More layoffs are imminent in Alberta’s oil sector as Suncor plans to cut up to 2,000 jobs country-wide over the next year and a half and the Cenovus-Husky merger means a potential loss of another 2,000-odd jobs. The price of oil remains under $40 per barrel for West Texas Intermediate and under $30 for Western Canadian Select. The August fiscal update from the province projected a staggering $24.2-billion deficit for this year, up from a $6.2-billion deficit projected in February.
So the announcement from Morinville-St. Albert MLA Dale Nally last week that Alberta’s petrochemical program is “open for business” came as welcome news.
The government’s efforts to shore up its natural gas industry and build secondary industries on top of it, such as petrochemical and hydrogen, could prove to be an economic boon for the St. Albert area, particularly the Industrial Heartland which is well set up for such ventures. The petrochemical industry is set up for growth, according to a 2019 report from Deloitte, and the Heartland has seen investment from petrochemical companies such as Dow in the past year.
The petrochemical program is part of Alberta’s Natural Gas Vision and Strategy released in early October – a document Nally, who is the associate minister for natural gas and electricity, has described as a plan to help Alberta become a “post-pandemic powerhouse for responsible energy production.”
Unlike the oil industry, the natural gas industry has had good news recently: on Oct. 20, the Canadian government belatedly approved the NOVA Gas Transmission Ltd. expansion project, which had been delayed back in May for more consultation.
Nally told the Gazette this pipeline expansion means less constraints for companies looking to store or export natural gas – an essential part of the Natural Gas Vision and Strategy. He also expects it to create 5,500 construction jobs and $817 million in labour income.
Coupled with its plan to create a ‘circular economy’ where plastic waste sheds that label and becomes an input for secondary industry, the province is moving in a necessary direction by taking advantage of its natural resources. Diversification of our economy stands a much greater chance of success when it’s built on one of Alberta’s key primary industries.
Building a thriving natural gas industry to bolster hydrogen and petrochemicals comes with challenges, however. The federal government’s attention remains firmly centred on environmental initiatives, one of which is its upcoming single-use plastics ban. That will undoubtedly hurt Alberta’s ability to grow investment in petrochemicals, and Energy Minister Sonya Savage has already said the province is prepared for a fight with Ottawa if it comes down to it.
Speaking to the Calgary Chamber of Commerce on Monday, Alberta Premier Jason Kenney described the UCP government’s efforts to attract investment to Alberta as a plan with a sense of hope and a scale of ambition. The premier’s description holds true for the government’s efforts to stimulate the natural gas sector as a foundation for other lucrative industries. We still have a long way to go to climb out of the fiscal hole we currently find ourselves in but, this strategy at least will give us a good shot at recovery.
Editorials are the consensus view of the St. Albert Gazette’s editorial board.