Battle over plastics simmers as Alberta looks to diversify its economy
For the provincial government and the petrochemical industry, plastic production is a beacon of hope for the future of Alberta’s natural resources industry. For environmentalists, it represents a threat to the planet.
Last year, the industry got a boost via royalty credits from the Alberta NDP’s Petrochemical Diversification Program — a program the United Conservative government has said it will carry forward.
Alberta currently has three petrochemical plants in operation — one each in Fort Saskatchewan, Joffre and Scotford — with another two on the way.
Prime Minister Justin Trudeau has set the stage for a plastics battle ahead of the upcoming federal election campaign by promising to ban “harmful” single-use plastics, such as straws and cutlery, as early as 2021.
His rival, Conservative Party of Canada Leader Andrew Scheer, has mocked the plan, calling it a “cynical re-election gimmick” that will do little to reduce plastic waste.
As the debate over the implications of plastic use at the consumer level shifts to its production, Alberta’s natural resources industry finds itself in the familiar position of straddling business and environmental concerns.
Are plastics the new pipelines?While most criticism of Alberta’s fossil fuel industry has been focused on pipelines, environmentalist campaigns against plastics have capitalized on powerful images of the Great Pacific Garbage Patch, a plastic straw being extracted from a sea turtle’s nostril and snowing microplastics, among others.
Rather than taking advantage of the durability of plastic, a substance that doesn’t biodegrade, Vito Buonsante, Environmental Defence plastics program manager, says corporations have fueled a throwaway culture.
“It doesn’t really make sense to have a chocolate bar that is wrapped in plastic and then that plastic is going to stay around for the next 300 years while that chocolate bar hardly stays around for a minute,” Buonsante told AB Today in an interview.
Cheap feedstock, which in Alberta consists of readily available, low-cost natural gas liquids, means it is easier to make new plastic than it is to recycle it. (Recycling plastic is two-and-a-half times more expensive per tonne than hauling it to the landfill.)
Part of the solution, Buonsante says, is to shift the cost burden of recycling programs from municipalities to industry, characterizing the current system as akin to an industry subsidy.
“We have given them a free ride for many years,” Buonsante said. “They have been designing products only for their own purpose, which is selling the product. But not for the purpose of properly disposing of products.” (Buonsante also wants the landfilling of plastics to be banned.)
British Columbia’s recycling program is funded entirely through industry, and Ontario recently announced plans to follow suit by 2022.
Jurisdictions like Norway have gone even further by fining companies that fail to meet plastics recovery quotas and charging deposits on plastic bottles — something large beverage producers have lobbied against in Canada.
Plastics industry agrees change is needed
Bob Masterson, president CEO of the Chemistry Industry Association of Canada, an organization that represents the plastics industry, recognizes multiplying amounts of plastic waste on the globe are a problem that needs fixing and agrees industry should take over the cost of recycling in Alberta.
“They see a risk to their business case,” Masterson said told AB Today. “They see the public on the verge of deselecting plastics if we don’t address this plastic waste issue.”
In the United States, plastic production has taken off. The industry received $300 billion in investment in 300 new projects over the last five years.
Canada was largely left out of that growth because Canadian jurisdictions did not court industry as aggressively as their American counterparts, according to Masterson. He said Pennsylvania spent seven years courting Shell Oil Company before the oil and gas giant chose the state for its massive Shell Pennsylvania Petrochemicals Complex, which is set to be completed next year. (U.S. President Donald Trump visited the facility in August and told workers they are “sitting on gold,” a reference to the state’s booming natural gas industry.)
Masterson says Trudeau’s proposed plastics ban won’t hurt the industry short-term — although he shuns the characterization of plastic products as “single use” — because 80 per cent of Alberta-made products are exported to jurisdictions without a ban. (Canada exported $11.4 billion worth of manufactured plastic products in 2018, according to Statistics Canada.)
But, long-term, investors may be shook.
In a statement to AB Today, Samantha Peck, a spokesperson for Alberta Energy, agreed with Masterson, saying the province is not concerned about Trudeau’s proposed single-use plastics ban, since most of the demand for Alberta’s plastic products comes from outside Canada.
“The global demand for plastics continues to grow, and the petrochemicals produced in our province will still be required to make other multi-use items and recyclable plastics,” Peck said, noting that the petrochemical sector currently provides the bulk of Alberta’s manufacturing jobs.
“Our government will continue to fight for the jobs this industry provides and will continue to follow how developments on this federal initiative may impact Albertans,” Peck said.
Alberta’s industry on the upswingAlberta’s petrochemical industry started up in the 1970s, fed by a “high quality, high quantity” supply of natural gas liquids — such as ethane and propane — that can be extracted along with natural gas. But up until 18 months ago, Masterson says Alberta’s growth didn’t match the growing global demand.
This changed last fall when Rachel Notley’s former NDP government founded the Petrochemicals Diversification Program (PDP), which doles out royalty credits to companies looking to turn ethane, methane and propane into plastics, fabrics and other materials; as well as the Petrochemicals Feedstock Infrastructure Program, which provides grants and loan guarantees to companies that build facilities to supply natural gas liquids to the petrochemical industry.
Combined, the two programs have already begun funnelling billions of dollars into the industry.
While the UCP government’s first 100 days was dubbed the “summer of repeal,” the NDP-era PDP has thus far been spared from the chopping block.
Alberta politicians are not the only ones supporting the industry. Despite leading the charge on reducing plastics use, the Trudeau Liberals have also provided subsidies to the sector.
In April, Natural Resources Minister Amarjeet Sohi was in Sturgeon County to announce $49 million in federal funding for a new $4.5 billion polypropylene complex.
The site, run by the Canada Kuwait Petrochemical Corporation, will be the first polypropylene plant in Canada and is expected to bring 2,110 jobs to the province.
At the time, Sohi stressed that polypropylene is a “highly recyclable” and said using Alberta propane to manufacture, rather than exporting the propane to offshore markets, will reduce greenhouse gas emissions by 180,000 tonnes per year.
Federal Innovation Minister Navdeep Bains also pledged $49 million to Inter Pipeline’s $3.5-billion Heartland Petrochemical Complex in Strathcona County in March.