Socio-economic benefits from petroleum industry activity in Newfoundland and Labrador 2003 and 2004

An update on previous macroeconomic analyses of the impacts of offshore petroleum activities in Newfoundland and Labrador was presented. Details of industry activity and expenditures in Newfoundland and Labrador were presented as well as the resultant direct, indirect and induced economic benefits to the province. Related developments in infrastructure, education, training, and research and development were also provided. It was observed that there was a further consolidation and expansion of the offshore petroleum industry in the province as well as additional growth in its contribution to the province's economy. By 2004, the petroleum industry was responsible for nearly 25 per cent of the province's GDP, with total labour income being 12 per cent higher than it would have been without offshore petroleum industry activity. Significant positive effects were noted in retail sales, the unemployment rate, housing starts and the size of the provincial population. Production activity has become increasingly important, and there has been increased involvement of local companies and individuals in export work, indicating that the petroleum industry is making an important contribution to economic diversification and sustainability. New offshore petroleum activities included the Hebron oilfield project; satellite field developments in the Jeanne d'Arc Basin; exploration in the Orphan Basin and Laurentian Sub-basin; and the development of natural gas reserves using compressed natural gas (CNG) or alternative transportation strategies. Infrastructure, education, training and research and development activities were outlined. It was noted that the low level of exploration in 2003 and 2004 was a matter of concern. It was concluded that a failure to proceed with more recent development projects would be a major blow to the local petroleum industry and the economy as a whole. 2 refs., 2 tabs., 1 fig