Provincial government envisions Alberta as major gas exporter, hydrogen energy hub

Within a decade, Alberta could have at least two large liquefied natural gas projects exporting energy, be a continental leader for plastics recycling and host large-scale hydrogen production facilities.

That's the vision outlined in the provincial government's new natural gas strategy, released on Tuesday.

It's a plan Premier Jason Kenney says has the potential to create tens of thousands of jobs, boost revenues for provincial coffers and most of it shouldn't cost taxpayers a dime.

"A lot of this is just government getting out of the way," Kenney said at a news conference. "Speeding up approvals. Creating investor certainty."

Associate Minister of Natural Gas and Electricity Dale Nally said when he first assumed the portfolio, it felt like being appointed "associate minister of the Titanic."

WATCH | Alberta banks on hydrogen exports:

Alberta banks on hydrogen exports

4 years ago

Duration 1:51

The Alberta government has announced an ambitious plan to use existing infrastructure to build a hydrogen export industry, but critics point out they're planning to use fossil fuels to make the hydrogen instead of trying to use renewable energy in the first place.

Nally saidthe fortunes of natural gas have improved, and he wants Alberta to be a "post-pandemic powerhouse" for the fuel's use.

Canada is the fourth-largest producer of natural gas in the world, and has enough deposits to last about 300 years, according to Natural Resources Canada. About two-thirds of the country's natural gas production happens in Alberta.

Alberta's natural gas plan wants to take advantage of Canada's shorter shipping times to Asia and Europe and envisions two to three "mega" liquefied natural gas plants in the province by 2030.

Alberta willalso position itself as western North America's epicentre for plastics diversion and recycling by 2030, the plan says.

In addition,the province shouldbe a leading supplier of "blue" hydrogen, which is generated from natural gas. The technology's lower environmental footprint depends on the successes of carbon capture and storage to prevent the release of greenhouse gases.

ATCO chair and CEO Nancy Southern said cracking the "carbon capture nut on a commercial level" is the major hurdle to Alberta scaling up the production of hydrogen that can be used as a clean energy source.

She said refining that process is about five to six years away.

Supplying Alberta industries with natural gas and diversifying the petrochemicals manufactured in the province are two other pillars of the plan.

In July, the United Conservative Party government announced a $1-billion grant program for companies expanding petrochemicals investments in Alberta. Details on the program are supposed to be released this fall.

More climate-friendly uses for natural gas

Producing hydrogen from natural gas creates the potential for zero-emissions cars, trucks, boats, trains and buses and is good for industrial processes that require high temperatures, said Maggie Hanna, a fellow with the Energy Futures Lab think tank.

Natural gas (methane) can be converted into hydrogen gas and carbon dioxide, ideally allowing the carbon dioxide to be captured and permanently stored in caverns deep underground.

Carbon capture has a much lower environmental footprint than thousands of vehicles burning hydrocarbons, Hannasaid.

Although some jurisdictions have banned single-use plastics, Bob Masterson, president and CEO of the Chemistry Industry Association of Canada, says plastic production is one of the fastest-growing industries on the planet.

Alberta is an ideal place to make plastics because manufacturers use natural gas, which is half as energy intensive as other methods, Masterson said.

The province could also drastically improve its plastics recycling approach by adopting a packaging levy similar to the one B.C. manufacturers pay, he said.

However, such an approach would mean handing over control of plastics recycling solely to industry, which may come into conflict with municipalities that have long-standing civic recycling programs.

Manufacturers must also respond to marketdemands forplastics with a higher recycled content, he said.

"I think the message here in the Alberta strategy is, over the long term, its ambitions for natural gas and chemicals development have to be reconciled with society's expectations for lower greenhouse gas emissions," he said.

But Keith Stewart, senior energy strategist with Greenpeace Canada, says the government's strategy is a missed opportunity. Instead of diversifying into increasingly cost-effective renewable energy sources, the provincial government is doubling down on oil and gas dependence, he said.

"Jason Kenney is basically saying, we're going to provide public subsidies to build new Blockbuster outfits and we're going to have shiny DVDs alongside the videocassettes," Stewart said. "The reality is, Netflix is on the way. You don't want to be buying new Blockbuster outlets at the time Netflix is moving in."