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Gas inflates jobs, GDP Study separates gas impact from oil; C$106B contribution to Canada’s economy Gary Park For Petroleum News
A campaign to make natural gas the fuel of North America’s energy future has received a mighty hoist from a new study that estimates gas accounted for 6.7 percent, or C$106 billion of Canada’s Gross Domestic Product, in 2008.
In addition the industry created almost 600,000 direct and indirect jobs, or 3.5 percent of Canada’s workforce and C$31 billion in payrolls.
The study by IHS Global Insight is the first time the employment impact of the gas sector has been separated from oil.
Eric Marsh, EnCana’s executive vice president of natural gas economy, said even he was surprised by the numbers.
“What is really significant is the opportunity to grow … a world-class, efficient natural gas system and the opportunity (for Canada) to export roughly 60 percent of its production.”
He said in a news release the study “shows definitely that clean, abundant natural gas is a significant driver of Canada’s economy. …”
“As we make decisions about job creation, energy production and our transportation future, it’s crucial we keep in mind just how central natural gas is to Canada’s economy and family lives.”
Study commissioned by group The study was commissioned by America’s Natural Gas Alliance, an industry advocacy group formed a year ago and representing 33 of North America’s largest independent gas exploration and production companies.
In addition to EnCana, alliance members include Apache, Cabot, Devon Energy, EOG Resources, Talisman Energy and Williams. Marsh said the numbers remain valid, despite a 40-50 percent decline in gas drilling last year.
A parallel study showed gas accounted for 2.1 percent of jobs in the United States and 2.7 percent of U.S. GDP and concluded that the shale gas boom will save Americans $9 billion in heating bills this winter, or about $300 per household in some states.
“These findings show the role that U.S. natural gas reserves can play in spurring an economic recovery,” said Gregory Staple, chief executive officer of the American Clean Skies Foundation, a not-for-profit organization dedicated to advancing a low-carbon environment through increased use of gas and renewables.
“We hope that policymakers in Washington will take note,” he said.
Staple said natural gas prices have declined 37 percent between February 2008 and January 2010, compared with declines in gasoline and heating oil prices of 10 percent and 15 percent, respectively.
He said the savings in home-heating costs are a “de facto economic stimulus, comparable in size to the recently proposed Senate jobs bill.”
Marsh said that unlike previous years, when price and supply volatility discouraged a wholesale adoption of gas as a power-generation fuel, current lower prices and abundant supplies have made gas an attractive alternative to oil.
New drilling unlocks supplies The Colorado School of Mines’ Potential Gas Committee has estimated that new drilling has unlocked about 100 years worth of new gas supplies, which translates into gas trading on an energy equivalent basis for about $35 per barrel.
Marsh predicted tougher environmental regulations in Canada and the U.S. will contribute to rising gas demand, even though Calgary-based SemCAMS announced on Feb. 15 that lower prices have forced it to shut down an Alberta sour gas processing facility and lay off 45 people.
Of the Canadian findings, the report said the gas sector provided 16.1 percent of Alberta’s jobs — 125,032 direct jobs and another 199,668 indirect jobs from goods and services companies plus those created by direct and indirect employees’ spending.
The exploration and production segment in Alberta was credited with 73,457 direct jobs and income totaling C$6.82 billion.
British Columbia was estimated to have 111,743 gas-related jobs or 4.8 percent of the province’s total employment, while Ontario was third with 99,314 jobs, or 1.5 percent of employment.
Alberta claimed the largest financial stake in the gas industry, comprising 27.7 percent of C$80 billion of total GDP; Saskatchewan was second among provinces at 5.1 percent or C$3 billion of GDP; and British Columbia was third at 4.5 percent or C$9 billion.
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