More than half of Canada’s petrochemical capacity is located in Alberta, making the province a major supplier of petrochemical feedstock—the raw materials used for industrial processing. Annually producing more than $13.5 billion worth of products, Alberta’s chemical and petrochemical industry is the second largest manufacturing industry in the province. About half of Alberta’s chemical and petrochemical industry products are exported to markets around the globe.
Directly linked to the petrochemical industry, Alberta’s Industrial Heartland (AIH) is strategically situated in western Canada’s sedimentary-basin oil and gas reserves. Dow Chemical, in Fort Saskatchewan, operates the world’s second largest ethane based cracker.
The viability of the province’s current petrochemical industry is based on access to a long-term secure and economic supply of natural gas liquid (NGL) feedstock – especially ethane – and the ability to develop suitable competitively priced products for international markets.
Oil and Oil Sands
AIH is easily accessible to the province’s extensive oil sands. Alberta’s manufacturing industry benefits from an abundant, competitively priced supply of hydrocarbon feedstock. Much of Alberta’s feedstock is located in northern Alberta’s Athabasca Oil Sands in the Regional Municipality of Wood Buffalo. These deposits are one of the world’s largest known oil reserves.
The oil sands are estimated to contain 1.74 trillion barrels of bitumen in place. Of this amount, 174 billion barrels can be economically recovered with current technologies. In 2005, Alberta’s total crude bitumen production and upgraded synthetic crude oil accounted for 58% of Alberta’s (and 39% of Canada’s) total crude oil and equivalent production. Total Canadian crude oil production is estimated to approach 4 million barrels per day (b/d) by 2015, as it grows from 2.6 million b/d to 3.9 million b/d (Canadian Association of Petroleum Producers 2005-2015 Crude Oil Forecast).
The Alberta Hub provides a physical point of handling, storing, and exchanging primary energy products and upgrading them to higher value manufactured products. The hub’s network of pipelines and infrastructure transports up to 17 billion cubic feet/day of natural gas to domestic and United States markets. This vibrant market for natural gas buyers, sellers, and traders is an efficient trading point where participants benefit from having many buyers and sellers.
The Government of Alberta, Petrochemical Development Business, and other stakeholders promote Alberta as the hub while continuing to explore feedstock supplies and other petrochemical product growth opportunities.