Alberta to diversify economy with big bet on hydrogen

Open this photo in gallery:

Alberta is betting big on hydrogen and plastics recycling in its new natural gas strategy, giving a nod to Canada’s broader environmental goals as it wrestles with how to resuscitate a flailing economy.

The strategy, set to be unveiled Tuesday, includes ambitious goals to establish Alberta as a western North America “centre of excellence for plastics diversion and recycling” by 2030, and exporting hydrogen and hydrogen-derived products across North America and the world by 2040. The province also wants to see two or three additional liquified natural gas megaprojects online by 2030 so it can export LNG to Asia and Europe, and become a global Top 10 producer of petrochemicals.

International governments are increasingly eyeing hydrogen as a clean fuel source as they pursue net-zero emission goals. Dale Nally, Alberta’s associate minister of natural gas, told The Globe and Mail that presents an “incredible opportunity” for the province.

“Hydrogen by 2050 is going to be a $3.5-trillion industry, and we want as big of a piece of that for Alberta as we possibly can," Mr. Nally said. “It’s not only jobs for Albertans – they’re clean energy jobs for Albertans, and it supports our goal of diversifying the economy.”

To pursue that goal, the province will develop a hydrogen roadmap by 2023, and try to align policies with British Columbia and Saskatchewan to accelerate the deployment of hydrogen in Western Canada. Alberta also wants its provincial interests woven into Ottawa’s own hydrogen strategy, set to be released in the fall – and if there’s federal money available for Alberta to pursue its hydrogen goals, Mr. Nally said, all the better.

“Oil and gas is going to continue to drive us into the future, but – big picture – hydrogen is going to be an important part of a diversified portfolio of energy,” he said.

Diversification is also behind the government’s drive to expand plastics recycling in the province, but Mr. Nally acknowledged the green message plays a part too.

“I have children, and I want to have clean water for them and clean air for them to breathe. That means taking care of our environment, and recycling plastics is great for the environment,” he said.

Mr. Nally doesn’t believe the world has a plastics problem – only a waste one – and argues the answer to the “Texas-sized glob of plastics that’s floating around the ocean” is recycling. It’s an area where Alberta can excel, he said, by using its petrochemical, research and innovation sectors.

Bob Masterson, president and chief executive of the Chemistry Industry Association of Canada, told The Globe the only way Alberta can become a credible, global player in plastics production is to take responsibility for the issue of waste.

Alberta exports 80 per cent of all the plastics it produces, he said, “so it owns this issue whether it wants to or not.”

“Therefore, if it wants to produce more plastics and plastics chemistries, it has a responsibility to work with us to address the issue of plastic waste,” Mr. Masterson said.

“It’s something society expects, worldwide.”

Alberta is pushing toward plastics recycling as the COVID-19 pandemic drives a price war between recycled and new plastics.

A recent Reuters investigation across five continents showed it’s a war recyclers worldwide are losing. That’s because nearly every piece of plastic begins life as a fossil fuel, but the economic slowdown has punctured demand for oil, in turn cutting the price of new plastic. It doesn’t help that China – which used to import more than half the world’s traded plastic waste – banned imports of most of it in 2018.

Recyclers worldwide told Reuters that since the coronavirus struck, their businesses have shrunk by more than 20 per cent in Europe, 50 per cent in parts of Asia and as much as 60 per cent in the United States. In fact, the U.S. has become one of the cheapest places to make virgin plastic, so more is coming onto the market.

Still, a joint study between Alberta municipalities, industry and the Canadian Stewardship Services Alliance (a business recycling lobby group) found that making producers responsible for end-of-life management of plastics and packaging could add millions of dollars to the economy each year.

With a report from Reuters

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.