Alberta's Natural Gas Vision and Strategy

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Bennett Jones LLPNew Energy Economy Series

The Government of Alberta is laying out its plans to diversify and grow the province’s energy industry. The goal is to position the sector for responsible energy development in a post-pandemic world. Major announcements have been made and there are more to come in the fall of 2020 and early 2021.

This is the first in Bennett Jones' New Energy Economy Series on the future of Canada's energy industry. We will look at key developments at the provincial and federal levels and what they mean for businesses and investors.

To start, we will look at the framework of Alberta's recently announced Natural Gas Vision and Strategy. In upcoming parts of the series we will address other aspects of Alberta's energy future, including:

  • Geothermal energy development
  • Carbon capture and storage (CCS)
  • Petrochemical manufacturing
  • Liquefied natural gas (LNG)

We previously wrote Hydrogen 101: Basics of Hydrogen Supply Chains on the fundamentals of a hydrogen economy and the strategies being developed by Alberta and the Canadian federal government. We also looked at national hydrogen strategies in Germany and the EU, Japan and South Korea and Australia.

Alberta's Natural Gas Vision and Strategy

The Government of Alberta’s support for its Natural Gas Vision and Strategy includes:

  • Advocating for natural gas development in Canada
  • Pursuing investment and improving competitiveness
  • Setting up world-class environmental frameworks
  • Enabling investment and involvement across the whole natural gas value chain

The Strategy highlights five sectors of the natural gas industry with great potential for growth. In each area, the government has set a goal for the future.

Petrochemical Manufacturing

Goal: Alberta becomes a global top 10 producer of petrochemicals and diversifies the portfolio of products manufactured.

Alberta has one of the most established petrochemical manufacturing centres in Canada with room for growth. Alberta’s Industrial Heartland Association says there is an opportunity to grow the province’s petrochemical sector by more than $30 billion by 2030.

The government says the Alberta Petrochemical Incentive Program will open to applications this fall, and is already drawing investment attention into the province’s petrochemical sector.

We previously wrote on the announcement of the Program in July 2020.

Hydrogen

Goal: Large-scale hydrogen production with carbon capture, utilization and storage (CCUS) and deployment in various commercial applications across the provincial economy by 2030. Exports of hydrogen and hydrogen-derived products to jurisdictions 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. Alberta has the potential to be one of the lowest cost hydrogen producers in the world.

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.

The LNG Canada project currently under construction will provide enough energy to displace 20 to 40 coal-fired power plants in Asia. Canada is among the world’s top five natural gas producers, and more than two-thirds of Canada’s production comes from 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.

Natural gas and natural gas liquids are fundamental inputs to Alberta’s electricity, oil sands and other industrial sectors. These sectors represent over half of Alberta’s domestic natural gas demand and are expected to grow.

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. The Alberta government has initiated work on developing a plastics economy in the province by being a member of the Plastics Alliance of Alberta.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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