Impact of Pipelines on Our Everyday Lives
In Canada, a network of approximately 115,000 kilometres of underground energy transmission pipelines operate every day transporting oil and natural gas from where it’s produced, to where it’s needed. Most Canadians hardly think twice about the impact that these pipelines have on their day-to-day lives. But, did you know that in 2012, transmission pipeline operations of all types added more than $8.8 billion to Canada’s gross domestic product (GDP)? That’s impressive. Pipelines also sustained an estimated 25,000 full-time equivalent (FTE) jobs and generated about $1.9 billion in labour income.
How do we know all this? CEPA commissioned Angevine Economic Consulting Ltd., to examine the economic impacts of our energy transmission pipeline network over a one-year period. The first of its kind study, is called “The Economic Impacts from Operations of Canada’s Energy Pipelines”. (PDF)
The Economic Impacts from Operations of Canada’s Energy Pipelines
Download the Report (PDF)
Synopsis – Economic Impacts from Operation of Canada’s Energy Pipelines
Canada’s pipelines – including crude oil, natural gas liquids and natural gas – deliver the energy that heats our homes, powers our industries and fuels our vehicles. What is less visible is the impact that pipeline operations have on our economy every day. This study, “The Economic Impacts from Operations of Canada’s Energy Pipelines”, is the first study of its kind in Canada and presents a comprehensive assessment of the economic impacts of our energy transmission pipeline network over a one-year period.
The study, prepared for the Canadian Pipeline Energy Association (CEPA) by Angevine Economic Consulting Ltd. shows that in 2012, transmission pipeline operations of all types added more than $8.8 billion to Canada’s gross domestic product (GDP), sustained an estimated 25,000 full-time equivalent (FTE) jobs and generated about $1.9 billion in labour income. A conservative estimate of the total GDP contribution over the next 30 years is $130 billion1.
The findings in the report are subdivided into economic impacts from crude oil transmission, crude oil and natural gas liquids (NGL) transmission combined, and natural gas transmission, and are further broken down to show these contributions at a provincial level.
- Of the more than $8.8 billion contributed to Canada’s GDP by Canada’s transmission pipelines in 2012, Alberta received just under half of this benefit (45%), followed by Saskatchewan at 19% and Ontario at 16%.
- Alberta gained 40%, Ontario 20% and Saskatchewan 19% of the total $1.9 billion labour income across Canada in 2012.
- Of the 25,019 FTE jobs supported across Canada, 30% of them were in Alberta, 21% in Ontario and 20% in Saskatchewan. Almost 3,000 FTE jobs were created in British Columbia.
- Jobs supported by transmission pipeline operations are in a wide range of fields, including transportation and warehousing (32%); finance, insurance and real estate (12%); professional, scientific and technical services (8%); administration, waste management and remediation industries (8%); and wholesale and retail trades (10%).
In all cases, these figures represent combined direct, indirect and induced impacts2.
These findings clearly demonstrate that Canada’s energy pipelines are not only the main thoroughfares for Canadian energy on its way to domestic consumption or export, but are also a key driver of economic prosperity. And while this study captures the economic contribution made by transmission pipelines now operating in Canada, what is not counted here are the massive, additional, economic contributions across Canada supported by this network of pipelines.
The upstream energy sector and the industries at the other end of the pipeline, such as petroleum refiners, natural gas distribution companies and petrochemical companies are able to generate GDP contribution and provide employment and income thanks in great part to the energy transported by Canada’s transmission pipelines.
1 A 7.7% discount rate was used to arrive at the present value of future GDP contributions; i.e., $130 billion.
2 See Page 1 for a definition of direct, indirect and induced economic impacts.
This special report was prepared for the Canadian Pipeline Energy Association by Angevine Economic Consulting Ltd. The computed economic impact of Canada’s energy pipelines on incremental Canadian GDP, jobs, and labour income (the three principal items comprising “economic impact”) throughout this report arise from the use of Statistics Canada’s Input/Output Model. This independent, Government of Canada-developed economic model is constructed and used by Statistics Canada to measure any given input to an economy, such as the existence and operation of major infrastructure like Canada’s energy transmission pipelines, and is designed to model direct, indirect and induced economic effects of such inputs. It is important to recognize that the overall outputs must be considered estimates by their nature.