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Labour Leader Sees B.C. LNG Driving Alberta Petrochemical Boom

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A new modelling study is pointing to liquefied natural gas (LNG) in British Columbia as a potential boon to Alberta’s petrochemical industry, with the potential to deliver jobs to hundreds of thousands of Albertans hungry for work.

While the recently-approved LNG Canada megaproject [1] is “obviously good news” for B.C. natural gas producers, the “untold story” is that the project could allow Alberta’s petrochemical industry to “literally double its output” by 2038, and thereby “open the door for unprecedented economic diversification” in the province, said report co-author Gil McGowan, president of the Alberta Federation of Labour and co-chair of Alberta’s energy diversification advisory committee.

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That surge in production would owe to the fact that, in the coastal LNG industry, Alberta’s petrochemical producers would finally find “a home for the methane,” McGowan told CBC. Until now, they’ve been constrained by the fact that the natural gas liquids used in petrochemical production, mostly ethane and propane, “constitute only about 8% of what comes out of the ground when you drill for natural gas.” That meant leaving the rest, mostly methane, as a waste product which had literally nowhere to go.

LNG Canada “provides exactly the kind of outlet we need,” he said.

Currently a C$20-billion-per-year industry, McGowan said Alberta’s petrochemical sector could hit the $40-billion mark by 2038, while supplying “the full range of jobs that have driven our economy forward”—from engineers and project managers, to jobs in construction, operations, and sales.

To push the province’s petrochemical ahead, McGowan urged policy-makers to “make equity investments, to the tune of about 10%,” to help finance up-front capital costs, adding that both Canadian and foreign-owned petrochemical companies “are literally lining up for the opportunity to invest in Alberta”. If government buy-in were assured, he added, the modelling showed private firms investing $60 to $100 billion over a 20-year span.