Heartland central to diversifying the economy
Industrial region offers an antidote to ‘doom and gloom’ jobs outlook
The Industrial Heartland region northeast of Edmonton has the potential to capture $27.5 billion of new capital investment, over and above the $15 billion in projects already under construction or pending, a business and government audience heard Thursday.
Canada’s largest hydrocarbon processing region could support two new methanol facilities, a new fertilizer plant, an ethane cracker, three partial upgraders, two smallscale gas-to-liquids plants, two propylene facilities and a second phase for the Sturgeon Refinery, said Neil Shelly, executive director of Alberta’s Industrial Heartland Association.
“This isn’t going to replace our daddy’s business of oil and gas in Alberta, but it will definitely go a long way to help supplement, and get us over, the gap we’re in now with low commodity prices,” Shelly told 600 people at the association’s annual stakeholder luncheon, held at the Expo Centre.
If all the possible projects materialized, they would generate 24,000 construction jobs, up to 10,000 permanent operating positions, a $6.2-billion increase to Alberta’s gross domestic product, $630 million in new corporate taxes and a further $1 billion in new federal taxes, Shelly said.
Despite the economic downturn tied to dramatically lower oil prices, the Heartland region isn’t all “gloom and doom,” Fort Saskatchewan Mayor Gale Katchur told the audience.
Shelly said that’s in part due to lower operating, capital and feedstock costs. “And we have a government — and we think we have a populace as well — that is now motivated to stimulating the economy, diversifying it and getting investment going in Alberta,” he added.
“There is a real opportunity to help revitalize Alberta’s economy by building upon our energy strengths, but looking at it beyond just commodity products and into finished and other value-added products.”
Deron Bilous, Alberta’s minister of economic development and trade, said the NDP government will support more development and diversification in the region. He said he sees “strong opportunity” for expansion in the petrochemical industry.
Officials with six companies gave updates on their existing and planned operations.
Doug Bertsch, vice-president of regulatory and stakeholder affairs with the North West Redwater Partnership, updated progress on the first phase of the partnership’s Sturgeon Refinery.
“It’s starting to look like a refinery,” he said. “The skyline is changing ... that’s what $8.5-billion looks like.” The refinery, which will convert bitumen into ultra-low sulphur diesel fuel, is on track to start operating commercially in the fourth quarter of 2017, Bertsch said.
Vanessa Wilson, general manager of off-gas business for Williams Energy Canada, said Williams remains “poised” to build a plant in the region to convert propane to propylene. Williams has signed an agreement with another firm that would convert the propylene into polypropylene, a recyclable plastic used in consumer and industrial products.
Williams officials have said they will make a final investment decision later this year. The company is looking for help from the Alberta government in the form of an incentive program.
Shelly said the Heartland association plans to revise an earlier study which looked at the region’s competitiveness with other petrochemical clusters around the world. The original study, produced a couple of years ago, will be updated to reflect “the new normal,” he said.
“Things have changed a lot in Alberta and we think we could be even more competitive now, with lower operating costs, the lower Canadian dollar, capital costs coming down. We think it’s a really good news story with cheap feedstocks, lower costs, and hopefully a government that’s motivated to help get these things going.”
The association plans to deliver the updated information to the Alberta government, and take it to Asia in the spring, when a delegation from the association and its industries visits Korea, China, Japan and Taiwan to talk to potential investors.