Canada’s oil and gas industry provides Canada with declining royalty revenues, jobs

Earth scientist David Hughes argues that Canada cannot possibly meet its national GHG emissions targets while expanding exports in the oil and gas industry, building pipelines, and developing liquified natural gas in a new report, Canada’s Energy Sector: Status, evolution, revenue, employment, production forecasts, emissions and implications for emissions reduction, released on June 1.   Hughes documents the declining health and importance of the sector with economic statistics: “The energy sector’s contribution to Canada’s GDP, currently at 9 per cent, has declined over the past two decades, and government revenues from royalties and taxes have dropped precipitously. Despite record production levels, royalty revenue is down 45 per cent since 2000, and tax revenues from the oil and gas sector, which totalled over 14 per cent of all industry taxes as recently as 2009, declined to less than 4 per cent in 2018. Direct employment, which peaked at over 226,000 workers in 2014, was down by 53,000 in 2019 although production was at an all-time high due to efficiencies adopted by the industry.”

Combining statistics from the Petroleum Labour Market Information office with industry projections from the federal Canada Energy Regulator, Hughes concludes that energy jobs have peaked and previous levels of employment are unlikely to return.

“Jobs are often cited by industry proponents as a reason to support expansion of oil and gas production. Yet despite record production levels, jobs in the oil and gas sector are down from their peak in 2014 by 23 per cent …..Thanks to technological advances, the sector has become more efficient and is able to increase production using fewer workers….This jobs scenario is particularly true in the oil sands, where much of the production growth is expected. Oil sands production per employee is 70 per cent higher than it was in 2011 (production per employee has increased by 37 per cent in conventional oil and gas and by 50 per cent in the sector overall since 2011). In Canada’s overall employment picture, the oil and gas sector accounted for only 1 per cent of direct employment in 2019 (5.5 per cent in Alberta).”

At the same time, oil and gas production accounts for the largest portion of GHG emissions in Canada, at 26 per cent of the total – and Canada‘s GHG emissions have actually increased by 3.3 per cent since the Paris Agreement was signed in 2016 – the highest increase of any G7 country.  With such limited benefits and such serious negative consequences, Hughes argues against expansion of oil and gas exports – especially LNG in British Columbia and the TransMountain pipeline expansion, and Line 3.

Canada’s Energy Sector: Status, evolution, revenue, employment, production forecasts, emissions and implications for emissions reduction is summarized by the National Observer, here. Author David Hughes has written substantive reports previously, for example: A Clear Look at B.C. LNG (2015); Can Canada increase oil and gas production, build pipelines and meet its climate commitments? ( 2016); B.C’s Carbon Conundrum: Why LNG exports doom emissions-reduction targets and compromise Canada’s long-term energy security (2020); and Reassessment of Need for the Trans Mountain Pipeline Expansion: Project Production forecasts, economics and environmental considerations (2020).

The full report was published by the Corporate Mapping Project, a project of the Canadian Centre for Policy Alternatives in British Columbia and the Parkland Institute in Alberta. The report was co-published with Stand.earth, West Coast Environmental Law, and 350.org.

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