Oil and Gas Invest Billions in Environment

GLOBE-Net - Canada’s oil and gas extraction industry spent $2.8 billion to protect the environment in 2006, more than any other industry, says a new publication by Statistics Canada.

The industry’s expenditures accounted for nearly one-third of the $8.6 billion outlay by businesses operating in Canada for both operating expenses and capital investment in environmental protection. This amount represents all expenditures made in response to environmental regulations, conventions and voluntary agreements.

Industry spending on waste management and sewerage services and pollution abatement and control activities represented almost half of the overall total.

These results followed a long-standing trend in which the largest share of environmental protection expenditures was made to deal with pollutants after they were created.

Provincially, Alberta businesses invested the most in facilities and equipment to protect the environment, again surpassing Ontario, the largest spender up until 2002.

Capital investment by businesses in Alberta for environmental protection amounted to nearly $1.9 billion in 2006, almost half (49%) of the capital expenditures nationally. Ontario businesses reported $827 million in capital expenditures, followed by those in Quebec ($371 million).

In terms of operating expenses for environmental protection, establishments in Ontario reported spending almost $1.6 billion, the largest amount. Alberta businesses were a close second with operating expenses of just over $1.3 billion.

Alberta’s lead position in capital spending on environmental protection was due mainly to high expenditures by the oil and gas extraction industry.

Put in perspective, for every $100 invested by the oil and gas extraction industry, $4 was invested in environmental protection.

Capital investments by Canadian oil and gas producers, most of which operate in Alberta, totaled over $1.7 billion in 2006. This investment occurred in areas such as pollution abatement and control, waste management, pollution prevention, and reclamation and decommissioning.

The oil and gas extraction industry also reported the highest operating expenses ($1.1 billion). This amount went mainly for reclamation and decommissioning, waste management and sewerage services and pollution abatement and control processes.

About $20 out of every $100 invested by the petroleum and coal products industry was for environmental protection, as that industry continued to upgrade refineries to meet new sulphur regulations.

Combined, the oil and gas extraction and petroleum and coal products industries accounted for almost two-thirds of total capital investment for environmental protection.

The industry spent nearly two billion dollars in 2006 on technologies that improve energy efficiency or reduce the use of fossil fuels.

Compared with industry spending on environmental protection, this amount represents a broader set of expenditures. It reflects a motivation by industry to adopt energy-related environmental technologies that exceed responses to environmental regulations, conventions or voluntary agreements.

The oil and gas extraction industry led the way with expenditures of $495.4 million on alternative energy and energy reduction technologies. Most of this amount, $472.9 million, was directed at capital projects.

The electric power generation, transmission and distribution industry spent a similar amount. However, it directed less to capital projects ($155.4 million) and more to operating expenses ($337.8 million).

Industry spending was directed to technologies such as cogeneration, waste energy recovery, solar energy and energy management systems.

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