CEC: The numbers tell the story. Oil and Gas is important to the B.C. Economy
British Columbia (B.C.) has been producing oil and natural gas since 1952. In fact, as of 2018, B.C. produced 32 percent of Canada’s natural gas production and two percent of Canada’s conventional daily oil production. British Columbia’s collects royalties from oil and gas development, supporting the economic prosperity in the province.
Want to how important the oil and natural gas industry is to the B.C. economy? Using customized Statistic Canada data from 2017 (the latest year available for this comparison), it turns out oil and gas in B.C. generated about $18 billion in outputs, consisting primarily of the value of goods and services produced, as well as a GDP of $9.5 billion.
As for what most of us can relate to—jobs—the B.C. oil and gas industry was responsible for nearly 26,500 direct jobs and over 36,100 indirect jobs (62,602 jobs in total) in 2017. Also relevant: The oil and gas sector paid out over $3.1 billion in wages and salaries to B.C. workers that year.
Here’s another slice of statistical bread to consider: In 2017 the B.C. oil and gas industry purchased $5.6 billion worth of goods and services from other sectors. That included $600 million from the finance and insurance sector, $770 million in professional services, and $2.8 billion from the manufacturing sector, to name just three examples.
Spending by the oil and gas sector in B.C. is not the only way to consider the impact of the industry. Given that a large “chunk” of the oil and gas sector is next door in Alberta, let’s look at what Alberta’s trade relationship with its westerly neighbour does for B.C.
B.C.’s interprovincial trade in total with all provinces in 2017 amounted to $39.4 billion. Alberta was responsible for largest amount at $15.4 billion, or about 38 percent, of that trade.
That 38 percent Alberta share of B.C.’s trade exports is remarkable, given that Alberta’s share of Canada’s population was just 11.5 percent in 2017. Alberta consumers, businesses and governments buy far more from British Columbia in goods and services than its population as a share of Canada would suggest would be the case. Alberta’s capital-intensive, high-wage-paying oil and gas sector is a major reason why.
If Alberta were a country (and no, we are not suggesting it should be), the province’s $15.4 billion in trade with B.C. would come in behind only the United States (U.S.) (about $22.3 billion in purchases of goods and services from B.C.) in 2017. In fact, Alberta’s importance to B.C. exports was ranked far ahead of China ($6.9 billion), Japan ($4.5 billion) and South Korea ($2.9 billion)—the next biggest destinations for B.C.’s trade exports.
B.C. has a natural advantage for market access in some respects when compared to the United States. For instance, B.C.’s coast is near to many Asian-Pacific markets than are U.S. Gulf Coast facilities. The distance between the U.S. Gulf Coast and to the Japanese ports of Himeji and Sodegaura is more than 9,000 nautical miles, compared to less than 4,200 nautical miles between those two Japanese ports and the coast of B.C.
The recent demand for natural gas in Asia, especially Japan (the largest importer of LNG) and price increase for natural gas, presents an exciting opportunity for B.C. oil and gas industry. The IEA predicts that by 2024 , natural gas demand forecast in Asia will be up seven percent from 2019’s pre-COVID-19 levels.
Be it in employment, salaries and wages paid, GDP, or the purchase of goods and services, the impact of oil and natural gas (and Alberta) on B.C.’s economy and trade flows is significant.