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Industry an economic gusher for Canada
Gary Park For Petroleum News
Canada’s thriving oil and gas industry contributed more than C$40 billion to economic growth in 2006, employed 298,000 people and put 80 percent more wages in the pockets of its workers than the average Canadian employee.
Statistics Canada, a federal government agency, said in a new report that Canada ranks eighth among world crude oil producers at 2.5 million barrels per day and that role will only grow “if geopolitical tensions remain high in other oil-producing areas of the world.”
But it’s not all positive, the report noted.
Energy sector infrastructure has been unable to keep pace with rapid expansion, resulting in housing shortages and overcrowding in schools and hospitals, while other businesses scrambling to find workers have been forced to cut their operating hours because of staffing shortages.
The industry has also had a significant negative impact on consumption of scarce water supplies, although oil sands producers have responded by recycling up to 90 percent of the water they use, Statistics Canada said.
On the job front, the number employed in the industry has climbed 22 percent over the past decade, led by the upstream component, which showed a 65 percent gain to 177,000, with Alberta claiming 75 percent of the workers.
“The impact on wages was pronounced,” said the report, entitled Fuelling the Economy.
Earnings gap widens In 1997, oil and gas employees earned 58 percent more per hour than the average worker, a gap that had widened to 80 percent by 2006.
In the upstream the average hourly rate was C$30.36 last year compared with C$16.73 for the labor market as a whole.
Between 1997 and 2006, investment in the upstream component surged 140 percent to C$435.3 billion, surpassing all other industries, while the value of oil and gas production soared 245 percent to C$108 billion.
Over that period, crude oil production increased 21 percent from 709 million barrels worth C$15.9 billion to 857 million barrels for the year, carrying a value of C$45.2 billion.
Natural gas production rose 8 percent in volume and 312 percent in value.
The midstream (pipelines, rail, truck and tanker transportation and storage) and the downstream (refining and marketing, utilities, service stations and petrochemical companies) sectors contributed a combined C$10.8 billion to Gross Domestic Product in 2006 and employed 121,000 people.
The spin-off results in construction and service industries were not calculated.
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