Oilweek Magazine online newsfeeds http://www.oilweek.com MONTREAL _ Growing demand for cargo transportation suggests the global freight recession may have ended, but industry observers remain concerned that a rising Canadian dollar may bring the progress to a screeching halt.After bottoming out in the second quarter of last year, demand for rail, air and trucking transportation has materially strengthened over the last four weeks, a report from UBS analysts Rick Paterson and Fadi Chamoun says.We`re no longer limping along from quarter to quarter, they wrote.But the head of the Canadian Trucking Alliance said the industry remains fragile even though the situation has improved since last fall.There are optimistic signs and things appear to have turned the corner but I don`t think people are dancing in the streets just yet, David Bradley said in an interview.He added that the fragile recovery could still be undermined by the Canadian dollar`s march towards parity.The Canadian dollar touched a 20-month high against the U.S. greenback on Friday, briefly trading for 98.47 cents, its highest level since July 2008, before closing at 98.20 cents U.S., up 0.57 of a cent.A rising loonie makes the country`s exports more expensive to buy in the U.S.Cross-border traffic, which accounts for about 40 per cent of trucking volumes and is responsible for the sector`s growth over the last 20 years, is down 20 per cent from last year.Meanwhile, railways in Canada and the United States saw their non-coal volumes increase compared with a year ago as total carloads for the week ending March 6 grew by 13 per cent to 739,292, the highest level since November 2008.The Port of Long Beach also said container traffic in February grew by 30 per cent from last year, while the Port of Vancouver reported shipments early this year topped its expectations after falling 11 per cent last year.We are pleased with the trend toward increased volumes that we have recently experienced through Port Metro Vancouver, said CEO Robin Silvester.Walter Spracklin of RBC Capital Markets noted railway carloads are still down 9.8 per cent from 2008, but said things are at least moving in the right direction.Canadian railways were ahead of their U.S. peers, with carloads up by 20.5 per cent from a year ago compared to an 11.4 per cent increase south of the border, he said in a report.So far this year, Canadian National Railway`s (TSX:CNR) carloads are up 13.4 per cent, compared with 5.2 per cent on average for railroads.At Canadian Pacific Railway (TSX:CP), carloads are up five per cent for the year to date.Another sign of positive trends is that the number of freight cars in storage reached its lowest level in a year.On the Toronto Stock Exchange, CN Rail shares closed at $58.39, up 39 cents in Friday trading. CP shares increased 12 cents to $56.35. http://www.oilweek.com/news.asp?ID=27279 HYTHE, Alta. _ A blowout and fire that erupted at a natural gas well in northwestern Alberta Feb. 24 have been capped.Alberta`s Energy Resources Conservation Board says in a release that crews have regained control of the well after working for several days to stem the flow of gas from the site, about 19 kilometres northwest of Hythe.The board says cement will be pumped down the well hole to ensure gas can`t start flowing again and abandonment of the site can get underway.There were no reports of injuries during the blowout and no evacuations were ordered.The energy company watchdog says there were no emissions of potentially deadly hydrogen sulphide gas, and that field inspectors will continue to monitor the site, which is licensed to Canadian Natural Resources Ltd. (TSX:CNQ, CNQ.U).The board also says it will investigate and issue a report on the blowout, which RCMP have said was not suspicious. http://www.oilweek.com/news.asp?ID=27278 ST. JOHN`S, N.L. _ Premier Danny Williams said Friday was a sad day in the history of Newfoundland and Labrador as people mark the first anniversary of a fatal helicopter crash.Seventeen people died when Cougar Flight 491 slammed into the ocean off the province`s east coast on March 12, 2009.In a statement, Williams said deep sorrow remains in the hearts of everyone in the province as they recall the crash.He called it a profound tragedy that shook the province and changed countless lives.Williams said his thoughts were with the families who continue to mourn the unimaginable loss they experienced on this day one year ago.Defence Minister Peter MacKay, who is also the regional minister for Newfoundland and Labrador, extended his sympathies on the anniversary of the tragedy.A year has passed already, but the feelings of shock and grief we experienced at first news of the tragedy remain fresh in our hearts, he said in a statement.Newfoundlanders and Labradorians are joined today by Canadians everywhere in solemn remembrance of those lost.A makeshift memorial for the victims of the crash was restored outside the chain link fence at Cougar`s base near the St. John`s airport.At one point, about a dozen energy workers in orange immersion suits paused briefly at the memorial before boarding a helicopter headed for the offshore rigs.Numerous messages have been attached to floral arrangements, much like a year ago in the days immediately following the crash.Gerald Lodge, an uncle of John Pelley, a 41-year-old medic who died in the crash, said his family remains emotionally raw one year later.They say time heals, but it`s not very easy, he told NTV. It`s hard to believe it`s been a year. It still seems really fresh in our minds and we`re still having a hard time coping ... We talk about John as if he was there with us. It`s hard. We miss him.Later in the day, a memorial mass was held in St. John`s at the Basilica Cathedral of St. John the Baptist.We`ve come to pray with the family, friends and relatives of those who lost their lives a year ago today ... It`s with heavy hearts and a great sense of loss that we`ve come together, the basilica`s pastor, Rev. Charles Kelly, told the interfaith service.We gather to find comfort, strength and solace in our faith, in our community, in our family and with our God.(The Canadian Press, VOCM) http://www.oilweek.com/news.asp?ID=27277 CALGARY _ A report says storing vast amounts of greenhouse gases underground is feasible in Alberta, but there are risks.The 16-month study was led by the University of Calgary and financed by industry and the province. It found the ground beneath the Wabamun area has the capacity to store about 500 million tonnes of carbon dioxide without pressure forcing it back to the surface.That`s an amount roughly equal to half the emissions for 30 years from all of Alberta`s centrally located coal-fired power plants. Most of the province`s coal-fired plants are located around Wabamun, which is west of Edmonton.That`s a big number, said study leader David Keith.But there are concerns.The study found naturally occurring fluids in the formation contain significant concentrations of dissolved hydrogen sulphide, a poisonous gas that could potentially mix with the pure CO2 injected into the ground.That presents a risk that nobody had thought about before, Keith said.The dangers basically have to do with CO2 leaking back to the surface. There`s some groundwater dangers. I think those are basically somewhat overhyped _ not that they don`t exist _ but in practice they`re not the ones that probably should concern us most.I think risk means something in context and the number of people who are killed by particulate emissions from power plants in North America is many thousands a year and the kind of risks we`re talking about from CO2 storage are a thousand times smaller than that.Keith said the underground reservoir in the area is not unique and the data collected could probably be applied to other areas of the country.He also said the cost of injecting and storing CO2 is relatively low _ about $3 per tonne of carbon dioxide. But for a full carbon capture and storage project the costs required to capture, pressurize and transport the gas would be at least 10 times that.I hope this helps by kind of removing some issues that aren`t that essential to the debate so we can focus on the ones that matter _ like who should pay, how cost effective is it and who should be responsible for managing the long-term security concerns.The Alberta government doled out about $2 billion last year to back several large-scale projects to collect carbon dioxide from emitters, pipe it to a wellhead and inject it deep underground. http://www.oilweek.com/news.asp?ID=27276 TORONTO _ The Toronto stock market moved slightly higher Friday, closing above the 12,000 mark for the first time in about a year and a half amid mixed signals about the health of the U.S. economy.The S&P/TSX composite index was 34.12 points higher at 12,013.82 _ finding support from base metals but held back by the telecom and tech sectors. The last time the TSX closed above 12,000 was Sept. 26, 2008, when stock markets were tumbling all over the world as the financial crisis moved into high gear.Stocks had been modestly higher at the start of trading Friday after a surprising increase in February U.S. retail sales. But investors were displeased with other data showing that business inventories were unchanged, rather than having increased.Investors are looking for businesses to restock store shelves on a consistent basis, which would be a positive signal for the U.S. economy.The TSX base metals sector maintained a gain of 0.8 per cent as May copper was unchanged at US$3.38 a pound. Teck Resources (TSX:TCK.B) gained 55 cents to C$41.58.The TSX energy sector was off 0.31 per cent as the April crude contract on the New York Mercantile Exchange lost 87 cents to US$81.24 a barrel after earlier rising above US$83. EnCana Corp. (TSX:ECA) fell 40 cents to C$35.20 The energy component failed to benefit from the Alberta government`s announcement that it is cutting the royalties it charges the oil and gas industry. The maximum royalty rate for both natural gas and oil had been 50 per cent. But the Alberta government said Thursday the cap will be lowered to 40 per cent for oil and 36 per cent for gas.I think this was fairly well telegraphed to the market and I think the market was expecting some constructive change to the approach to provincial royalties, said Gary Aitken, lead manager of the Bissett Canadian Equity Fund.The TSX put in a flat showing for the week, up 38 points. But that followed a sharp, three per cent gain last week on higher commodities and strong earnings from the big banks.Meanwhile, the Canadian dollar closed up 0.57 of a cent at 98.2 cents US. It had earlier surged as high as 98.47 cents US _ its highest level since July 2008 _ following the release of jobs data for February that came in better than expected.It was a very solid report. We saw the currency power above 98 cents within seconds of the employment numbers hitting the wires this morning, said Doug Porter, deputy chief economist at BMO Capital Markets.I think it really does just reinforce the view that the Bank of Canada will be hiking interest rates earlier and more often than the U.S. Federal Reserve in the second half of this year.Statistics Canada said 21,000 jobs were created last month, better than the 15,000 that had been expected by many economists, while the unemployment rate fell by one percentage point to 8.2 per cent from 8.3 per cent.The market also found support from sector heavyweight Potash Corp. (TSX:POT). Its shares ran up $8.30 to $128.03 as it raised its first-quarter earnings guidance due to a sharp rebound in potash demand.The Saskatchewan-based company said it now expects to earn between $1.30 and $1.50 per share for first three months of the year, up from earlier guidance of 70 cents to $1 per share.The TSX Global Cold Index was the leading loser as the April gold contract on the Nymex was down $6.50 to US$1,101.70 an ounce. Kinross Gold Corp. (TSX:K) faded 24 cents to C$18.20. The TSX Venture Exchange was ahead 7.35 points to 1,568.29. The U.S. Commerce Department said Friday that retail sales rose 0.3 per cent in February, surpassing expectations that sales would decline by 0.2 per cent.Excluding autos, sales rose 0.8 per cent, far better than the 0.1 per cent rise outside of autos that economists had forecast.The Commerce Department also said Friday that inventories were unchanged, a weaker reading than the 0.2 per cent gain analysts had expected.The Dow Jones industrial average rose 12.85 points to 10,624.69.The Nasdaq composite index was eight-tenths of a point lower to 2,367.66 while the S&P 500 index lost a quarter of a point to 1,149.99.A weaker report on consumer sentiment also held the market from making big moves. The preliminary Reuters/University of Michigan consumer sentiment index for March fell to 72.5 from 73.6 in late February.Fertilizer producer Agrium Inc. (TSX:AGU) soared after it announced that its hostile takeover bid for U.S. company CF Industries Holdings Inc. would be allowed to expire. Agrium shares climbed $5.09 to $73.42.Agrium had offered US$45 in cash plus one of its shares for each CF share in a bid that valued Illinois-based company at nearly US$5.5 billion. However, the offer was contingent on CF dropping its own takeover bid for Iowa-based fertilizer producer Terra Industries Inc., which has now agreed to merge with CF.In other corporate news, First Uranium Corp. (TSX:FIU) shot up 19 cents to $1.68 after it said it will issue between $125 million and $150 million in secured, convertible debt to several parties including current shareholder groups. The Toronto-based company warned last month that its financial condition had been severely compromised by problems getting government environmental approval for a future storage facility in South Africa.Goldcorp Inc. earned a profit of US$66.7 million in its latest quarter as revenue grew nearly 30 per cent from a year ago. Still, its shares declined 78 cents to $40.09. http://www.oilweek.com/news.asp?ID=27275 NEW YORK _ Oil prices ended the week lower following mixed economic reports that kept investors on edge about the outlook for improving energy demand.On Friday, benchmark crude for April delivery slid 87 cents to settle at US$81.24 a barrel on the New York Mercantile Exchange. Prices jumped as high as $83.16 earlier, after the U.S. Commerce Department reported a surprise increase in February retail sales and the International Energy Agency said world energy demand this year could be better than previously thought.The IEA, based in Paris, predicted in its monthly report that oil demand will average 86.6 million barrels a day this year, or 1.6 million barrels a day more than in 2009, up slightly from last month`s forecast.PFGBest analyst Phil Flynn said IEA`s report of astonishing demand growth out of China pushed prices higher before traders backed off.That`s the third report this week that showed China`s demand growth is going to be strong, said Flynn.Still, he thinks China`s growth raises concerns. The bottom line is the Chinese government is leading the global economy out of a recession, but if they end up popping, everyone will feel the reverberations, said Flynn.U.S. retail sales rose 0.3 per cent in February. Analysts expected a decline of 0.2 per cent. The increase was the biggest since November and provided some hope that the recovery from the Great Recession is picking up speed.One energy analyst warned that consumers may be spending a little more, but are still worried about their jobs and losing their homes to foreclosure. A return to pre-recession profligacy appears out of the question, for the moment, said Mike Fitzpatrick of MF global.This week a few economic data points nudged oil back and forth, but for the most part prices held steady in a tight range, settling between $81.24 per barrel on Friday and $82.11 on Thursday. Flynn said traders are waiting for more significant economic news to guide their plays, with next week`s U.S. Federal Reserve meeting and the OPEC ministers meeting in Vienna on their radar.In other Nymex trading in April contracts, heating oil fell 2.1 cents to settle at $2.094 a gallon, and gasoline lost 1.7 cents to settle at $2.255 a gallon. Natural gas gave up four cents to settle at $4.4 per 1,000 cubic feet. Earlier it hit a 52-week low of $4.412 per 1,000 cubic feet.In London, Brent crude fell 89 cents to settle at $79.39 on the ICE futures exchange.___Associated Press writers Barry Hatton in Lisbon, Portugal and Alex Kennedy in Singapore contributed to this report.(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE) http://www.oilweek.com/news.asp?ID=27274 CALGARY _ Now that a prolonged saga that entangled three major North American fertilizer producers appears to have finally been resolved, an analyst expects the sector to take a breather from big takeover deals.After more than a year of dizzying twists and turns, Agrium Inc. (TSX:AGU) has decided to walk away from its hostile pursuit of U.S. nitrogen producer CF Industries Holdings Inc.And CF (NYSE:CF) on Friday announced a US$4.7-billion merger deal with Iowa-based Terra Industries Inc. (NYSE:TRA), which had shrugged off CF`s overtures since last January until a sweetened offer was put on the table this week.Back then, when the companies started this, it was definitely opportunistic in the sense that the share prices had cratered, said Broadpoint AmTech analyst Edlain Rodriguez.Now I think those values have been realized ... You might see little transactions here and there, but I don`t think you`re going to see anything big going forward. I think that`s done with.Calgary-based Agrium`s chief executive officer expressed no lament for the CF deal not having panned out, saying there were plenty of opportunities to grow its existing potash and urea production. It also recently added 60 Canadian retail farm centres to its portfolio.Too many companies get caught up in deals and overpay. ... We`re a very disciplined company, he said.We`re not disappointed. We did the right thing for our shareholders.Investors pushed Agrium`s stock up $5.09 or 7.45 per cent to $73.42 Friday on the Toronto Stock Exchange, with almost 2.3 million shares traded.Fertilizer producer Agrium Inc. (TSX:AGU) gained after it announced that its hostile takeover bid for U.S. company CF Industries Holdings Inc. will be allowed to expire. Agrium shares climbed $5.09 or $73.42.Investors probably didn`t want Agrium to add more nitrogen production to its portfolio through its acquisition of CF, since the two other major crop nutrients _ phosphates and potash _ tend to deliver better value, Rodriguez said.Beefing up the potash business, the retail business made more sense instead of getting deeper into nitrogen and clearly the market reaction today kind of bears that out, he said.Potash Corp. of Saskatchewan (TSX:POT), the world`s biggest potash producer, reinforced the view that demand for that crop-strengthening mineral is set for a rebound.It said Thursday that it now expects to earn between $1.30 and $1.50 per share for first three months of the year, up from earlier guidance of 70 cents to $1 per share.The guidance compared with a profit of $1.02 per share in the first three months of 2009.Strong farmer returns, a depleted distributor pipeline and the agronomic need to replace soil nutrients have kick-started a potash rebound from 2009 lows, said PotashCorp president and chief executive Bill Doyle.While we know that growth does not follow a straight upward line, we believe the increase in potash sales volumes this quarter represents the beginning of a return to long-term growth in demand.CF, meanwhile, said its merger with Terra will create the second-largest nitrogen producer in the world.We are excited to begin working together to become a more competitive global fertilizer player with enhanced scale, a broader strategic platform and enhanced access to capital markets, said CF chief executive Stephen Wilson.Our customers will benefit from expanded availability and flexibility of nitrogen product sourcing as a result of the complementary distribution and manufacturing assets of the two companies, Wilson said.CF had rebuffed all of Agrium`s overtures since it made its initial offer in February of last year, saying it would prefer to pursue Terra.Agrium made its US$5.5-billion offer contingent upon CF dropping its bid for Terra.The so-called fertilizer wars appeared to be tilting in Agrium`s favour a month ago, when Terra inked a friendly US$4.1-billion deal with Norway`s Yara International.But CF tabled a US$4.7-billion bid for Terra last week and the two companies announced Friday they had reached a deal and that Terra had terminated its agreement with Yara.In New York, CF`s shares dropped 3.4 per cent to US$97.20 and Terra`s dropped 1.3 per cent to US$46.30. http://www.oilweek.com/news.asp?ID=27273 WINNIPEG _ Greyhound Canada apologized Friday after more than a dozen passengers were left on the side of a northern Manitoba highway in near-freezing weather.The apology did little to soothe aboriginal leaders, however, who demanded an investigation.There used to be a time when we were asked to ride in the back of the bus. But to the side of the road? I have to question whether progress has been made, said Eric Robinson, Manitoba`s deputy premier.Robinson was joined by northern community leaders who, while admitting they didn`t know exactly what happened, insisted it was wrong on Greyhound`s part.There are going to be different versions of this story but ... for people to be subjected to being out in the cold, some of whom had been through surgery, it`s inhumane, said David Harper, grand chief of the Manitoba Keewatinowi Okimakanak, the group that represents the province`s northern First Nations.Greyhound and the aboriginal leaders agreed on some aspects of the event. The bus was heading toward Cross Lake on Wednesday when, about 40 kilometres shy of its destination, the bus driver decided to turn around to pick up two passengers who had been forgotten in Wabowden.Rather than face a three-hour round trip, some passengers _ it`s not clear how many _ demanded to be let off the bus so they could find another way to Cross Lake. They got off near a hydro station and stood beside the road for about 10 minutes before Manitoba Hydro workers came across them and helped.Aboriginal leaders said they were not sure that everyone who left the bus did so voluntarily. Greyhound was still investigating, but the impromptu stop appeared to violate company policy.Our drivers are trained to take riders to Greyhound-sanctioned stops only, the carrier said in a written statement. We are conducting a full internal investigation, and the operator is not driving today.The company also said officials would meet next week with Harper and that passengers would be offered refunds.First Nations communities have called for improvements to bus service in the region. Buses are the only affordable mode of transportation for many northern communities and are frequently used by people returning from hospital treatment in the south. http://www.oilweek.com/news.asp?ID=27272 MONTREAL _ A recent surge in demand for rail, truck and air transportation suggests the global freight recession may have ended, industry analysts said Friday.After bottoming out in the second quarter of 2009, demand has materially strengthened over the last four weeks, says a report from UBS analysts Rick Paterson and Fadi Chamoun.We`re no longer limping along from quarter to quarter, they wrote.United Parcel Service (NYSE:UPS) and logistics firm Expeditors International (Nasdaq:EXPD) have indicated that strong air freight growth last fall continued through at least January.The International Air Transportation Association recently revised its outlook, saying cargo volumes should increase by 12 per cent in 2010. That`s up from seven per cent in earlier forecasts.The Port of Long Beach says its container traffic grew by 30 per cent in February from last year.The American Trucking Association said its seasonally adjusted truck tonnage index was up 1.9 per cent in January.Railways in Canada and the United States saw their non-coal volumes increase over the last week from a year ago.Total carloads grew by 13 per cent to 739,292, the highest level since November 2008. They are also up 3.5 percentage points from the previous week.Carloads were down 9.8 per cent from 2008 but things are at least moving in the right direction, added Walter Spracklin of RBC Capital Markets.Canadian railways were ahead of their U.S. peers, with carloads up by 20.5 per cent compared to an 11.4 per cent increase south of the border, he said in a report.Canadian carloads improved 9.5 percentage points from the previous week, while U.S. carloads were up 2.2 percentage points.Canadian National Railway`s (TSX:CNR) carloads grew the most, up 23.8 per cent over the week, compared to a group average increase of 13 per cent.So far this year, its carloads are up 13.4 per cent.At Canadian Pacific Railway (TSX:CP), carloads increased by 5.3 per cent during the week and five per cent for the year to date. Intermodal traffic grew by 19.2 per cent for the week but is down 0.9 per cent year to date.Overall Canadian volumes were driven by an 86-plus per cent surge of gravel and metallic ores. Chemicals were up 34.3 per cent and automobiles 42.5 per cent.Grains decreased by 5.7 per cent in the week. Pulp and paper products were down marginally but lumber was up 13.6 per cent. http://www.oilweek.com/news.asp?ID=27271 TORONTO _ The Toronto stock market closed higher amid mixed signals about the health of the U.S. economy.The S&P/TSX composite index rose 34.12 points to 12,013.82 _ its first close above 12,000 since late September 2008 as the financial crisis was gaining momentum.Investors were encouraged by a surprising increase in February U.S. retail sales, but sentiment was depressed with other data showing that business inventories were unchanged, rather than having increased.Oil lost 87 cents to US$81.24 a barrel.The Canadian dollar was ahead 0.57 of a cent to 98.2 cents US after Statistics Canada said the February employment report showed that 21,000 jobs had been created. That was much better than the 15,000 that had been expected.The Dow Jones industrial average rose 12.85 points to 10,624.69. The Nasdaq composite index was eight-tenths of a point lower at 2,367.66, while the S&P 500 index lost a quarter of a point to 1,149.99. http://www.oilweek.com/news.asp?ID=27270