Break­ing Ground

Low la­bor costs and cheap feed­stock have re­newed in­ter­est in Al­berta’s In­dus­trial Heart­land

Alberta Oil - - OBSERVER -

FOR YEARS, THE NO­TION OF RAPIDLY ex­pand­ing Al­berta’s In­dus­trial Heart­land sat on the back­burner. A com­bi­na­tion of high oil prices, high costs for la­bor and soar­ing de­mand for nat­u­ral gas liq­uids in Asian mar­kets cre­ated un­fa­vor­able con­di­tions for the con­struc­tion of so-called “value-add” fa­cil­i­ties on do­mes­tic turf. As an ex­am­ple, Im­pe­rial Oil’s re­fin­ery in the Strath­cona re­gion (pic­tured), which pro­duces a wide range of prod­ucts, was built over 40 years ago. But with prices for feed­stock ex­pected to re­main low for the fore­see­able fu­ture, there is a height­ened in­cen­tive to cre­ate more fin­ished prod­ucts north of Ed­mon­ton.

That al­lure was bol­stered in Fe­bru­ary when the Al­berta govern­ment an­nounced a $500mil­lion in­cen­tives pro­gram for the con­struc­tion of petro­chem­i­cal plants, which would pre­sum­ably be lo­cated in the In­dus­trial Heart­land.

It re­mains to be seen whether the pro­gram will lure in would-be plant oper­a­tors – not to men­tion whether it will prove coun­ter­in­tu­itive to the govern­ment’s in­ten­tions be­hind its car­bon tax if th­ese plants aren’t low car­bon.

Power plants are part of the In­dus­trial Heart­land’s build out. ATCO Power aims to build the 90 MW Strath­cona Cogen­er­a­tion heat and power plant for a propane de­hy­dro­gena­tion fa­cil­ity. The power plant will be gas-fired.

ATCO Power also pro­poses to build a 400 MW gas-fired power plant in nearby Strath­cona County. Al­berta cur­rently gets most of its power from coal and nat­u­ral gas. ATCO Power says that, with the power de­mand fore­cast to in­crease by more than 50 per­cent by 2022, Al­berta will need to build 7,000 MW of in­stalled power ca­pac­ity over the next 10 years. Al­berta cur­rently uses a peak of 10,600 MW to power homes, busi­nesses and in­sti­tu­tions across the prov­ince.

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