Thank you, Mr. Chairman, and thank you for allowing me the opportunity to appear before the committee. Let me just say from the outset that if there's anything that you need for the committee's work that I'm unable to provide today, we'd be happy to follow up separately and make sure you have the information you need.
I hope my remarks are of assistance as you study various aspects of energy security. Spectra Energy is one of the largest natural gas gathering, processing, transportation, and delivery systems in North America. We operate in seven Canadian provincial jurisdictions, with a significant presence in British Columbia, Ontario, and Atlantic Canada and 3,400 Canadian employees coast to coast. Our operations have deep roots in Canada, more than 50 years of history in B.C., and this year we celebrate 100 years of operations at Union Gas. My written testimony highlights our Canadian and North American footprint and operations in more detail.
Let me first take a moment to talk about our cultural commitment to safety. Our employees live and work in hundreds of Canadian communities, and we're committed to their safety and the safety of the public. We operate and maintain our facilities using thoroughly tested procedures and standards, while adhering to and surpassing strict regulations. With respect to safety, we have a relentless commitment to a zero work-related injury and illness culture. In support of these efforts we ask provincial and federal governments across Canada to work together to support the creation of a national “Call Before You Dig” program. Third party excavation damage continues to be the leading cause of pipeline incidents in Canada.
Given the scope, scale, and geographic diversity of our businesses, Spectra Energy is well positioned to speak to regional economic impacts of energy development throughout Canada. What I hope you take away from my presentation is that the ripple effect from activities in one particular jurisdiction extends widely across our sector and delivers benefits for Canada as a whole.
Let me start with northeast British Columbia. Spectra Energy's assets in B.C. are significant by any measure. Our pipeline and gas processing assets form the backbone of the natural gas sector in B.C. We connect B.C.'s natural gas exploration and production industry with millions of customers who rely on natural gas as a feedstock for manufacturing, as a boiler fuel for electric generation, or as a means to heat their homes and businesses. We process and transport 60% of the natural gas produced in the province, with growth under way. Our system supplies all of the natural gas needs for B.C. and 50% of the natural gas demand in the states of Washington, Oregon, and Idaho, and it is interconnected with the North American pipeline grid.
I recognize this committee has heard testimony about the emergence of new technology and how it's vastly changed the supply picture in North America. In response to this supply growth in the Horn River and Montney/Doig resource areas, Spectra Energy is investing heavily in B.C.'s future. We're expanding our infrastructure to carry these new shale natural gas supplies to markets in western Canada and beyond. Our expansion program is targeted to invest about $1.5 billion in our B.C. assets between 2009 and 2012. To give you a sense of the importance of western Canada in our company, that $1.5 billion represents almost a half of our company's current capital expansion program.
Our expansion program to respond to the ramp-up in production means boots on the ground in northeast B.C. and resulting direct and indirect benefits across the country, spread much more broadly than just in the northern communities, B.C., and western Canada. In total, our regional expansion activities now under way include an estimated incremental 1,350 direct construction and inspection jobs over the next three years and close to two million person-hours of work, with additional jobs related to the many engineering, design, procurement, trucking, and logistics services that are required during an expansion of this scale.
The multiplier effect of these incremental jobs, in addition to the $1.5 billion in capital investment, extends right across Canada and ultimately North America. For example, we're also sourcing equipment from across the continent—pumps from Ontario, process control systems and valves from Alberta, and structural steel from Quebec. All this equipment comes together in collaboration with resources from northeast B.C., along with state-of-the-art engineering, transportation logistics, and millions of dollars in road and bridge upgrades along the way--and this is just Spectra Energy's contribution.
British Columbia’s natural gas industry royalty revenues totalled $406 million in 2010, and the property taxes that Spectra Energy paid, $60 million, made a significant contribution to the provincial economy. Our industry also invests in local communities across B.C. in the form of money and time. In 2010 our employees donated more than 700 hours to volunteer projects in B.C., and annual charitable contributions in the west were nearly a million dollars.
We believe that robust natural gas supplies will provide energy security for Canada and our U.S. neighbours, and natural gas will continue to underpin local, provincial, regional, and federal economies well into the future.
That covers two of the three “E”s in our continental energy equation. The third “E”–our environment–is also a natural fit for natural gas. With a carbon profile that is 45% cleaner than that of coal and 30% cleaner than that of oil, natural gas is available right here and right now to fuel our environmental objectives. Our U.S. neighbours are recognizing this. During his State of the Union address to Congress last month, United States President Barack Obama voiced support for the role of natural gas in a forward-looking clean energy policy.
Alternative sources of energy are essential, and an important part of the overall energy mix, but the reality is that natural gas will continue to provide a significant share of energy for generations to come, and will provide backup to renewables when the wind doesn’t blow and the sun doesn’t shine. In Ontario, natural gas is displacing coal-fired electric generation and delivering immediate emission reductions. Spectra Energy is transporting this natural gas through our Union Gas subsidiary, a company serving 1.3 million customers in Ontario’s energy market, and in the maritime provinces, Nova Scotia and New Brunswick are exploring opportunities to further diversify their energy portfolio with increased utilization of clean-burning natural gas and renewables.
Beyond near-term emissions reductions that can be achieved, the economic benefits associated with greater utilization of natural gas are essential to the host communities that are benefiting from today’s natural gas technology and development boom. We must take advantage of the fuel before us today: a clean, domestic, abundant, efficient, and versatile fuel. This important step will set the stage for economic benefits at the local, regional, and national level.
As Spectra Energy undertakes the large natural gas infrastructure investments across Canada to take advantage of today’s cleanest conventional fuel and support our energy security, environmental, and economic objectives, we offer the committee the recommendations that follow.
First, continue to recognize and support the energy industry’s role in providing essential services to Canadians and stimulating economic growth. Amidst a significant worldwide economic downturn, Spectra Energy added jobs. Our contributions to economic growth can be bolstered by continuing to provide a competitive tax environment; support for infrastructure, research, and development as our industry expands; and a harmonized, efficient, and stable national and North American regulatory environment.
Second, build homegrown demand for natural gas and diversify access to our resources through offshore markets. With more than 100 years of domestic natural gas supply, commodity prices are also expected to remain modest for the foreseeable future. If Canada is unable to build domestic demand for natural gas use and develop offshore market outlets, it will impede the growth of exploration and production across Canada, a major source of revenue and economic benefits for regions across the country.
Third, ramp up efforts that support investments under way in Canada’s natural gas infrastructure. Spectra Energy strongly supports the positive direction taken by the National Energy Board to encourage and attract investment in key energy infrastructure in Canada. Initiatives to encourage regulatory efficiency bode well for long-term investment in our sector.
Fourth, continue to recognize the role that Canadian natural gas resources play in North American energy security. A clear national energy strategy would be helpful to support growth in the energy sector and regional advantages.
I'd like to thank you for the opportunity to speak today. I hope these remarks and our brief are helpful to your deliberations and I look forward to your questions.