Natural Gas will put nearly $1 trillion dollars into the pockets of workers, companies and governments
OTTAWA, Dec. 17, 2012 /CNW/ - Natural gas investment and production is expected to add nearly $1 trillion to the Canadian economy and generate an average of 260,000 jobs annually over the next 24 years, according to a Conference Board of Canada analysis published today.
"Clearly, the natural gas industry contributes to Canada's economy and to the economy of each province," said Len Coad, Director, Environment, Energy and Technology Policy. "While the benefits are most concentrated where natural gas is produced, economic impacts are felt in manufacturing, construction and services industries in all provinces."
The analysis published in the report, The Role of Natural Gas in Powering Canada's Economy, includes direct, supply chain and other effects in order to quantify the full economic footprint of the industry.
Today, total natural gas production in Canada supports nearly 130,000 jobs and generates over $24.5 billion in economic activity per year. Natural gas accounts for 37.7 per cent of Canada's primary energy supply, satisfies 30.6 per cent of energy demand, and makes up 42 per cent of Canada's energy exports. Canada ranks 18th in the world in proven reserves of natural gas, third in production and fourth in exports.
The Conference Board estimates that Canadian demand for natural gas will double between 2012 and 2035. This estimate is based largely on three factors: natural gas demand for bitumen production (Alberta's oil sands), electricity generation (largely in Alberta and Ontario), and exports of liquefied natural gas (LNG) in British Columbia. However, Canada's growing demand will be met by declining exports to the United States; over the forecast period, Canadian natural gas production will remain roughly constant.
Still, the Conference Board estimates that natural gas industry will invest $386 billion (in 2012 dollars) over the next quarter-century to maintain production levels. The investments will be centered in British Columbia ($181 billion) and Alberta ($154 billion).
The upstream industry, which includes exploration, production, gathering systems, and liquids extraction facilities, will account for almost 76 per cent of the total investment.
This level of investment is forecast to generate $364 billion in real GDP, and support an annual average of 131,000 jobs per year. This investment would also contribute to labour income ($10.7 billion annually), corporate profits ($2.5 billion annually) and to government coffers ($5.3 billion per year in tax revenues).
Natural gas production will contribute another $576 billion to Canada's economy between 2012 and 2035, supporting 129,000 jobs per year.
In all, Canada's natural gas industry is expected to add a cumulative $940 billion to Canada's economy over the next 24 years, and generate roughly 6.2 million person-years of employment. In other words, the industry is expected to support employment of nearly 260,000 jobs per year over the 24-year forecast horizon.
The upstream investments shown for Quebec ($6.8 billion over the forecast period) reflect the potential for shale gas development in that province. Additional shale gas resources exist in Quebec, as well as in New Brunswick, but development of these opportunities is not included in the investment outlook. Regulatory decisions about whether and how to proceed with exploration and development are pending in both jurisdictions.
Quebec, Ontario, and Manitoba benefit from the industry's activity, through both direct investment in their economies and supplying increased demand for manufactured goods and services from investments in Western Canada. Although only 7 per cent of the direct investments will occur in Ontario, the province will receive 18 per cent of the resulting employment and 16 per cent of the total increase in labour income.
Over the 24-year horizon, natural gas investments will help create 560,000 person-years of employment in Ontario, and 199,000 person-years of employment will be created in Quebec. Saskatchewan is expected to gain 92,400 person-years of employment and Manitoba 39,200 person-years. The smallest jobs impact will be in Atlantic Canada.
The report, The Role of Natural Gas in Powering Canada's Economy, was funded by the Canadian Natural Gas Initiative. The publication is publicly available at the Conference Board's e-library.
Link to publication: http://www.conferenceboard.ca/e-library/abstract.aspx?did=5251
SOURCE: Conference Board of CanadaFor further information:
Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448