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Alberta covering capital costs of new petrochemical plants

By Bloomberg News   


Alberta will help cover the capital costs of new petrochemical plants, a move that pushes back against the federal government’s efforts to cut the use of plastic.

Once a plant is built and running, companies can apply for grants worth 12 per cent of capital costs, according to a statement by the provincial government. The program aims to attract tens of billions of dollars in new investment to the petrochemical industry in an attempt to diversify the Alberta economy away from oil and gas, it said.

The push for a bigger petrochemical sector is potentially at odds with an effort by Justin Trudeau’s government to reduce plastic consumption, including the phasing out of single-use items such as plastic straws and plates.

“We’re disappointed by the federal government’s decision,” Dale Nally, Alberta’s associate minister of natural gas and electricity, said in a phone interview. “If COVID-19 has taught us anything, it’s that plastic has a role in keeping us safe.”


The downturn in energy demand has focused the Alberta government on diversifying away from raw oil and gas extraction. New investment in the province’s oil sands has dried up and the unemployment rate was 11.7 per cent in September.

Trudeau’s plastics ban joins governments in Europe, India and California that are motivated by concern about plastic waste filling the world’s oceans and killing wildlife. But reducing plastic use has been complicated by the pandemic, which brought plastics back into favor as manufacturers ramped up production of disposable gloves, masks, wipes, bottles of hand sanitizer and other safety items.

Alberta sees advanced, modern forms of recycling as the answer to plastic pollution, not bans, Nally said. The province’s vast reserves of natural gas and natural gas liquids make it a competitive place for petrochemical makers, but “incentives” are needed because competing jurisdictions on the U.S. Gulf Coast and elsewhere offer their own incentives to lure them, he said.

The Globe and Mail reported last Friday that the province is in talks with a Saudi Arabian company to build a new petrochemical facility.

(Bloomberg News)


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