Business

Oil drilling booms in Alberta

Activity in Canada's oil industry in the third quarter reached its highest level in years, Statistics Canada reported Thursday.

Provincial revenue from sales of drilling rights hits record

Canada's oil industry was running at 88.2 per cent of full industrial capacity in the third quarter, Statistics Canada says. (CBC)

Activity in Canada’s oil industry in the third quarter reached its highest level in years, Statistics Canada reported Thursday.

The rate of industrial capacity utilization reached 88.2 per cent, the data agency said.

That’s a measure of how close a sector is running to total capacity. The higher the rate, the less capital and equipment sitting idle. The rate rose from 75.7 per cent two years ago.

The figures came a day after the government of Alberta reported 2011 was a record year for revenues from the sale of drilling rights on Crown land.

The province brought in $3.54 billion for the year. That broke the previous record of $2.39 billion paid by companies in 2010.

The year also saw a new record for the most paid for a single parcel, when an unidentified buyer paid more than $123.5 million for rights in August for land northwest of Edmonton.

Canada's oil industry is concentrated in Alberta, Saskatchewan and Newfoundland and Labrador. Alberta accounts for the biggest part.

While crude prices have generally been high over the period, natural gas prices have lagged.    

"Higher demand for support services for mining and oil and gas extraction, combined with increased oil extraction, more than offset the decline in gas extraction," Statscan said.