Decade of Offshore Projects Becomes 21st-Century Industry
FINANCE--Decade of Offshore Projects Becomes 21st-Century Industry
The Nova Scotia Department of Finance today released a new study that shows how important the oil and gas industry is to the provincial economy.
The effects of the offshore from 1990 to 2000 were significant, with total spending by oil and gas companies reaching close to $5 billion. Capital expenditures were valued at close to $4 billion, with another $1 billion spent on operating costs. Direct and spin-off employment reached 29,000 person-years.
Much of the activity associated with the offshore occurred in the late 1990s, primarily the result of the development and production of the Sable Offshore Energy Project (SOEP). Offshore-related employment peaked at 11,000 person-years in 1999. Value-added offshore activity for the SOEP development has been estimated at $773 million, $183 million more than expected.
Finance Minister Neil LeBlanc said the province was prompted to collect and analyse information to assess future impact of the industry because it lacked data to analyse the impact of the first 10 years of offshore development and production.
"The signs of economic activity associated with the offshore were hard to miss, especially in the late 1990s," said Mr. LeBlanc. "But an assessment of the total economic impact of the first decade was never analysed. We now have an analysis to help us plan for the next decade of offshore activity."
Gardner Pinfold Consulting Economists Ltd. prepared the study, called Economic Impact of Offshore Oil and Gas Development on Nova Scotia, 1990-2000. The province's energy strategy recommended that the Department of Finance undertake the economic impact study.
"The report offers us a valuable glimpse into our past, and will help us in moving forward to gather data in a more efficient, effective way as we enter into a new phase in our offshore development," said Energy Minister Gordon Balser. "Over the next year, we will have more exploration wells than we have had in the last decade -- that kind of exploration activity brings tremendous opportunity for employment and economic growth. Through the energy strategy, we're working with industry and other levels of government to continue that momentum."
The departments of Finance and Energy are already discussing with industry the implementation of the report's two recommendations. The recommendations include more appropriate data collection and better capture of data not included in project benefits plans and not publicly available data from Statistics Canada.
The report can be found on the Nova Scotia Department of Finance Web site, at www.gov.ns.ca/finance .