The construction of five proposed energy and mining projects in New Brunswick could provide a boost to the economy, which is currently experiencing a decline in investment and a period of stagnation, says a new report.
David Campbell of Jupia Consulting was commissioned by the New Brunswick government to produce a report titled Our Path to a Stronger New Brunswick: Potential New Brunswick Energy Infrastructure and Natural Resource Investments.
The report identifies five large scale energy infrastructure and natural resources development projects that sufficiently advanced in their planning to start construction between 2015 and 2020.
These proposed projects include: the Energy East Pipeline; the Canaport Energy East Marine Terminal; the creation of a shale gas industry; the conversion of the Canaport Liquid Natural Gas terminal into an export facility; and the Sisson Brook tungsten and molybdenum mine project.
Moving forward with these projects is critical for the New Brunswick economy which has experienced a period of stagnation and decline in the last few years, says the report.
The combined investment of $8.6 billion in these projects would contribute an average of $899 million worth of new GDP each year between 2015 and 2020. These projects would boost the provincial GDP by an annual average of nearly three per cent over the six-year period.
The proposed $12 billion Energy East Pipeline project involves the conversion of natural gas pipeline capacity to crude oil service in about 3,000 kilometres of TransCanada’s existing Canadian Mainline from Burstall, Sask. to Cornwall, Ont.
The project includes the construction of about 1,400 kilometres of new pipeline in Alberta, Saskatchewan, Manitoba, Quebec and New Brunswick.
Campbell’s uses a study produced by Deloitte & Touche LLP for TransCanada in September 2013 to estimate that $1.26 billion will be invested in New Brunswick on pipelines and $879 million on facilities and pump stations.
In total, over a six-year period, the project is expected to generate more than $1 billion worth of direct and indirect (includes the project supply chain) gross domestic product (GDP) in the province.
During the construction phase, a total of 11,200 full-time equivalent jobs will be created, which is an average of 1,867 jobs per year.
These jobs are expected to generate an estimated $571 million worth of labour income and $266 million worth of tax revenues to all levels of government.
The pipeline will terminate at Canaport in Saint John, New Brunswick where TransCanada and Irving Oil have formed a joint venture to build, own and operate a new $400 million deep water marine terminal.
The $400 million investment is expected to generate $79.1 million worth of GDP directly and another $83 million indirectly through the project supply chain.
The project will generate 1000 full time equivalent jobs directly and in the supply chain and generate an estimated $94 million worth of labour income. The project is expected to generate $37 million in taxes for government.
The two main components involved in the creation of the shale gas industry are the construction of a
$300 million natural gas processing facility and a limited drilling program. Campbell assumes 15 new wells will be drilled in 2016, followed by 20 in 2017, 30 in 2018, 50 in 2019 and 75 in 2020.
The natural gas processing facility would generate $122.2 million worth of direct and indirect GDP.
This moderate level of shale gas development is expected to generate $1.5 billion worth of direct and indirect GDP. The creation of this industry will generate 1, direct full time equivalent person years 395 full time equivalent jobs directly and indirectly.
Several firms are interested in converting the Canaport LNG receiving and regasification terminal in Saint John to an export terminal that ships gas to international markets.
This conversion is estimated cost $3 billion and will take between three to four years to complete. It includes the liquefaction plant, on-site LNG tank systems, power plant, additional pipeline infrastructure, possibly road and marine infrastructure, land and related costs, engineering and environmental consulting.
The project is expected to directly generate $593 million worth of GDP and another $629 million indirectly through the supply chain. It will require a total of 3,600 direct full time equivalent person year jobs, which is 1,200 jobs on an annual basis.
These jobs are expected to generate $706 million worth of labour income most of which will be spent in the provincial economy. The investment is expected to generate nearly $277 million worth of taxes to government.
The largest mining project in the development stage in New Brunswick is the Sisson Brook tungsten and molybdenum mine project. It is located on Crown land about 60 kilometres northwest of Fredericton.
Tungsten and molybdenum are essential minerals used in the manufacture of steel.
The proponent, Northcliff Resources, estimates it will require an investment of $579 million. The construction phase will take 24 months and directly employ about 500 workers and generate $70 million worth of direct and indirect employment income.
The construction of the project will generate $190 million in direct and indirect GDP and $56.5 million in tax revenue to the government each year.
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