As the oil industry is facing more layoffs and oil prices remain low, the Alberta government is looking toward other energy investments.
On Oct. 6, the government announced a plan to revive Alberta’s natural gas sector – a sector that has struggled in the past, but which Associate Minister of Natural Gas and Electricity Dale Nally said has a huge potential for growth.
“We have big plans for the natural gas sector, which we believe will help position Alberta as a post-pandemic powerhouse for responsible energy production,” said Nally, who is the MLA for Morinville-St. Albert, in a press conference. Nally has been working to stabilize Alberta's natural gas market for more than a year, bringing in changes he's said helped save thousands of jobs.
The government is looking at five areas for growth: hydrogen, petrochemical manufacturing, liquefied natural gas (LNG), plastics and industrial demand.
Nally cited figures that predict hydrogen has the potential to be a $2.5-trillion industry by 2050.
Premier Jason Kenney said Alberta has some of the “least expensive and lowest-emitting hydrogen in the world.”
“As an energy source, hydrogen produces zero emissions and has greater potential to power not just appliances, but also heavy-duty transportation, heating and electricity generation,” Kenney said.
Nancy Southern, chair and CEO of ATCO Ltd., said there are some other challenges in creating the hydrogen industry in Alberta. Some of those challenges include the initial cost of creating large commercial-scale carbon capture technology.
“I think the big challenge for us is we do have to crack the carbon capture nut on a commercial level. We’re very, very close,” she said.
Southern thinks it will be around five years before they see full-scale commercial growth in the industry.
Other aspects of the plan include becoming a global top ten producer of petrochemicals, growing the access of LNG to global markets and creating a circular economy for plastics.
A circular economy for plastics would see single-use plastics reused in new products through “enhanced recycling techniques and technologies.”
“Put simply, that means enhanced recycling practices using the latest technology to allow our petrochemical industry to fully utilize plastics through multiple life cycles and ways that cut down on plastic waste,” Nally said.
In the past, the petrochemical industry has not seen great numbers and natural gas was selling at negative prices. Kenney blamed those prices on pipeline capacity.
“On a good day, we were getting 30 cents for natural gas,” said Kenney. “There was a glut in the market because we don’t have enough pipeline capacity and that was creating a real price crisis.”
Last week's announcement follows an announcement Nally made in July for a natural gas industry incentive plan.
That incentive plan would see companies getting grant money for projects that are already built and operational. Nally doesn’t yet have details on how the program will work.
“We just came out with the broad framework of that program because we wanted to build it in conjunction with industry. We consulted with industry specialists, we consulted with petrochem facilities to find out what they were looking for and in terms of what that secret sauce is, so, we’re just putting that together now,” explained Nally.
“We’re going to be releasing those technical details in the coming weeks, so you’re going to see that very shortly.”
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