By Chris Brown

Emerging opportunities

Province reveals Natural Gas Vision and Strategy

Oct 6, 2020 | 1:38 PM

Alberta Premier Jason Kenney says the province’s newest plan to help the energy sector rebound will meet growing global demands for clean and sustainable energy by building on Alberta’s success in natural gas.

The Natural Gas Vision and Strategy was announced today, a strategy the government says will seize on emerging opportunities for clean hydrogen, petrochemical manufacturing, liquefied natural gas (LNG) and plastics recycling.

“Alberta is ready to lead in safe, clean and reliable energy today and into the future,” said Kenney. “This is a key part of Alberta’s Recovery Plan, designed to build, to diversify, and to create tens of thousands of jobs.”

The province says natural gas is expected to pass coal as the world’s second-largest energy source by 2040. It also has many other uses, including being the foundation for creating hydrogen. Alberta is already a leader in hydrogen production and has strong carbon capture and storage infrastructure in place.

Dale Nally, associate minister of natural gas and electricity, says the abundance of natural gas in the province has it well-positioned to be a “post-pandemic powerhouse for responsible energy production.”

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“To be sure, the uses and benefits of natural gas have not diminished. In the decades to come, we will still rely on natural gas to heat our homes and serve as a reliable energy source for electricity and industrial uses,” Nally said. “But natural gas also has huge potential for other uses, potential that has yet to be tapped.”

Nally pointed to five broad areas – hydrogen, petrochemical, liquefied natural gas (LNG), plastics recycling and industrial demand – they believe provides a bright future for Alberta.

“Each of these sectors provides a new or expanding set of opportunities for industry, for consumers around the world and most importantly for Albertans,” he said.

Nally added it will be in the hands of industry to make big parts of the vision a reality.

The vision and strategy builds upon the 2018 Roadmap to Recovery report from the previous NDP government.

The premier said that the price of gas last year was as low as 30 cents per gigajoule and now has risen to closer to $1.40

Kenney said the energy sector has been and will continue to be central to our economy.

“It is our single greatest source of employment, of opportunity, of wealth, of taxes. And while there are challenges, it also has a very bright future.”

He also highlighted the benefits of natural gas to fighting climate change.

“I’ve said this to Prime Minister Trudeau and I will continue to say it. There is no greater thing Canada could do to reduce global greenhouse gas emissions than to get our LNG to countries like China and India,” the premier said. “This is Canada’s big play when it comes to the climate challenge and we must move forward on it energetically.”

Natural Gas Vision and Strategy

The actions listed in the strategy will support the government’s vision to revive Alberta’s natural gas sector and become the No. 1 supplier of clean, secure, responsibly sourced natural gas in Canada and internationally. It highlights five areas with huge growth potential in Alberta:

Hydrogen

• Goal: Exports of hydrogen and hydrogen products across Canada, North America and globally are in place by 2040.
• The Hydrogen Council, a global advisory council of corporate executives, estimates that by 2050, the global hydrogen sector could generate US$2.5 trillion per year and create 30 million jobs.
• Hydrogen as a fuel source produces only water with no carbon emissions, and has the potential to become a major part of meeting carbon reduction targets worldwide.
• Alberta has the potential to be one of the lowest cost hydrogen producers on the planet.
• Hydrogen production will support continued and growing employment of highly skilled energy workers, create jobs and support innovation across the province.

Petrochemical Manufacturing

• Goal: Alberta becomes a global top 10 producer of petrochemicals and diversifies the portfolio of products manufactured.
• According to Alberta’s Industrial Heartland Association, there is an opportunity to grow Alberta’s petrochemical sector by more than $30 billion by 2030, resulting in more than 90,000 direct and indirect jobs and more than $10 billion in revenue for the Government of Alberta from corporate and personal income taxes.
• Alberta has one of the most established petrochemical manufacturing centres in Canada with room for growth in Alberta’s Industrial Heartland, Grande Prairie, Joffre and Medicine Hat.
• The Alberta Petrochemical Incentive Program, which will open to applications this fall, is already drawing investment attention into the province’s petrochemical sector.
• Alberta’s robust carbon capture and storage infrastructure will also allow petrochemical producers to create valuable products while simultaneously lessening their environmental impacts.

Liquefied Natural Gas (LNG)

• Goal: Alberta natural gas has access to Asian and European markets through two to three additional large-scale LNG projects by 2030.
• According to the International Energy Agency, global demand for natural gas is projected to increase by 36 per cent over 2018 levels by 2040.
• The LNG Canada project currently under construction will provide enough energy to displace 20 to 40 coal-fired power plants in Asia, reducing global GHG emissions by 60 million to 90 million tonnes of carbon dioxide each year.
• Canada is among the world’s top five natural gas producers, and more than two-thirds of Canada’s production comes from Alberta.
• Growing access to global markets will help create jobs and generate billions of dollars in revenues to support programs and services across our province and Canada.

Plastics Circular Economy

• Goal: Alberta is established as the Western North America centre of excellence for plastics recycling by 2030.
• A “circular economy” is a concept gaining acceptance within the plastics and recycling industries, in which plastic waste is reused in new products through enhanced recycling techniques and technologies.
• About 95 per cent of plastic packaging – valued at C$100 billion to C$150 billion – is disposed of after a single use, meaning there is a significant opportunity for plastics producers to recapture that value.
• A study by Deloitte and Cheminfo Services Inc. suggested that major changes to recycling in Canada could see 90 per cent of plastics avoid landfills by 2030.
• Alberta is well-positioned to implement a circular economy for plastics thanks to our petrochemical manufacturing industry, lower transportation costs and the development of enhanced recycling technologies within the province.
• The government has already initiated work on developing a plastics economy in the province by being a member of the Plastics Alliance of Alberta.

Industrial Demand

• Goal: Alberta demand for natural gas and natural gas liquids grows with increased investment in natural gas processing infrastructure. Adding more natural gas transportation infrastructure happens faster, encouraging industry performance and growth.
• Alberta’s oil sands are a large consumer of natural gas. Natural gas production also supplies condensate/diluent to the oil sands and is a primary input for natural gas in-situ projects, which represented 50 per cent of bitumen production in 2019.
• As oil sands production increases, so will its natural gas consumption to support oil sands processing activities.
• A number of power-generation facilities in the province are also looking to convert to natural gas as a fuel source, increasing demand for natural gas as industrial electricity demand also climbs.