Alberta Considers $5-Billion Petrochemical Deal with Saudi Investor
After years of insisting that tar sands/oil sands bitumen is ethically superior to petroleum from countries like Saudi Arabia, the Jason Kenney government in Alberta has decided it likes the desert kingdom just fine as a possible source of investment for a new C$5-billion petrochemical plant.
Kenney “has long been critical of Saudi Arabia, repeatedly calling it an unfriendly dictatorship with a state-owned energy company that has no right to dump its oil on North America,” the Globe and Mail reports. But the country has a thriving petrochemical industry, that industry is “looking at other jurisdictions” in which to expand, Associate Minister of Gas and Electricity Dale Nally told the Globe, “and one of those jurisdictions is Alberta.”
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Nally explained his government’s dizzying pivot by asserting that “a state-owned company producing oil in a Middle East dictatorship is far different from a company from the Middle East that comes to Alberta and adheres to our environmental regulations and adheres to our rule of law and treats everybody equally.”
Nally wouldn’t name the company involved in the negotiations, but his office told the Globe it isn’t a state-owned entity. “He also would not specify where the facility could be built,” the paper adds, “but said it would be worth between $5 and $10 billion and would take more than five years to build.”
Alberta is also introducing a new subsidy program to draw petrochemical investors to the province, the Globe and Bloomberg News report. Bloomberg says the incentive is a form of pushback against the federal government’s decision to move ahead with its plan to ban some single-use plastics in 2021.
“We’re disappointed by the federal government’s decision,” Nally told the news agency. “If COVID-19 has taught us anything, it’s that plastic has a role in keeping us safe.”
“The program is open to small, medium, and large petrochemical projects and will see companies receive grants worth 12% of their eligible capital costs once their facilities are up and running,” the Globe writes. Applicants with projects worth $50 to $150 million will be able to apply over a five-year span, while larger ventures like the Saudi deal will get a 10-year window.
The program “will also be available for new hydrogen production facilities that incorporate carbon capture into their design to reduce greenhouse gas emissions,” the Globe adds. But by the time Alberta unveiled its natural gas plan last month, there were already concerns that the baked-in reliance on fossil fuels would make Alberta hydrogen more expensive than the “green” equivalent derived from renewable electricity within a decade.