industries,also contribute to the Canadian
economy in ways you might not realize.
The industry employs some 25,000 workers. The majority
of those jobs are in Alberta, Ontario, and Saskatchewan,
but 29% are spread across the
rest of the country.1
Carrying increasing volumes of oil and
gas doesn't just boost the coffers of the pipeline
companies. Significant benefits can be
expected in ancillary industries, as well.
Companies that produce oil and gas will
benefit from enhanced access to domestic
and international markets. Refineries, petrochemical
plants, and distribution companies
also stand to benefit.
For retail investors, resource-based mutual
funds provide a convenient way to access
the resource sector. Fund choices range from
broad-based Canadian equity and balanced
funds that have modest exposure to the sector,
to those that focus exclusively on the
energy sector and natural resources.
If you're interested in this exciting sector,
we can help you sift through the available
funds to find solutions that are right
for your portfolio.
1 Canadian Energy Pipeline Association (cepa.com).
2 The Guardian, "Keystone XL oil pipeline - everything you need
to know," Jan. 31, 2014.
3 Government of Canada, National Energy Board, "Canadian
Energy Dynamics 2013 - Energy Market Assessment."
Profiting from pipelines
Laid end to end, there are enough
natural gas and liquids pipelines in
Canada to circle the earth 2.5 times.1 That's
an impressive statistic that helps explain
why crude oil, natural gas, and the pipelines
that carry them are expected to contribute
$130 billion to Canada's GDP over the next
30 years.1 And that doesn't even include the
potential growth from the major pipeline
projects currently in development.
The Keystone pipeline, for example, will
stretch almost 2,700 km from central Alberta
to the Gulf of Mexico if completed. The
Keystone XL portion would provide an exit
route that could facilitate a doubling of the
Alberta oil sands' current production.2
So while pipelines might be a hot potato
politically and environmentally, they're also
a potentially rich investment offering for
mutual fund investors.
Super natural resources
In a recent poll, 87% of respondents said that
oil and gas development are vitally important
to the Canadian economy, while 53%
ranked the sector as the most important.1
That attitude is a reflection of just how robust
this sector is.
Canadian crude oil output is projected
to rise to 4.9 million barrels per day by
2020, up significantly from the 3.2 million
produced in 2012.1
On the natural gas side, new technologies
are on the cusp of giving Canadian
companies the ability to unlock previously
inaccessible gases (including ethane, propane,
and butane) trapped in shale rock formations.
Called â€œfracking,â€ it has been a
contentious issue for environmentalists,
but that hasn't stopped its use. Quite the
contrary: In the U.S., the use of these techniques
has sparked a 32% increase in ethane
production since 2008.3
As new stores of oil and gas come online
and global demand for energy climbs,
pipelines play a key role. Moving all of
that oil and gas to buyers across Canada,
the U.S., and as far away as China is key to
the industry's long-term profitability.
Pipelines, and their satellite
Saturating our economy with potential
Just how vital are the oil and gas sectors to the Canadian economy?
As you can see,they are very vital indeed.
1 Canadian Association of Petroleum Producers, Basic Statistics (capp.ca)
2 Canadian Energy Pipeline Association (cepa.com)