Experimental Development (SR&ED) Tax Credit Program, which can offset research and
development costs. The National Research Council’s Emerging Technologies Program can support
companies involved with alternative energy development technologies, including fuel cells and related
hydrogen-based technologies.

The Industry Research Program and Innovations Assistance Program offered through the Alberta Energy
Research Institute provide grants to support collaborative energy-related research involving industry
partners. A recent example is the support given to the DOVAP partnership of oil and gas producers who
are evaluating a new heavy oil recovery technology – the Vapex Process.

Western Economic Diversification Canada – First Jobs in Science and Technology Program can assist small
and medium-sized energy companies in hiring science and technology graduates in supporting product
commercialization, or in developing a scientific technique to improve production capabilities.
The provincial government’s Innovative Energy Technologies Program represents a $200-million commitment
over five years by the Department of Energy to provide royalty adjustments to a number of specific pilot and
demonstration projects that use innovative technologies to materially increase recoveries from existing reserves
and encourage responsible development of oil, natural gas and in situ oil sands reserves. The program is also
designed to assist industry to find commercial technical solutions to the gas-over-bitumen issue that will allow
efficient and orderly production of both resources.

In addition, Calgary’s telecommunications and business services infrastructure provides exceptional capabil-
ity for global communications, giving energy companies the ability to manage their international operations
effectively. The city is one of the most wired cities in North America: all Calgarians have access to broadband
technology and 78 per cent of all Calgary households have at least one regular Internet user. In addition,
the Alberta SuperNet project links more than 420 communities throughout Alberta with 12,000 kilometres
of fibre and wireless technology, making broadband Internet services available to individual users and
con-necting schools, hospitals, libraries and government offices.

Stellar Economic Performance
Calgary is Canada’s fastest-growing economic region, with an estimated 4.6 per cent growth in real GDP in
2005. It also has had the highest growth in employment of any major Canadian city, at 40.7 per cent from
1995 to 2004.

Also, from 2000 to 2004, Calgary had the highest-average annual population growth of any major Canadian
city – at 2.3 per cent. Calgary was a migrant workforce magnet between 1995 and 2004, with interprovincial
migration about 6,900 workers annually. Due to this strong growth, the Calgary Region’s population has
topped one million.

In April 2005, Scotia Capital forecast:

  Alberta’s long-term growth prospects are buoyant as long as oil prices remain strong. Only two per cent
  of the province’s established oil sands reserves have been extracted; remaining deposits are equivalent to
  almost 179 billion barrels of oil, second only to Saudi Arabia. The Province forecasts oil export volumes to
  grow at an average rate of 5.1 per cent annually through 2008. While the increasing reliance on oil sands
  development, and its more substantial capital and upgrading costs, reinforces the province’s sensitivity
  to world oil prices, the current upbeat oil price outlook overshadows cost-related pressures. For the vast
  majority of oil sands projects, the breakeven (including return on capital) is estimated at US $28 to US $30
  a barrel.

                                   SECTOR PROFILE 21 ENERGY


Calgary benefits from a low tax regime: the province of Alberta has no municipal or provincial sales tax and
has one of the lowest provincial corporate tax rates in Canada (10 per cent). Furthermore, the Canadian
corporate tax rate is declining to 21 per cent (as outlined in the 2004 federal budget), lower than most U.S.
jurisdictions, and there is no provincial general capital tax. Calgary businesses also benefit from the fact that
Alberta has no inventory tax, no machinery and equipment tax and no payroll tax.

Alberta is the only Canadian province to have a flat income tax rate (10 per cent). All other Canadian provinces
work on a sliding income scale. In addition, the provincial government is debt-free; Calgary’s low tax regime
is expected to continue. Alberta’s beneficial tax regime creates an environment in which businesses can
operate more profitably, and individuals can retain more of their personal incomes.

In 2006, the provincial government dropped the general corporate income tax rate to 10 per cent from
11.5 per cent, to ensure Alberta’s global competitiveness. Alberta’s small business rate is three per cent.

Since 2001, the provincial government has cut the small business rate in half and doubled the small business
income threshold to $400,000. The general corporate tax rate decreased by 25 per cent. The government has
pledged to further reduce the general rate to eight per cent.
Net Property Tax for a Single-Family Home, 2005
  (selected Canadian cities)








           Medicine Hat
                                    Red Deer
                                                                                                        Saint John
                                                                                                                     St. John's
                                                                                                                                  Grande Prairie



       1. Includes municipal, regional and school taxes, net of any applicable homeowner grants.
       2. Taxes are based on the value of a typical single family home, defined as a 25- to 30-year-old detached
       bungalow with 3 bedrooms, a main floor area of 1,200 square feet, finished full basement, double car
       garage, and a 6,000-square-foot lot. Information for Vancouver, Surrey and Burnaby is based on an
       average-value home that may differ slightly from the above definition.

       Source: Alberta Government, 2006 budget.

                                          SECTOR PROFILE 23 ENERGY

Major Provincial Tax Rates, 2006
                                    AB      BC       SK       MB       ON       QC       NB        NS         PE       NL
    Personal income tax
    Statutory rate range
     – lowest rate   (%)          10.00    6.05    11.00   10.90     6.05    16.00a    9.68      8.79        9.80   10.57
     – highest rate (%)           10.00   14.70    15.00   17.40    11.16    24.00a   17.84     17.50       16.70   18.02
    Surtax           (%)              –       –        –       – 20.0/36.0       –        –      10.0        10.0     9.0
    Credit amounts
    Basic amount     ($)         14,899   8,858    8,589   7,734    8,377    6,520    8,061     7,231       7,412   7,410
    Spousal amount ($)           14,899   7,585    8,589   6,482    7,113    6,520    6,845     6,140       6,294   6,055
    Corporate income tax
    General rate     (%)           10.0    12.0     17.0    14.5     14.0       9.9    13.0      16.0        16.0    14.0
    M&P rate         (%)           10.0    12.0   10-17b    14.5     12.0       9.9    13.0      16.0        16.0     5.0
    Small business
     – rate          (%)            3.0     4.5      5.0     4.5      5.5       8.5     2.0       5.0         6.5     5.0
     – threshold     ($000)        400     400      300      400      400      400      450       350        300      300
    Capital tax
    General          (max. %)         –       –     0.60    0.50     0.30    0.525     0.25     0.275           –       –
    institutions     (max %)          –    3.00     3.25    3.00     0.90     1.30c    3.00      4.00        5.00    4.00
    Retail sales tax (%)              –     7.0      7.0     7.0      8.0      7.5d     8.0       8.0       10.0d     8.0
    Gasoline tax     (¢/litre)      9.0   14.5e     15.0   11.50     14.7    15.2ef    14.5f    15.5f        20.7    16.5f
    Tobacco tax      ($/carton) 32.00     35.80   35.00f   35.00f   24.70    20.60    23.50f   31.04f    34.90g     34.00f
    Payroll tax      (max. %)         –       –        –    2.15     1.95     4.26g       –         –           –    2.00

    Rates for other provinces as of March 21, 2006.
    a Quebec residents receive an abatement of 16.5% of basic federal tax in lieu of federal cash transfers
      to Quebec for several social programs.
    b The general rate is reduced by up to 7 points based on the share of a corporation’s national manufacturing
      and processing income allocated to Saskatchewan.
    c The Quebec financial institutions capital tax includes a base rate of 1.20% and a compensatory tax of 0.25%.
    d These provinces apply their retail sales tax on the retail price of the good inclusive of the GST..
    e An additional 6¢/litre is imposed in the greater Vancouver area. 2.5¢/litre in Victoria and 1.5¢/litre in Montreal.
    f These provinces apply their retail sales taxes on the retail price of the good inclusive of the particular
      excise tax.
    g Quebec levies an additional 2% compensatory tax on the wages paid by financial institutions that is not
      included in this rate.
    Source: Alberta Government, 2005 Budget
Provincial Income Tax Rates, 2006

                        AB             BC           SK      MB             ON              QC      NB            NS       PE        NL    Canada

    General          10.0          12.0        17.0        14.5          14.0          9.9        13.0       16.0       16.0       14.0    22.12

    Mfg. &
     processing      10.0          12.0       10-17        14.5          12.0          9.9        13.0       16.0       16.0        5.0    22.12

    Small business      3.0            4.5      5.0         4.5           5.5          8.5         2.0           5.0     6.5        6.5    13.12

    Source: Alberta Economic Development

State Effective Corporate Income Tax Rates

                              Oregon California N Dakota             Montana       Idaho    Colorado      Utah     N Mexico Louisiana     Federal

    General                      6.6         8.84         7.0           6.75        7.6         4.63       5.0          7.6        8.0     35.00

    Mfg. & processing            6.6         8.84         7.0           6.75        7.6         4.63       5.0          7.6        8.0     33.95

    Small business               6.6         8.84        6.83           6.75        7.6         4.63       5.0          4.8       6.85     32.00

    Source: Alberta Economic Development
    Rates effective January 2005.

Top Marginal Personal Income Tax Rates, 2006

                                       AB           BC          SK        MB               ON      QC            NB       NS        PE        NL

    Federal                      29.00        29.00       29.00         29.00        29.00      29.00      29.00       29.00      29.00    29.00

    Provincial                   10.00        14.70       15.00         17.40        17.41      24.00      17.84       19.25      18.37    19.64

    Federal abatement1                  –            –           –             –            –    (4.79)           –           –      –         –

    Total                        39.00        43.70       44.00         46.40        46.41      48.21      46.84       48.25      47.37    48.64

    Rates for other provinces known as of March 21, 2005.
    1 Quebec residents receive an abatement of 16.5% of basic federal tax in lieu of federal cash transfers
      to Quebec for several social programs. This reduces the top federal rate of 29% by 16.5% or 4.79% of
      taxable income.
    Source: Alberta Government, 2006 Budget

                                             SECTOR PROFILE 25 ENERGY


Alberta has the lowest fuel tax rate of the major Canadian provinces, 3.4 cents per litre less than the national

Fuel Tax Comparison
      Fuel Tax Rates (cents per litre)

                                Alberta           Manitoba   British Columbia   Ontario    Saskatchewan

      Gasoline (regular)                 9           11.5               14.5      14.7              15

      Diesel                             9           11.5                 15      14.3              15

      Source: Gas Tax Honesty Campaign – Canadian Taxpayers Federation, M.J. Ervin and Associates, May 2005
Business Cost Index
      Calgary, AB                                                                                   94.7
      Toronto, ON                                                                                   96.5
      Oklahoma                                                                                      97.8
      Salt Lake City                                                                                99.6
      Colorado                                                                                  100.8
      Dallas                                                                                    101.2
      Houston                                                                                   102.9

      Source: KPMG CEO’s Guide to International Business Costs, February 2006

Calgary has a very low, cost-effective business cost index, especially when compared to other North American
energy centres.

Crime Rate Index
      Crime Rate Index, Selected North American Cities
      City                                                                           Crime Rate Index
      Chicago                                                                                       374
      Los Angeles                                                                                   283
      Vancouver                                                                                     239
      Edmonton                                                                                      200
      Denver                                                                                        172
      Seattle                                                                                       149
      Calgary                                                                                       117

      Source: The Relocation Crime Lab – National Association of Realtors,, 2001

One of the safest cities in North America, Calgary has a low crime rate which translates into fewer property
losses and lower insurance costs for businesses and individuals.

                                   SECTOR PROFILE 27 ENERGY

Calgary provides ready access to Asia, Europe, and, of course, the United States; many American cities are
less than a four-hour flight from Calgary.

Flight Times
                                                                        Direct flight times to/from Calgary
      Edmonton                                                                                       45 m
      Ottawa                                                                                      3 h 50 m
      Toronto                                                                                     4 h 10 m
      Vancouver                                                                                   1 h 15 m
      United States
      Chicago                                                                                     3 h 30 m
      Dallas                                                                                      3 h 40 m
      Denver                                                                                      2 h 23 m
      Houston                                                                                     3 h 57 m
      Los Angeles                                                                                      3h
      New York City                                                                               5 h 53 m
      Salt Lake City                                                                              1 h 46 m
      San Francisco                                                                               2 h 44 m
      Seattle                                                                                     1 h 10 m
      London                                                                                      8 h 45 m
      Frankfurt                                                                                   9 h 20 m
      Tokyo                                                                                      10 h 25 m

      Source: Statistics Canada, U.S. Census Bureau, The Calgary Advantage, Proximity One, GGA
      Management Consultants

Both the Province of Alberta and the Government of Canada use royalties, taxes, bonuses and rents to
ensure Albertans continue to receive a fair share of revenue from the province’s natural resources.

In 2003, energy industry investment in Alberta was more than $20 billion, supported more 300,000 jobs and
provided provincial royalties of more than $7.6 billion – the second highest total ever delivered to Albertans.

Conventional oil and natural gas pools are classified into “vintages” for royalty calculation purposes. Vintage
refers to the date of discovery of the oil or gas pool from which production occurs. Royalty rates for production
from newly discovered pools are set lower to reflect the higher average finding and development costs
associated with the smaller size of pools being found today compared to the 1980s and 1970s.

“Old” oil up to March 31, 1974
“New” oil after March 31, 1974
“Third Tier” after September 1, 1992

Natural gas development in Alberta has two vintages: “old” gas up to Dec. 31, 1973; and “new” gas after
Dec. 31, 1973.

Conventional Oil
The oil royalty rate is determined by three factors: when the oil pool was discovered (vintage); the productivity
of the well; and the inflation-adjusted price of oil.

Natural Gas
The royalty rate on natural gas is also determined by three factors: when the gas pool was discovered
(vintage); the inflation adjusted price of gas less adjustments for the cost of processing the royalty share
of the gas; and if the well is a low-producing well.

                                    SECTOR PROFILE 29 ENERGY

The government takes a share of the natural gas and by-products produced, however, as raw gas is not a
marketable commodity and has to be processed, the government pays for the cost of processing its share
into a marketable commodity. The Crown’s share of production is about 30 per cent for newer gas and
about 35 per cent for older gas.

Oil Sands
Alberta’s oil sands royalty was specifically designed to encourage development of the oil sands resource. The
1997 generic oil sands regime takes into account some of the barriers – higher technological risk and higher
capital costs – faced by oil sands developers.

Prior to a project’s “payout” (the point by which the developer has recovered all allowed costs plus a return
allowance), the applicable royalty is one per cent of the project’s gross revenue. Following a project’s payout,
the applicable royalty rate is the greater of 25 per cent of project net revenue, or one per cent of gross revenue.

The royalty rate for Crown-owned sub-bituminous (plains) coal, used to generate electricity is 55¢/tonne.
The royalty rate for Crown-owned bituminous (mountain/foothills) coal, which is based on a revenue minus
costs royalty regime, is: (before mine payout) one per cent of mine mouth revenue; and (after mine payout)
one per cent of mine mouth revenue plus 13 per cent of profit.

Freehold Mineral Tax
Nineteen per cent of Alberta’s mineral rights is owned by the federal government on behalf of First Nations
or in National Parks, and by individuals and companies. The tax is assessed annually based on calendar year
production and is levied on each owner of a mineral right as shown on the Certificate of Title.

Bonuses and Sales of Crown Leases
The Department of Energy administers Crown mineral rights on behalf of Albertans in the form of agreements
acquired through a competitive sealed-bid auction held about every two weeks.

Rentals and Fees
The Crown attaches several expectations to the licences and leases issued, including an annual rent of $3.50
for each hectare covered by the agreement.
A Perspective on Royalties
Canadian provincial sliding-scale royalties on gas production may appear higher than the standard royalties
payable in the U.S., but Canadian formulas allow for reducing royalties payable with declining production
rates (wells producing less than 600,000 cubic feet per day), and increasing royalties payable with increasing
commodity prices.

In addition, the rebate of Alberta Crown royalties payable through the Alberta Royalty Tax Credit (ARTC)
program and the Gas Cost Allowance (GCA) offers an advantage. The ARTC is more significant to companies
that pay less than $2 million a year in royalties. The GCA is the cost of processing the royalty-owner’s gas that
is effectively subtracted from the net royalty payable.

Standard mineral-owners’ royalties in the U.S. for new gas production (generally a fourth to a sixth), plus state
severance taxes and ad valorem taxes, can range from 25 per cent to 35 per cent. In comparison, the Alberta
Crown royalty on new gas is 30 per cent, which is reduced by ARTC and the GCA.

An example: In 1999, average Alberta and Texas gas wells produced approximately 300,000 cubic feet per
day. The Alberta Crown new royalty would have been 25 per cent on the well, versus 27 per cent in Texas,
assuming a one-sixth mineral royalty plus 7.5 per cent severance and 2.5 per cent ad valorem. The ART rebate
plus the GCA would have reduced the net Alberta Crown royalty payable to less than that payable in Texas.

Royalty formulas in Canada for marginally producing wells are even more advantageous. In the U.S. in 1999,
the average stripper gas well produced 16,000 cubic feet per day. The Alberta Crown royalty on this average
well would be 5 per cent less (after ARTC and GCA discounts) than in Texas.

                                    SECTOR PROFILE 31 ENERGY

Calgary is a city of young, skilled workers, technicians and professionals.

Calgary has the youngest population in Canada, with an average age of 35, and has the highest net interpro-
vincial migration in Canada (more than 11,000 annually from 1998 to 2004). Overall, Calgarians are confident,
hard-working, entrepreneurial and well-educated (73 per cent of Calgarians have post-secondary education).
More than 10,000 people a year graduate from Calgary’s major post-secondary institutions.

University of Calgary
The University of Calgary is a comprehensive research university that provides a dynamic setting for scholars
in 16 faculties, 53 departments and more than 30 research institutes and centres. The U of C has more than
4,700 faculty and staff and nearly 29,000 full-time equivalent students, including 900 international students
from 87 countries. In 2004, the U of C granted 6,415 degrees.

The U of C’s Department of Chemical and Petroleum Engineering offers degree programs in petroleum
engineering and petroleum land management. The Faculty of Engineering’s Pipeline Engineering Centre
also offers masters and PhD programs in pipeline engineering and a certificate in pipeline engineering.

The University has also created the Institute for Sustainable Energy Environment and Economy (ISEEE), which
undertakes world-class interdisciplinary research, innovation and education focused on creating secure, com-
petitive energy supplies for a clean environment and a strong economy. ISEEE builds on considerable strengths
in research and academic programs in energy and the environment at the University of Calgary. ISEEE was
established in 2003 to provide leadership and coordination for developing and implementing energy- and
environment-related initiatives at the University.

The institute recently began researching advanced recovery and upgrading techniques aimed at finding
cost-effective ways to expand the percentage of recoverable conventional oil, natural gas and coal reserves and
to accelerate development of unconventional hydrocarbon resources. ISEEE has also undertaken research in
collaboration with the National Research Council of Canada as well as other research organizations on sustain-
able development technologies. For additional information on ISEEE, see page 35.

The University is committed to energy-related research. One example is CREWES – the Consortium for
Research in Elastic Wave Exploration Seismology. Another is the Fold-Fault research initiative, which
undertakes integrated geophysical and geological research into 3-D geometry and the evolution of geological
structures associated with the accumulation of oil and gas.
The U of C’s Calgary Centre for Innovative Technology (CCIT) is a 6,690-square-metre (72,000-sq.-ft.) research
and teaching facility. CCIT provides leading-edge lab space and state-of-the-art equipment for U of C engineer-
ing professors and their students. These researchers will work to find solutions for problems facing society and
industry in five key areas, including resource development and utilization.

Private sector partners – BP Energy Company, EnCana Corporation, Schlumberger Canada Ltd. and Shell
Canada Limited – provided more than half of the funding for the $35-million project.

CCIT houses several shared labs equipped to conduct research in several areas, including and natural
resources technologies, for example: pilot plants, drilling, hydrocarbon production, scanning, visualization/
computation and the environment.

The Haskayne School of Business – the University’s business faculty – places a strong emphasis on energy
management. The school works closely with Calgary’s energy industry to provide specialized executive and
professional development programs for international organizations.

Haskayne’s customized energy management programs are recognized by international, public and private sec-
tor energy organizations for their outstanding quality and value. Each program is tailored to the specific needs
of the host organization, and can include lectures, workshops, meetings and industry tours. Academics from
other University of Calgary faculties, such as Engineering, Science, Social Sciences, Law and Environmental
Design, can be integrated into programs to meet client needs. Industry experts, such as Canadian energy
regulatory officials and lawyers, provide real benefits to foreign clients through lectures and discussions.

The school’s energy management programs can be delivered at its executive education facilities in Calgary
or around the world. In just two examples, the Haskayne School of Business partnered with the Faculty of
Engineering to deliver energy research management programs for the Chinese National Petroleum Company
(CNPC) and with local environmental consulting companies to deliver a health, safety and environmental
management program for the Research Institute of Petroleum Exploration and Development (RIPED) in China.

Public and private sector energy organizations around the world have benefited from the programs.

                                         University of Calgary
                                         2500 University Drive N.W.
                                         Calgary, Alberta T2N 1N4
                                         Phone: 403-220-5110

                                   SECTOR PROFILE 33 ENERGY

SAIT Polytechnic
                                        The Southern Alberta Institute of Technology Polytechnic offers more
                                        than 70 applied degree, diploma and certificate programs to some
                                        65,000 learners every year. SAIT Polytechnic is internationally
                                        renowned for its quality technical education and hands-on training.

                                        SAIT Polytechnic’s bachelor of applied technology petroleum engi-
                                        neering is primarily designed to upgrade the education of technology
                                        graduates in petroleum engineering, chemical engineering, mechani-
                                        cal engineering, industrial instrumentation, civil engineering, electrical
                                        engineering, or similar engineering.

The institute also offers two-year diploma programs in chemical engineering, electrical engineering, environ-
mental, industrial instrumentation, petroleum engineering, power engineering and process operations. It also
has comprehensive career upgrading programs in petroleum geological applications, petroleum geophysical
applications, oil and gas production accounting, program control applications, petroleum engineering
applications, power engineering (second to fifth class) and petroleum land administration.

SAIT is known for its ability to work closely with companies throughout Calgary, Alberta and beyond to develop
unique training programs to meet specific corporate needs.

SAIT is also home to the Energy Training and Technology Institute which focuses on fulfilling the educational,
training and applied research needs of the energy industry. Four of SAIT’s leading-edge Centres of Technol-
ogy (the BP Control Engineering Technology Centre, the Wellsite Production Education Centre, the EnCana
Environmental Technology Centre and the TransAlta epiCentre) contribute expertise to the new institute. The
institute has adopted a multidisciplinary approach that integrates SAIT’s cross-departmental expertise to fill
the high demand for skilled employees in the energy sector.

SAIT Polytechnic
1301 – 16th Avenue N.W.
Calgary, Alberta T2M 0L4
Phone: 403-284-SAIT (7248)
Toll free: 1-877-284-SAIT (7248)
Mount Royal College
Mount Royal College was founded in 1910 to help students achieve their full potential. Today, about 13,000
students from Canada and around the globe work toward this goal every year. Mount Royal College offers
more than 60 degree, diploma, university transfer and certificate programs in areas such as arts, business,
communications, health and community studies and science and technology. International exchange
agreements with leading educational institutions in the United States, Mexico and Asia provide global learning
opportunities. Mount Royal College graduated 1,933 students in 2002/2003 and has two transportation
and logistics-related programs: a bachelor’s program in business supply chain management and a two-year
aviation diploma program.

Mount Royal College
4825 Richard Road S.W.
Calgary, Alberta T3E 6K6
Phone: 403-440-6611

Bow Valley College
Bow Valley College is a workforce preparation and development institution from which 4,104 students gradu-
ated in 2002/2003. Bow Valley College provides business and management training to many employees who
support Calgary’s transportation and logistics sector. The college serves more than 10,000 learners (about
4,400 full time) across Canada each year.

Bow Valley College
332 – 6th Avenue S.E.
Calgary, Alberta T2G 4S6
Phone: 403-410-1400

                                    SECTOR PROFILE 35 ENERGY

DeVry Institute of Technology
DeVry Institute of Technology offers bachelor’s degree and diploma programs that combine the best of today’s
business skills with current technical applications. DeVry Calgary is the largest DeVry institution in Canada and
graduated 500 students in 2002/2003.

DeVry Institute of Technology Calgary
2700 – 3rd Avenue S.E.
Calgary, Alberta T2A 7W4
Phone: 403-235-3450
Toll free: 800-363-5558

Petroleum Industry Training Service for Skilled Technical Workers (PITS)
The Petroleum Industry Training Service for Skilled Technical Workers is a joint undertaking of six Calgary-
based energy sector associations:

■ Canadian Association of Petroleum Producers (CAPP)

■ Small Explorers and Producers Association of Canada (SEPAC)

■ Petroleum Services Association of Canada (PSAC)

■ Canadian Energy Pipeline Association (CEPA)

■ Canadian Association of Oilwell Drilling Contractors (CAODC)

■ Canadian Association of Geophysical Contractors (CAGC).

PITS is the training arm of the Canadian petroleum industry, offering a wide variety of courses, self-study
programs, publications, consulting, customized training, and other services related to petroleum technology,
safety, environment and career development. PITS has the finest facilities in the world for hands-on training in
the oil and gas industry.

Petroleum Industry Training Service
1538 – 25th Avenue N.E.
Calgary, Alberta T2E 8Y3
Phone: 403-250-9606
Fax: 403-250-1289
CDI College
                                 CDI has more than 30 years of experience in providing high-cali-
                                 bre, career-focused technology and business training. The col-
                                 lege recently merged with several other national leaders in post-
                                 secondary career training to expand its courses and programs.
                                 CDI has an oil and gas administrative assistant program and a
                                 business and information technology training program which help
                                 train employees for Calgary’s energy sector.

                                 CDI College
                                 Suite 200, 206 – 7th Avenue S.W.
                                 Calgary, Alberta T2P 0W7
                                 Phone: 403-232-6410
                                 Fax: 403-266-0830

                                   SECTOR PROFILE 37 ENERGY

A network of research institutes in Calgary and throughout the province collaborates with the energy sector
to share public and private expertise and developing new and innovative approaches and technology. Many
new cost-effective technologies have been applied to energy exploration and development in the province
and around the world.

Alberta Research Council (ARC)
ARC develops and commercializes technology to give its customers a competitive advantage. A Canadian
leader in innovation, ARC provides solutions globally to the energy, life sciences, agriculture, environment,
forestry and manufacturing sectors.

ARC undertakes applied research and development for energy companies on a contract basis. ARC can also
co-venture to develop new technologies, earning a return on investment from the commercialization of
products and processes. ARC provides access to world-class resources at facilities in Western Canada, and
a team drawn from 600 experienced scientists, researchers and business experts.

Alberta Research Council
3608 – 33rd Street N.W.
Calgary, Alberta T2L 2A6
Phone: 403-210-5222
Fax: 403-210-5380

Alberta Energy Research Institute (AERI)
AERI works with industry and other government ministries to promote innovation and technology that will
enable Alberta’s energy sector to evolve. AERI provides strategic direction to position Alberta for the future in
energy development, and invests in research and technology to enhance the sustainable development of the
province’s abundant energy resources.

AERI promotes energy research, technology evaluation and technology transfer in areas including oil and gas,
heavy oil and oil sands, coal, electricity, renewable and alternative energy. AERI promotes consortia and builds
networks by integrating knowledge, skills and investment potential of industry players, federal and provincial
governments, research providers and universities.

AERI priority research areas include steam assisted gravity drainage (SAGD), the AOSTRA-Taciuk process
(ATP), OSLO (a consortium known as Other Six Lease Operators) cold water extraction (OCWE) and collabora-
tive projects with industry and government to manage oil sands tailings.
Alberta Energy Research Institute
Suite 2540, Monenco Place
801 – 6th Avenue S.W.
Calgary, Alberta T2P 3W2
Phone: 403-297-8650
Fax: 403-297-3638

Canadian Centre for Energy
In its first year, the Canadian Centre for Energy positioned itself as a resource for a competitive Canadian
energy sector by launching a Web portal, developing partnerships, expanding its executive board, launching
two satellite venues and supporting several energy-related events.

The governments of Alberta and British Columbia provided the Centre’s funding in 2004, making it a truly
private/public partnership committed to delivering accurate, factual and current information about Canadian
energy. The centre’s establishment recognizes Calgary’s role as the energy capital of Canada.

Canadian Centre for Energy
201, 322 – 11th Avenue S.W.
Calgary, Alberta T2R 0C5
Phone: 403-263-7722
Toll free: 1-877-606-4636
Fax: 403-237-6286

CANMET Western Research Centre –
CWRC and National Centre for Upgrading Technology – NCUT
The CANMET Energy Technology Centre (CETC) – in Devon, Alberta is the federal government’s primary
research group for the development of hydrocarbon supply technologies and related environmental
technologies, with an emphasis on oil sands and heavy oil.

CANMET Energy Technology Centre
Natural Resources Canada
1 Oil Patch Drive, Suite A202
Devon, Alberta T9G 1A8
Phone: 780-987-8614
Fax: 780-987-8690

                                    SECTOR PROFILE 39 ENERGY

Canadian Energy Research Institute (CERI)
Founded in 1975 and based at the University of Calgary, CERI is an independent, non-profit research institute
focused on analyzing economic and environmental policy issues in energy production, transportation and
consumption. Its members include the federal and provincial governments, the University of Calgary and about
100 energy-related companies.

CERI bridges scholarship and policy to bring scientific research, economic analysis and practical experience to
government, business, media and the pubic, both in Canada and abroad. One of the ways CERI carries out its
work is through independent research forums featuring recognized industry experts. As well, CERI’s research
on domestic and continental energy and environmental issues is complemented by an expanding international
research program.

Canadian Energy Research Institute
150, 3512 – 33rd Street N.W.
Calgary, Alberta T2L 2A6
Phone: 403-282-1231
Fax: 403-284-4181

Institute for Sustainable Energy Environment and Economy (ISEEE)
One of more than 50 institutes, centres and centres of excellence at the University of Calgary, ISEEE under-
takes world-class interdisciplinary research, innovation and education focused on creating secure, competitive
energy supplies for a clean environment and a strong economy. ISEEE builds on considerable strengths in
research and academic programs in energy and the environment at the University of Calgary. ISEEE was
established in 2003 to provide leadership and coordination for developing and implementing energy- and
environment-related initiatives at the University.

The institute recently began researching advanced recovery and upgrading techniques aimed at finding cost
effective ways to expand the percentage of recoverable conventional oil, natural gas and coal reserves and to
accelerate development of unconventional hydrocarbon resources. ISEEE has also undertaken research in
collaboration with the National Research Council of Canada, as well as other research organizations on
sustainable development technologies.

University of Calgary
2500 University Drive N.W.
Calgary, Alberta T2N 1N4
Phone: 403-220-5110
The following organizations can assist your company with economic information, information on government
programs and regulations, introductions to relevant business and government leaders, and opportunities to
participate in energy-related conferences and seminars, among other services:

Canadian Association of Geophysical Contractors (CAGC)
The Canadian Association of Geophysical Contractors develops, administers and promotes programs and
training to ensure worker health and safety. The CAGC also acts as the communication link to promote
understanding between government, industry and other groups.

CAGC promotes the protection of the natural environment in all aspects of geophysical operations. It
endeavours to self-regulate member business activities, where feasible, to minimize the public expense of
governing the industry, and advocates the highest ethical standards in the conduct of all business in the
geophysical industry.

CAGC also promotes the Canadian geophysical industry as a world leader in development and application
of advanced exploration technologies.

Canadian Association of Geophysical Contractors
1045, 1015 – 4th Street S.W.
Calgary, Alberta T2R 1J4
Phone: 403-265-0045
Fax: 403-265-0025

Canadian Association of Oilwell Drilling Contractors (CAODC)
CAODC is a trade association representing upstream Canadian petroleum drilling contractors, both land-based
and offshore as well as drilling and service rig contractors and associate companies. Its member companies
work together to ensure the sector is efficient, well trained and well equipped.

This industry association can assist energy companies by introducing them to its members and inform them
about labour availability, skills and costs.

                                   SECTOR PROFILE 41 ENERGY

Canadian Association of Oilwell Drilling Contractors
800, 540 – 5th Avenue S.W.
Calgary, Alberta T2P 0M2
Phone: 403-264-4311
Fax: 403-263-3796

Canadian Association of Petroleum Producers (CAPP)
CAPP, the voice of the upstream oil and natural gas industry in Canada, represents 150 member companies
who explore for, develop and produce more than 98 per cent of Canada’s natural gas, crude oil, oil sands and
elemental sulphur.

Canadian Association of Petroleum Producers
Suite 2100, 350 – 7th Avenue S.W.
Calgary, Alberta T2P 3N9
Phone: 403-267-1100
Fax: 403-261-4622

Canadian Energy Pipeline Association (CEPA)
The Canadian Energy Pipeline Association is dedicated to ensuring a strong and viable transmission pipeline
industry in Canada in a manner that emphasizes public safety and pipeline integrity, social and environmental
stewardship, and cost competitiveness. Energy pipeline companies and those businesses that support them
can find relevant information on trends and factors affecting the industry by contacting the association.

Canadian Energy Pipeline Association
1650, 801 – 6th Avenue S.W.
Calgary, Alberta T2P 3W2
Phone: 403-221-8777
Fax: 403-221-8760
Petroleum Services Association of Canada (PSAC)
The Petroleum Services Association of Canada (PSAC) is the national association of Canadian oilfield service,
supply and manufacturing companies. The association’s mission, through effective presentation to govern-
ment, industry and the public, is to protect, promote and pursue the interests of its members and to advocate
standards, training, information dissemination and a code of practice for those in the oil field service, supply
and manufacturing industry.

Petroleum Services Association of Canada
Suite 1150, 800 – 6th Avenue S.W.
Calgary, Alberta T2P 3G3
Phone: 403-264-4195
Toll free: 1-800-818-7722
Fax: 403-263-7174

Petroleum Technology Alliance Canada (PTAC)
PTAC is an industry organization representing Western Canada’s upstream hydrocarbon industry. The
alliance supports and encourages innovation, research and technology. In 2004 it brought together industry,
government and academia for a variety of projects, information sessions, requests for proposals, forums and
workshops. One of the most significant was the Energy Innovation Network (EnergyINet) to develop a business
case for increasing recovery factors in oil and gas reserves in the Western Canadian Sedimentary Basin.

Suite 700, Chevron Plaza
500 – 5th Avenue S.W.
Calgary, Alberta T2P 3L5
Phone: 403-218-7700
Fax: 403-920-0054

                                     SECTOR PROFILE 43 ENERGY

Small Explorers and Producers Association of Canada (SEPAC)
SEPAC was formed in 1986 to represent and promote the unique interests of emerging oil companies to the
public, governments and other sectors of the oil and gas industry. The association now represents more than
380 member companies and is an important voice for small explorers and producers.

The association is also committed to educating the public at large about the importance of emerging compa-
nies in resource development in Western Canada, and investment opportunities available in the energy sector.

SEPAC is committed to proposing long-term, effective fiscal and operating strategies for the ongoing health
and vitality of the energy sector.

Small Explorers and Producers Association of Canada
1060, 717 – 7th Avenue S.W.
Calgary, Alberta T2P 0Z3
Phone: 403-269-3454
Fax: 403-269-3636

The Coal Association of Canada
The Coal Association of Canada represents companies that discover, develop, use and transport coal. Its
members include major coal producers and coal-using utilities, railways and ports that ship coal, and
industry suppliers.

The association gives its members a forum to discuss and coordinate their views and common interests.
It is also a respected voice that supports the clean use of coal through technology development and
communication with members, government and public-sector stakeholders.

The Coal Association of Canada
Suite 502, 205 – 5th Avenue S.E.
Calgary, Alberta T2G 0R3
Phone: 403-262-1544
Fax: 403-265-7604
National Energy Board (NEB)
Based in Calgary, the NEB is an independent federal agency that regulates several aspects of Canada’s
energy industry. It promotes safety, environmental protection and economic efficiency in the interest of all
Canadians and within the federal regulation of pipelines, energy development and trade. The NEB provides
Calgary energy companies ready access to federal government regulations and relevant officials, eliminating
costly travel and reducing communication and administrative costs.

National Energy Board
444 – 7th Avenue S.W.
Calgary, Alberta T2P 0X8
Phone: 403-292-4800
Toll free: 1-800-899-1265
Fax: 403-292-5503

Alberta Energy & Utilities Board (EUB)
The EUB works to ensure that the discovery, development and delivery of Alberta’s energy resources and
utilities services are fair, responsible and in the public interest.

The EUB adjudicates and regulates matters related to energy and utilities within Alberta to ensure that the
development, transportation and monitoring of the province’s energy resources are in the public interest. As
well, the EUB balances the interests of customers and investor-owned utilities by establishing rates, terms
and conditions of services. The EUB achieves this balance through an application and hearing process,
standards setting and regulation, monitoring, and surveillance and enforcement.

Alberta Energy and Utilities Board
640 – 5th Avenue S.W.
Calgary, Alberta T2P 3G4
Phone: 403-297-8311
Fax: 403-297-7336

                                   SECTOR PROFILE 45 ENERGY

Calgary Technologies Inc. (CTI)
CTI’s business is in the economic development of
Calgary’s advanced technology sector. Established
in 1981, Calgary Technologies Inc. is a joint partner-
ship with The City of Calgary, the Calgary Chamber
of Commerce and the University of Calgary. Together,
these organizations work with companies and
entrepreneurs to develop and expand technology
and life sciences in Calgary.

CTI provides an array of unique programs and
services for technology commercialization and incu-
bation, including networking. ConnectCalgary is one
of the major projects overseen and managed by CTI.

Calgary Technologies Inc.
3553 – 31st Street N.W.
Calgary, Alberta T2L 2K7
Phone: 403-284-6400
Fax: 403-282-1238

Calgary Regional Partnership
A number of diverse municipalities and jurisdictions, each with a unique identity, have joined the Calgary
Regional Partnership to work cooperatively on issues related to delivering municipal services to residents
and businesses, enhancing regional prosperity and protecting the natural environments upon which their
citizens depend.

Calgary Regional Partnership
Box 2093
Cochrane, Alberta T4C 1B8
Phone: 403-863-7425
Consulates and Honorary Consulates
The following consulates and foreign trade offices are located in Calgary to assist businesses in establishing
and growing foreign trade partnerships:

■ Consulate General of the United States of America

■ Consulate General of the People’s Republic of China

■ Consulate General of Japan

■ Consular Agency of Mexico

■ British Trade Office of UK Trade and Investment

■ Honorary Consulates representing more than 30 countries (including Austria, Denmark, France,
   Luxembourg, The Netherlands, Poland, Germany, Italy, Norway and Sweden).

                                  SECTOR PROFILE 47 ENERGY


As a global energy centre and international destination, Calgary hosts a number of recurring world-class
conventions and events. Calgary Economic Development works closely with energy-related associations
and organizations to ensure the success of events such as:

■ The Global Petroleum Show – Held every two years, this international exhibition presents the latest in oil
   and gas products and services and is a pivotal showcase for leading-edge technology in the exploration,
   production and transportation of oil and natural gas. The Global Petroleum Show also includes a technical
   conference. The event attracts about 50,000 exhibitors and attendees.

■ Go Expo: Gas and Oil Exposition – One of Canada’s largest oil and gas expositions, this event is held in
   conjunction with the Petroleum Society’s Annual Canadian International Petroleum Congress and features
   innovations and advances in technology in the industry.

■ The International Pipeline Conference and Exhibition – Held every two years it is designed to meet the
   current and future technology, development and business needs of industry. As well, it creates a forum
   for industry, government and regulators to learn about knowledge, expertise and issues related to pipeline
   engineering and development. This is the world’s largest show for pipeline products and technology.

Calgarians value the quality of their public health-care system and are committed to continuously improving its
services and program. For example, a new Alberta Children’s Hospital is under construction on the University
of Calgary’s West Campus by the Calgary Health Region. This world-class pediatric health-care facility will be
completed in 2006. It will feature state-of-the-art technology and family-centred care, research and education
– to the benefit of all Calgarians.

The vast majority of the Calgary area’s health services are delivered by 2,000 physicians (family practitioners
and specialists) and the Calgary Health Region. Funded by the Province of Alberta, the Calgary Health Region
employees 22,000 people and each year delivers more than $1.5 billion worth of health-care services at more
than 100 locations, including four hospitals in Calgary (the Foothills Medical Centre, Rockyview General Hospi-
tal, Peter Lougheed Centre and Alberta Children’s Hospital) and more than a dozen hospitals and health care
centres in the surrounding communities of Canmore, Banff, Claresholm, Didsbury, High River, Black Diamond,
Strathmore and Vulcan. In all, the Region serves more than 1.1 million people in southern Alberta, southeast-
ern British Columbia and southwestern Saskatchewan.

An integral part of Calgary’s health-care system is the University of Calgary, where the faculties of Medicine,
Nursing, and Kinesiology educate new generations of health-care practitioners and conduct world-renowned

Calgary was ranked as the Healthiest City in the World to live in in a survey by Mercer Human Resource
Consulting in 2004. The survey examined 144 cities.

                                      SECTOR PROFILE 49 ENERGY

In addition to the post-secondary institutions highlighted previously, Calgary’s education system includes:
the Calgary Board of Education, which has 215 public schools with more than 9,000 teaching staff and
nearly 100,000 students. Also, the city has 96 Catholic schools with more than 4,000 staff and nearly 44,000
students. A comprehensive curriculum of academic arts and sciences programs is offered by Calgary’s primary
and secondary schools, with a commitment to excellence and child-centred development. Calgary is also
served by a growing number of private, charter and alternative schools.

Alberta and Calgary students ranked at the top in reading, mathematics and science in an international study
undertaken by the Organization for Economic Cooperation & Development in 2003.


A modern metropolis with a Western heritage cowboy culture. An exceptionally productive workforce that
loves to play in the Rocky Mountains. A four-season city with abundant sunshine and warm chinook winds.

If ever a city offered the best of all worlds, surely it is Calgary.

By international standards, Calgary is young (founded just 130 years ago). But it is confident and successful.
For most of the past century the city has hosted “The Greatest Outdoor Show on Earth,” the annual Calgary
Stampede and Exhibition. In 1988, the city welcomed the world to the “best-ever” Olympic Winter Games,
demonstrating not only its friendly spirit, but its “we-can-do-it” attitude. These events reflect Calgarians’ love
of the Old West and winter sports, particularly skiing and ice hockey.

Calgarians love to work and play. They are Canada’s most productive workers – and arguably they have
Canada’s greatest backyard: the majestic Rocky Mountains which include Banff National Park and
Kananaskis Country.
Within city limits are the Bow River, one of the finest trout rivers in the world, more than two dozen golf
courses and three dozen parks connected by 580 kilometres of cycling and pedestrian pathways and
260 kilometres of on-street bike routes. Calgary’s natural environment is one of the city’s greatest assets.
Citizens and government alike are deeply committed to protecting and preserving the river valleys and
environmentally sensitive areas as well as the integrity of its communities.

First-class facilities such as the Pengrowth Olympic Saddledome, Spruce Meadows and Canada Olympic
Park provide additional recreational opportunities and act as training and performance venues for some of
the world’s best athletes. As well, recreational facilities abound, such as community ice hockey arenas,
swimming pools, soccer pitches and more.

Calgary’s moderate climate accommodates year-round outdoor activities. The city receives 2,395 hours of
sunshine a year. The average daily high in summer (June, July and August) is 22.3ºC; the average daily high
in winter (December, January and February) is –2.3º C, although daytime temperatures of 10º C are common
during chinooks, periodic warm western winds.

Arts and culture thrive in the city. The Epcor Centre of Performing Arts is home to several professional theatre
companies and the Calgary Philharmonic Orchestra, and hosts hundreds of touring performers every year.
Arts and artifacts take centre stage at the city’s two museums: the Glenbow Museum and the Nickle Arts
Museum. With programs in drawing, painting, sculpture, photography, glass, ceramics and other arts, the
Alberta College of Art and Design helps educate and expand Calgary’s artistic community.

In the performing arts, One Yellow Rabbit’s High Performance Rodeo is Canada’s leading festival of new
and experimental theatre, combining theatre, dance, poetry, music, radio drama, video art and spoken
word. The Esther Honens International Piano Competition, the International Organ Festival, Theatre Calgary,
the Alberta Ballet, Alberta Theatre Projects, and Calgary’s Folk Festival are other world-class cultural
organizations and events in Calgary cultural community.

During the 1980s, Calgarians relied on their entrepreneurial spirit to weather economic ups and downs;
today, about more than 13 per cent of Calgary’s workers are self employed.1

1 City of Calgary

                                  SECTOR PROFILE 51 ENERGY


Oil Sands and Heavy Oil Development
211114 – Non-Conventional Oil Extraction

Coal Production
212114 – Bituminous Coal Mining
212115 – Sub-bituminous Coal Mining
212116 – Lignite Coal Mining

Oil and Gas Exploration and Production
211113 – Conventional Oil and Gas Extraction
324110 – Petroleum Refineries

Oil and Gas Services and Supply
213111 – Oil and Gas Contract Drilling
213117 – Contract Drilling (except Oil and Gas)
213118 – Services to Oil and Gas Extraction
213119 – Other Support Activities for Mining

Electric Power Generation, Transmission and Distribution
221111 – Hydro-Electric Power Generation
221112 – Fossil-Fuel Electric Power Generation
221113 - Nuclear Electric Power Generation
221119 – Other Electric Power Generation
221121 – Electric Bulk Power Transmission and Control
221122 – Electric Power Distribution
Petroleum and Coal Products Manufacturing
324121 – Asphalt Paving Mixture and Block Manufacturing
324122 – Asphalt Shingle and Coating Material Manufacturing
324190 – Other Petroleum and Coal Products Manufacturing

Pipeline Operation
221210 – Natural Gas Distribution
486110 – Pipeline Transportation of Crude Oil

All dollar amounts stipulated in this profile are in Canadian funds. Where U.S. dollar conversions have been required,
they have been made based on the rate effective the date of publication of the data.

                      731 – 1st Street S.E.
                            Calgary, Alberta
                                  T2G 2G9
                     Phone: 403-221-7831
               or toll-free: 1-888-222-5855
                       Fax: 403-221-7828

Description: Global Business Centre in Canada document sample