Alberta ponies up petrochem grants
ALBERTA’S NEW DEMOCRATIC
government rose to power partly on a promise to diversify the provincial economy and create more “value-added” jobs in the energy sector. In February, the government laid out the plan. It would involve up to half a billion dollars in incentives for companies to build new petrochemical projects, and would be paid out from the province’s royalty credit system. The plan was to trigger between $3 billion and $5 billion in new chemical and plastics manufacturing using natural gas byproducts like methane and propane. Natural gas prices reached historic lows in early 2016, and pipeline bottlenecks in the Canadian Montney region were met with a wave of new interstate pipelines in the United States, further reducing the value of Canadian gas. Despite the benefits of low feedstock costs for manufacturers, investment in Alberta’s chemical industry—valued at $14 billion in annual sales, according to the province—has lagged behind powerhouse petrochemical regions like the U.S. Gulf Coast.