Study predicts economic boost from Energy East pipeline
Pipeline would create 11,000 jobs and boost Canada's GDP by $35 billion.
CALGARY – TransCanada Corp.’s Energy East pipeline would deliver significant economic benefits to the Canadian economy, with all six provinces along the pipeline’s projected route projected to see job creation, economic growth and increased tax revenues, according to a report by Deloitte & Touche LLP.
The project involves converting a portion of natural gas pipeline capacity in approximately 3,000 kilometres of TransCanada’s existing Canadian Mainline to crude oil service and constructing approximately 1,400 kilometres of new pipeline. The pipeline will transport crude oil from receipt points in Alberta and Saskatchewan to delivery points in Montréal, the Québec City region and Saint John, New Brunswick, greatly enhancing producer access to Eastern Canadian and international markets. The pipeline will access a marine terminal in Québec and a terminal at Canaport in Saint John, New Brunswick where TransCanada and Irving Oil have formed a joint venture to build, own and operate a new deep-water marine terminal.
The analysis estimates that Energy East will generate $35 billion in additional gross domestic product (GDP) for Canada during six years of development and construction, and over 40 years of operation.
The report also estimates more than 10,000 full-time jobs will be directly supported during development and construction of the pipeline between 2013 and 2018 and another 1,000 full-time jobs will be directly supported by the pipeline once it begins service.
Approximately half of the jobs created in the development and construction phase will be in the construction, engineering, architectural and oil & gas support services industries, while approximately half of the jobs in the operations phase will be in the oil and natural gas pipelines and power generation and transmission industries.
“Energy East is a critical infrastructure project for all Canadians because it will enhance our country’s energy security, allow us to receive greater value for our important natural resources and will create tangible economic benefits for communities across the country,” said Russ Girling, TransCanada’s president and chief executive officer. “This pipeline is an excellent example of how Canada’s oil and gas sector is truly a national industry that generates thousands of jobs, billions of dollars in economic benefits and billions more in tax revenues.”
Deloitte also found that Energy East will generate an additional $10 billion in tax revenues for all levels of government over the life of the project. Deloitte’s projections were generated using Statistics Canada’s Input/Output model, which measures direct, indirect and induced economic effects of large industrial projects and activities in Canada.
The development and construction phase is expected to generate an additional $3 billion in tax revenues for municipal, provincial and federal governments across Canada. The operations phase will result in $7.2 billion in added tax revenues.
TransCanada announced the results of the open season for the Energy East Pipeline project on August 1, confirming that it will move forward with a 1.1 million barrel per day (bbl/d) pipeline based on binding, long-term contracts from producers and refiners to ship approximately 900,000 bbl/d of crude oil from Western Canada to Eastern Canadian refineries and export terminals.
Energy East is anticipated to be in service by late-2017 for deliveries in Québec and 2018 for deliveries to New Brunswick.