In the last two years, our members involved in shale gas exploration have invested more than $100 million in Quebec. If development of shale gas goes ahead, baseline studies indicate $1-3 billion capital investment per year over the next 15 years.
If shale gas is proven to be commercially viable, and Quebec allows it to develop, it will lead to the creation of a new service sector, significant regional job creation and enhanced employment opportunities in a wide range of support and professional roles.
The firm SECOR conducted a study to gauge these economic benefits. SECOR examined two scenarios, a 150 well per year scenario and a 600 well per year scenario.
In both cases, SECOR estimated that there would be six wells drilled per drilling site. The study calculated the creation of 5,000 to 19,000 jobs/year. These numbers look very conservative when compared to the study performed by PennState University which estimated that more than 44,000 jobs were created by the drilling of 710 wells in the Marcellus Shale in 2009. The study also predicts that in 2020, more than 200,000 jobs will be created by the Marcellus Shale development.
Government revenues, royalties and taxes will be significant in the production phase. The SECOR study found for the 150 well scenario, government revenue would be $1.4 billion/year or $5.4 billion/year for the 600 well scenario.
see fig1However, at this early stage of development it is not possible to predict the extent to which the industry will develop, since Quebec’s potential has not been sufficiently measured.
The SECOR study doesn’t include the costs of transmission and distribution of the extracted natural gas. Nor does it include corporate taxes paid by the industry and its suppliers. It doesn’t include the stimulus or capacity-building benefits for Quebec’s economy.