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By Mark Milke
and Lennie Kaplan
Canadian Energy Centre

When U.S. President Joe Biden recently revoked the presidential permit for the Keystone XL pipeline, it was a reminder of how anti-oil-and-gas activism and politics over the years can kill Canadian (and American) jobs.

It was also a reminder of how dependent Canada is on one major customer for oil and natural gas exports.

In contrast to Canada, consider Australia. For two decades, Australia made getting natural gas to its coasts (and liquefied natural gas or LNG) to ship to export markets a priority.


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According to the analytical firm Wood Mackenzie, Australia’s upstream oil and gas industry “experienced an unprecedented wave of investment and activity through the early 2010s.” That investment included multiple greenfield LNG projects, with most starting production in recent years.

Mark Milke

Mark Milke

Wood Mackenzie notes that the sheer scale of investment yielded substantial economic benefits, including “increased local employment, industrial activity to service construction and engineering tenders, and infrastructure build-out, alongside the inevitable trickle-down effect of this investment.”

Australia’s can-do approach to oil and gas is now starting to show up in various statistics.

In a recent comparison of the energy sectors in Canada and Australia, we found that on many measurements, Australia and Canada are headed in opposite directions when it comes to energy. A number of Australia’s indicators point up, while Canada’s indicators are generally in decline.

On gross domestic product (GDP), Australia’s oil and gas extraction sector was worth A$21.5 billion in 2007 but A$32.7 billion in 2016 (the most recent year available for this measurement), an increase of nearly 52 per cent. Canada’s GDP for oil and gas extraction fell in that decade, from $119 billion in 2007 to $42 billion by 2016, a 65 per cent decline.

On jobs in the oil and gas extraction sector (not including oil and gas investment, or pipeline employment), Australia’s job count rose to 38,116 by 2019 from 12,919 jobs in 2010. That’s a whopping 195 per cent increase over that period. In contrast, Canada’s oil and gas extraction employment stood at 55,853 in 2019, up from 51,686 jobs in 2010. That was a 4,167 increase in employment or just eight per cent.

Lennie Kaplan

Lennie Kaplan

There were some measurements on which Australia and Canada displayed similar trends. Revenues from oil and gas extraction dropped by 35 per cent in Canada between 2009-10 and 2018-19 (from $21.6 billion to $14 billion). In Australia, revenues from oil and gas declined by 34 per cent (from A$8.8 billion to A$5.8 billion) in the same decade.

But Wood Mackenzie points out that all the investment in LNG plants and export capacity is about to start paying off in revenues to Australia’s governments. The firm notes that the “economics of large-scale LNG projects that typify Australian oil and gas show that the lion’s share of direct economic benefit in the form of royalty and corporate income tax is expected to be accrued in the latter half of the 2020s.”

In contrast, not only has Canada been slow to hop on the LNG bandwagon, it still faces multiple barriers. The Canadian Energy Research Institute (CERI) found that “Canada has a competitive disadvantage” when it comes to oil and gas investments compared to the United States, never mind Australia.

CERI cited multiple issues, including:

  • much longer approval processes that add as much as 19 months to project timelines;
  • increased uncertainty related to government decisions and extra resulting costs;
  • higher risk compared to the United States;
  • delays to pipeline projects whenever legally challenged (which has now become routine), with the latter adding as 15 per cent to the overall capital cost of the project “in the first year.”

Canada has had a tough enough time competing with the United States for oil and gas investment. And Australia is also much more competitive than Canada due to all the above issues and more.

The stark difference is showing up in increased Australian employment numbers and will soon show up in Australian government revenues.

Mark Milke and Lennie Kaplan are with the Canadian Energy Centre, an Alberta government corporation funded in part by carbon taxes. They are authors of the report A Tale of Two Countries: Oil and Gas in Australia and Canada Over the Past Decade.

Mark and Lennie are Troy Media Thought Leaders. Why aren’t you?

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natural gas, energy

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