Alberta to House $11.5B Low-Carbon Complex
On November 28, Michigan-based material science company, Dow Inc., made a groundbreaking announcement. After two years of planning, Dow has decided to move ahead with the construction of the world’s first net zero Scope 1 and 2 emissions ethylene cracker and derivatives complex in Fort Saskatchewan, Alberta.
Federal officials say the total investment of the project will be more than $11.5 billion—which includes $8.9 billion from Dow and additional federal and provincial incentives—and expect it to create up to 7,000 jobs at peak construction, and between 400 - 500 full time jobs once the facility is up and running.
The facility will convert the site’s cracker off-gas into hydrogen, which can be used as a clean fuel in the ethylene production process. In addition, carbon dioxide emissions will be captured for off-site storage, reducing existing emissions by 1 Mt CO2e annually, and abating emissions from the facility’s new capacity.
In a release, Dow said it selected the Fort Saskatchewan site for the project due to the access to existing CO2 transportation and storage infrastructure with available capacity to fully support decarbonization of the project.
Alberta also has readily available, highly cost-competitive natural gas, and cost-advantaged ethane, a key feedstock for ethylene production.
The announcement from Dow comes months after the implementation of the federal government’s new Investment Tax Credit program (ITC), and will be the first project to take advantage of the new incentives.
During the initial announcement of the project in 2021, Dow CEO Jim Fittering noted that Alberta was an attractive destination for the project due to its status as a “first-mover” on carbon capture technology.
Canada has lofty net zero ambitions, and federal and provincial governments have been investing in the green transition. Now those investments are paying dividends (to the tune of $11.5 billion).
Alberta is Becoming a Global Destination for Low-Carbon Projects
In June 2020, the Alberta Carbon Trunk Line (ACTL) became operational. It’s the world’s newest large-scale integrated carbon capture, utilization, and storage system. The ACTL delivers captured emissions to mature oil and gas reservoirs in Central Alberta for use in enhanced oil recovery and permanent storage. At full capacity, it can transport up to 14.6 million tonnes of CO2 per year, which represents approximately 20 per cent of all current oil sands emissions, equivalent to the CO2 from more than 2.6 million cars in Alberta.
Just south of Dow’s new project in Fort Saskatchewan, the newly established Hydrogen HUB in Edmonton is expected to accelerate the development of hydrogen-based technologies, putting the city on the map as a global supplier of clean, low-cost hydrogen. The hydrogen market is expected to be a $2.5 trillion per year market by 2050, and could be the future of the energy industry in Alberta. Currently the HUB has plans for more than 25 projects related to the production, transportation and end use of hydrogen, and carbon capture and storage, which will fuel job creation, international investments, and economic opportunities in the province.
These early investments represent an enormous economic opportunity, and have helped establish Alberta as a global competitor and a go-to destination for low-carbon projects. Perhaps most importantly, Alberta’s recent success in attracting multi-billion dollar projects could serve as a blueprint for regions across the country to sustain net zero economic growth.
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