With continuing concern over the stuttering recovery of the once mighty U.S. economy, and much media comment about an apparently unstoppable Asian and Latin American boom, you may think it’s only grim tidings for Canada and North America.
Suncor’s Firebag Stage 3 in-situ facilities expansion is one of many new oil sands development projects collectively forecast to have a significant impact on the Canadian and U.S. economies over the next 25 years.
If you are down in the dumps about all this, then you probably missed one of the more uplifting pieces of recent news: the latest forecast on oil sands growth (PDF) from the highly regarded CERI, the Canadian Energy Research Institute. (CERI by the way is not an oil industry body, but an independent, not-for-profit research establishment created jointly by academia, government and industry in 1975).
CERI’s report is a detailed analysis of the impacts of potential growth, based on rising global demand for petroleum, of Canada’s oil sands sector. CERI says that oil sands expansion over the next 25 years will become a major source of employment, not only in the oil industry but also in supporting manufacturing and service sectors which supply the industry and feed, clothe and house its workers.
What’s more, all of North America will benefit, because all oil sands production for the foreseeable future will feed a continental value chain of manufacturers and service providers, upgraders, refineries and, of course, energy consumers -- from B.C. to Florida and Texas to the Northwest Territories.
Here are some of CERI’s predictions:
- Investment and reinvestments of revenues from new oil sands projects will reach approximately $2.1 trillion from 2010 to 2035. Of that, $253 billion will be strategic capital for initial construction, and $1.8 trillion will be spent on operations, maintenance and sustaining capital. Just to put that into context, $2.1 trillion could buy the entire NBA, NHL, NFL, and MLB leagues over 30 times (based on the average price of teams in each league).
- As a result, employment in Canada (direct, indirect and induced) will grow from 75,000 jobs in 2010 to 905,000 jobs by 2035. And for every two jobs created in Canada, another job will be created in the U.S.
- Ontario, British Columbia, and Quebec will also benefit from more jobs and a higher level of GDP, as will Illinois, California, Texas, Wisconsin, and Ohio. The Canadian government’s share of taxes over the same period will total $311 billion. Alberta alone will earn $105 billion in tax revenues. That’s a lot of new schools and hospitals.
But it would be foolish to believe this growth will not have some negative consequences. As we saw in the previous oil sands boom, overly rapid growth puts intolerable strain on infrastructure and drives inflation.
As much as we all want the economy to grow and prosper, it is vital that industry and government see the oil sands as a long term productive sector which should be nurtured wisely so it can provide a sustainable and enduring foundation for good and abundant jobs and the economic lifeblood of our communities.
How to get this right would be a good topic for discussion over that expensive cup of coffee…well, at least it’ll keep those baristas employed.