Oil and gas industry fuels economy: studies

Most Central Albertans realize that the oil and gas industry is a big contributor to the Canadian economy.

Most Central Albertans realize that the oil and gas industry is a big contributor to the Canadian economy.

Just how big is now clearer, thanks to a pair of studies commissioned by the Petroleum Services Association of Canada.

The Canadian Energy Research Institute has calculated that the oil and gas services sector accounted for $65 billion of Canada’s gross domestic product in 2006. By comparison, the residential construction industry contributed $34 billion, the forestry sector $29 billion, agriculture $26 billion and the auto industry $25 billion during the same year.

The institute also found that the industry employed 800,000 workers and generated $9 billion in personal and corporate taxes in 2006.

The second study, completed by Mission Capital Inc., determined that 36 Canadian oil and gas companies had combined revenues of $12.8 billion from international operations and export sales of manufactured products.

PSAC released details of the studies on Tuesday.

David Yager, the association’s chairman, said in a news release that public attention is generally focused on oil and gas companies’ exploration and production activities, the royalties and taxes they pay, and their profitability.

“While the essential role of the (oil and gas services) sector plays in supporting oil and gas development is generally understood, the degree to which this sector drives jobs, investment and economic activity is not,” he said.

Yager, who is the CEO of Calgary-based HSE Integrated Ltd., also said that the oil and gas sector adds considerable value to Canada’s natural resources that hasn’t been recognized.

The PSAC release said the studies were undertaken to illustrate the economic contributions of the industry, to seek recognition of the skills, technology and innovation within it, and to provide information that will help ensure it is consulted and considered when energy polices and industrial strategies are developed.

PSAC is a national trade association that represents service, supply and manufacturing companies within the upstream petroleum industry.