Providing coverage of Alaska and northern Canada's oil and gas industry
October 2020

Vol. 25, No.42 Week of October 18, 2020

Trudeau upends Alberta

Alberta to expand petrochemicals; federal government to ban single-use plastics

Gary Park

for Petroleum News

In rolling out its long-promised natural gas strategy, the Alberta government included a significant strategy to expand its plastic and petrochemical industry by attracting what Premier Jason Kenney claimed would attract tens of billions of dollars of investment.

“We think this could be a real ace in the hole for Alberta’s future,” he said.

Less than 24 hours later the Canadian government of Prime Minister Justin Trudeau flattened that strategy by unveiling a plan Kenney suggested is aimed at tearing down the Alberta oil and gas sector. He said the result would be to cut off a major source of revenue that could ease the impact of a soaring federal debt.

The result is likely to be a feud between Canada and Alberta over an issue that boils down to straws, cutlery, stir sticks, grocery bags and takeout containers.

Single-use plastics to be labeled toxic

They are all part of Trudeau’s scheme to add “single-use” plastics to a list of toxic items under the Canadian Environmental Protection Act, a designation that follows a scientific assessment that determined plastics are harmful.

Trudeau would like Canadians to believe that his administration is taking bold steps on the global stage, but his Environment Minister Jonathan Wilkinson conceded his department had looked to Europe for inspiration in developing the plastic ban for implementation at the end of 2021.

“To be honest, we’re not leading the world on this,” he said, in a rare moment of political candor.

Alberta looked to petrochemical revenues

Having come to terms with the fact that Trudeau has no intention of helping a desperate oil and gas sector Alberta decided its petrochemical sector could generate C$30 billion in annual revenues by 2030, of which one-third would come from corporate and personal income taxes, and create more than 90,000 direct and indirect jobs.

In the process, Alberta hopes to use its proven strength in technological innovation and create a domestic plastic recycling system and become what Kenney believes could be a center for repurposing and recycling old plastic.

Bob Masterson, chief executive officer of the Chemical Industry Association of Canada, said Wilkinson’s strategy does contain some positive news by supporting more recycling investment and “building a circular economy for plastic.” However, he said the ban on specific items is arbitrary.

He asked why the Canadian government would “want to ban (items) that can and are being recycled,” noting that the Trudeau Liberals are also stimulating investment in companies that recycle the same materials it aims to ban.

“The inconsistency of that has to be seen as frustrating to businesses,” Masterson said, urging the federal government to concentrate more on national waste legislation.

He said it will not be easy for Alberta to attain its goal of joining the world’s top 10 petrochemical producers, “but it is doable.”

Wilkinson tried to downplay potential friction between the federal government and Alberta by noting that Alberta’s recovery plan puts a focus on plastic recycling.

Alberta focus on ‘full life cycle’ approach

Alberta Energy Minister Sonya Savage said her government’s focus is on a “full life cycle approach for plastics,” making a point that “we use plastics in every single thing we do, every minute of the day.”

She said the Kenney administration is prepared to fight if the federal plastics strategy infringes on the province’s constitutional responsibilities or economic recovery plan.

“One thing we know for sure is that we have a very robust petrochemical plan here in Alberta. It’s part of our natural gas strategy. It’s part of our need to recover as a province and create jobs and diversify our economy,” said Savage, leaving little doubt that Alberta is bracing for a battle.

Comments on the federal plan, outlined in a 20-page discussion paper, will be accepted until Dec. 9, meaning the next two months will indicate whether the two governments are headed for a showdown.

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