The oil sands are Canada’s success story and an increasingly rare example of Canadian innovation, a report aimed at contributing to a better understanding of the oil industry.
“”National Project: How Oil sands investment and production benefits Canada’s economyConcludes that both investment in oil sands and increased production will raise gross domestic product (GDP) to the same extent, but increased investment will create more jobs than increased production. ..
The report, produced by Philip Cross, Senior Fellow of the Macdonald-Laurier Institute, determines that spending on production is more stable than investing in recession. Oil sands production is more resilient to industry downturns than traditional or shale operations, he added.
Therefore, investment in oil sands tends to be more cyclical than production, and lower fixed costs do not necessarily reduce prices, the report said. Due to the high fixed costs, there is little savings from reducing production, and increasing production lowers average production costs.
The report analyzes that a $ 10 billion investment in oil sands will raise Canada’s GDP by 0.5%. The corresponding employment increase would be 81,734 or 0.4% of Canada’s total employment, but an increase in employment to production from a $ 10 billion increase would lead to a 38,237 or 0.2% increase in employment.
“For investment, 18.3 Percentages of GDP generated occur in other states — worth $ 1.92 billion in absolute value. For higher production, 13.5 percent of GDP growth, or $ 1.415 billion, will occur in other parts of Canada, “the report said.
Jobs created in Alberta tend to be very lucrative, paying an average of $ 214,000 per year based on 2017 data. However, according to the report, average wages in some areas will decline if they are not directly involved in oil sands operations.
According to the report, Ontario sees about half of its non-Alberta job growth in terms of both investment and production growth, but there is little benefit to reach the Atlantic states.
Cross argues that oil patch innovation is a “good example” of “how Canadian ownership and indigenous peoples’ participation can help boost the economy.” For example, Alberta points out that he has developed unique technology and expertise for oil sands that large international companies do not have.
“In that case, it is important for the Canadian industry and government to set a straight public record of what the industry has achieved and its importance to the Canadian economy,” Cross wrote.
Change bad rap
The Canadian oil patch continues to fight some negative media and public perceptions, such as “a derogatory and completely inaccurate description as a’tar sand’.”
“Media depictions rarely show what an oil sands mine will look like after land restoration. This requires all companies to commit and secure funding when they start operations. There is, “says the report.
But the record of oil patch diligence and innovation gives the industry hope.
“Protecting large oil sands investments from adversary demonstrations requires further innovation to further reduce operating costs and emissions. The industry’s track record of constant innovation is such. It suggests that the results are very possible, “the report said.
The report insists on oil sands, which has a growing market share in the United States. Currently, 3.8 million barrels per day exported to the United States is expected to increase from 4.2 million to 4.4 million barrels per day over the next few years. ..