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Energy megaprojects typically require several years to construct and entail substantial costs. Those costs, in the form of employment, capital equipment and material inputs, are sometimes viewed as benefits. Moreover, the expenditures on these inputs can induce further increases in employment and income. On the basis of these project specific and induced effects, government assistance is sometimes sought. This paper describes the very limiting circumstances under which government aid for that reason is justified. Those criteria are then applied to the Hibernia offshore oil development.

Multiplier Effects and Government Assistance to Energy Megaprojects: An Application to Hibernia