The Alberta government recently announced that they were giving a private company $32.5 million in tax dollars to help the company expand their ethylene production facility.
Dow Canada made public over a year ago their plans to triple the ethylene production capacity at their plant. The government reported that the expansion cost $300 million and resulted in employing over 2,000 construction workers.
Ethylene is used in the production of fabricated plastics and antifreeze; the making of some fibres; and the manufacturing of ethylene oxide, and polyethylene for plastics, alcohol, mustard gas, and other organics.
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Both Dow and the provincial government claim that the expansion has resulted in not only one of the world’s largest ethylene production facilities but also the first net-zero ethylene production facility.
But there’s something to realize about this claim.
Ethylene production starts with natural gas, which goes through a separation process to isolate ethane gas, generally the second most abundant component of natural gas. The rest of the natural gas goes on to generate power and steam, which is then used in what’s called the cracking process, which converts the ethane into ethylene.
The cracking process results in two main byproducts: hydrogen and carbon dioxide. The hydrogen is reused in the cracking process, and the carbon dioxide, under the new expanded facility, will be captured and then stored offsite.
So, when it comes to net-zero, it’s not that the plant is producing zero emissions, it’s that zero emissions that they do produce end up in the atmosphere—at least theoretically speaking—because they capture them before they get a chance to then burying them in the ground.
Also, keep in mind that claims of net zero apply only to the point of production. It doesn’t include any emissions generated in the extraction, distribution, or storage of natural gas that is used in the ethylene production process.
The provincial government’s grant of $32.5 million will come from its Alberta Petrochemical Incentive Program.
And if you want to know why the government is so eager to get involved in the project, check out this quote from their media release:
Expanding Dow’s existing furnace systems will allow for an additional 130,000 tonnes of ethylene production per year and help increase demand for natural gas.
That last part is key.
Since increasing the production capacity of this plant will increase the need for more heat in power and steam generation, there will be an increased demand for natural gas. And since the natural gas supply in Alberta is managed by private companies, this means more revenue—and subsequently more profit—for them.
And the UCP government really loves the natural gas companies in Alberta.
Take ATCO, for example. Their president and CEO, Nancy Southern, donated nearly $30,000 to the PC party between 2008 and 2016. She also donated $21,262.75 to Jason Kenney’s PC leadership campaign in 2017.
Her mother, Margaret, was also a prolific donor, having donated over $35,000 to the PC party and the UCP between 2007 and 2022. She also donated $490 to Prentice’s 2014 PC leadership campaign, $8,500 to Kenney’s 2017 PC leadership campaign, $1,000 to Brian Jean’s 2017 UCP leadership bid and $2,500 to Kenney’s 2017 UCP leadership bid. Finally, she donated $10,000 in 2019 to the Alberta Victory Fund PAC, which was set up to support the UCP, as well as $5,000 to the Alberta Advantage Fund and $10,000 to the AAFund, which appears to be the same thing, both in 2017.