Articles related to the low carbon economy

Minister of Natural Resources challenges CIAC to write the chapter on energy value-added processing for Canada’s energy strategy

Speaking to the CIAC Board of Directors on October 17, in Ottawa, the Honourable Jim Carr, Minister of Natural Resources, challenged CIAC and its members to contribute to Canada’s energy strategy by submitting the chapter on energy value-added processing.

“I understand the important role of chemistry in supporting the Canada’s energy transition. I don’t need to be convinced,” said the Minister. “What I do need is for this industry to help inform others and to tell us what the government can do to support investment and innovation in Canada’s chemistry sector.”   

“You play a vital role in the Canadian economy and your industry has world leading environmental practices,” he told the room. “The world is hungry for our resources. When I go to India and China and Japan, the only thing they want to talk about is imported Canadian liquid natural gas.”

Minister Carr spoke to the CIAC Board on the heels of the Generation Energy dialogue he hosted in Winnipeg, Manitoba the week prior. Attended by nearly 800 Canadians, the forum involved challenging discussions on the pace of transition to a low carbon economy in Canada and the role of conventional energy sources during that transition. 

Speaking on behalf of CIAC member-companies, CIAC President and CEO Bob Masterson called on Minister Carr and his counterpart in Finance to be more engaged in the climate change policy and pricing discussions.

“Industry can accept that there is a need for an economic transformation to support Canada’s transition to a low carbon economy. What we can’t accept is that this transformation will be led by ministries of environment federally and provincially. To succeed, economically oriented departments such as finance, resources, and innovation are going to have to get much more engaged in the discussion if we’re to maintain competitiveness and attract investment opportunity,” Masterson said.  

Alberta’s energy diversification should focus on converting energy into manufactured products and adding value to natural gas

On March 20, CIAC President and CEO Bob Masterson, along with the Chairs of the Association’s National and Alberta Business & Economics committees – Mike Burt, Dow Chemical, and Corinne Dueck, MEGlobal – appeared before the Energy Diversification Advisory Committee in Edmonton to deliver recommendations on adding value to Alberta’s energy resources. 

CIAC agrees with the Alberta government’s long-term vision for economic diversification and believes that moving up the resource value chain with value-added resource processing is integral to achieving this goal. Specifically, CIAC believes the natural gas value chain is ripe for further investment given the abundance of liquids rich natural gas resources in the Western Canadian Sedimentary Basin.

Investment in value-added resource processing can also help smooth the boom and bust cycle of resource revenue to the province as the chemistry sector often runs countercyclical to the resource sector providing high paying jobs and needed investment when resource prices are low.

To help attract investment, CIAC is encouraged by the Alberta government's use of the Royalty system through the Petrochemicals Diversification Program. CIAC recommended that further support in the form of 100 per cent accelerated capital cost allowance at the federal and provincial levels as well as additional targeted support from all levels of government – federal, provincial, and municipal – be considered to overcome the investment advantages found in competing jurisdictions such as the U.S. Gulf Coast.

We encourage you to read CIAC’s full submission to the Energy Diversification Advisory Committee and to view the presentation given by Mr. Masterson. 

Canada needs more chemistry

Bold leadership is needed to attract and win new investments

The flurry of consultations by various departments over the past summer was a clear indication that the Government of Canada is focussing on low carbon, innovative, economic growth.

An effective innovation strategy should foster the development of products, services and industries that can best capitalize on the natural resources and talent that already exist in our country. The chemistry industry is well positioned to deliver on these expectations, if Canada can build and maintain a competitive, long-term investment environment.

Written off as a mature industry decades ago, North America’s chemistry industry has experienced a dramatic resurgence following the advent of abundant, low-carbon feedstock associated with the shale gas revolution. Today, more than 270 projects are being tracked totalling over $250 billion in new investments, with more than 600 additional investments in the downstream plastics sector. This makes chemistry the fastest growing manufacturing sector in North America and the poster child for reshoring manufacturing.

This new feedstock means chemistry facilities can operate with half the energy demand and half the greenhouse gas emissions compared to older facilities fuelled by crude oil. Moreover, compared to coal-fed chemistry processes in China, this abundant and advantageously priced feedstock provides a ten to one energy and greenhouse gas advantage – to make the same finished product. The economic and environmental advantages of shale gas feedstocks are so great that European chemistry operations are now being retrofitted to receive feedstocks imported from North America.

This rapid re-tooling and expansion is a testament to the industry’s commitment to innovation, to adopting cutting-edge technologies, and to the reduction of carbon emissions. Other factors reinforce this view.

It is not a widely appreciated that more than 95 per cent of all products manufactured today rely on chemistry. Addressing the challenges of clean energy, air and water, and a sufficient supply of safe and nutritious food on a global scale is entirely dependent on chemistry-based solutions. From improved building insulation to lighter plastics for automobiles, and the production of solar and wind energy equipment, innovative chemistry products and processes are essential in helping society meet its needs while reducing its carbon emissions.

While there have been some important investments in recent years in Ontario, and Alberta is poised to attract additional investments, Canada has not kept pace with growth in the U.S. Based on historical patterns, Canada should have attracted $25 billion of new investment. Instead, only about one tenth of that has found its way here.

The good news is Canada is at least making the short lists for companies considering North American investments. Canada has market and feedstock access and has taken some measures to improve the country’s fiscal competitiveness with the 10-year extension of the accelerated capital cost allowance and lowering corporate tax rates. But, more is needed to create the winning conditions for investments. In the end, it is a winner takes all game.

By recognizing opportunities, partnering closely with the provinces and working to further strengthen the country’s investment climate, Canada can position itself as a destination of choice for sustainable investments.