Next quarter-century to be lucrative for natural gas
NEWS RELEASE FROM THE CONFERENCE BOARD OF CANADA
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.
“Clearly, the natural gas industry contributes to Canada’s economy and to the economy of each province,” says Len Coad, director of 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 the 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.
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.
6 THE WESTERN CANADIAN PIPELINE | WINTER 2013
Alberta Gold
STACEY LEE
Black gold, Texas tea, miasma, effluvium. Whatever you want to call it, Alberta’s shale formations abound with opportunity and will reinforce the province, and the nation, as one of the world's top producers of oil and gas.
A study conducted by the Alberta Energy Resources Conservation Board and the Alberta Geological Survey suggests the province's shale formations – including the Duvernay, Montney and Muskwa – hover above the world’s third largest crude deposit.
“The report was a strong vindication of what we suspected — that a lot of new emerging planes like Duvernay, Montney and Muskwa — are going to be very successful,” says Executive Vice President of the Canadian Society for Unconventional Resources Dan Allan.
The science suggests Alberta’s emerging shale plays could contain 3,324 trillion cubic feet of natural gas, 423.6 billion barrels of oil and as much as 58.6 billion barrels of gas liquid – proving Alberta’s future is not reliant wholly on the oilsands.
“Oil and gas companies will be looking at the success of pilot wells to determine how much of those resources-in-place can be converted to reserves and what that will cost,” says Allan. “The study tells them there is a significant resource-in-place and that is encouraging — a big prize out there.”
While you might assume the raw potential of the shale plays will exceed that of the already tapped oilsands, Allan is quick to point out it will take a lot of raw capital before large amounts of reserves are pulled from the earth.
“To be successful in making these new energy plays work it will require a
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