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Study: Canada's oil and gas industries

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The Daily


Wednesday, May 23, 2007
1997 to 2006

A growing demand for energy, coupled with an increase in prices, has led to consistent growth in Canada's oil and gas sector during the past 10 years, according to a new study.

The study, published in the online edition of Perspectives on Labour and Income, analyzes economic activity in three components of the sector—upstream, midstream and downstream—as well as trends in employment between 1997 and 2006.

In 2006, the contribution of the oil and gas sector to Canada's gross domestic product exceeded $40 billion (in 1997 dollars). In addition, during the past decade, employment in the industry increased at a somewhat faster pace than the national average.

Total employment in all oil and gas industries amounted to roughly 298,000 in 2006, a 22% increase from 1997, a slightly faster gain than the average of 20% for the economy as a whole.

In the upstream component, which covers oil and gas exploration, extraction and production, employment increased at three times that pace, about 65%, from 107, 000 to roughly 177,000. The majority (75%) of the jobs were in Alberta, with its vast oil and gas reserves.

The impact on wages was pronounced. In 1997, employees in oil and gas extraction earned 58% more per hour than the average worker. By 2006, this gap had widened to 80%.

For example, workers in oil and gas extraction earned on average about $30.36 an hour in 2006, compared with $16.73 for the labour market as a whole.

In terms of volume, crude oil production rose 21% between 1997 and 2005. In 1997, total crude production amounted to just under 112.7 million cubic metres, with a value of $15.9 billion. By 2005, the volume had increased to 136.2 million cubic metres, and the value had nearly tripled to $45.2 billion.

Natural gas production increased by about 8% in terms of volume, but because of higher prices, the value rose by more than 312%.

The midstream component of the industry includes pipelines, rail, truck and tanker transportation, and storage. The downstream component consists of refining and marketing, and includes refineries, gas distribution utilities, oil product wholesalers, service stations and petrochemical companies.

Combined, these two components contributed about $10.8 billion to Canada's gross domestic product in 2006, and employed around 121,000 people.

Canada is currently the world's eighth-largest producer of crude oil, pumping out about 2.5 million barrels a day. Current world demand is about 84 million barrels, while production stands at about 86 million barrels.

Definitions, data sources and methods: survey numbers, including related surveys, 2148, 2191, 2446 and 2447.

The article "Fuelling the economy" is now available in the May 2007 online edition of Perspectives on Labour and Income, Vol. 8, no. 5 (75-001-XWE, free), from the Publications module of our website.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Cara Williams (613-951-6972; cara.williams@statcan.gc.ca), Labour and Household Surveys Analysis Division.