Back to hewers of wood and drawers of water : energy, trade and the demise of petrochemicals in Alberta

One of the consequences of The North American Free Trade Agreement (NAFTA) has been that Canadians no longer have the ability to manage the price and supply of natural gas or regulate exports. The rising price of oil and natural gas has had a profound impact on the petrochemicals industry, which is heavily reliant on natural gas as both an input and an energy source. This study focused on the recent closure of Celanese, one of the oldest petrochemical plants in Alberta. The closure was linked to natural gas and supply changes and placed in the context of broader trends in the petrochemicals industry as well as to the lack of energy and industrial strategies in Alberta. The study suggested that the causal factors in natural gas price and supply changes revolved around NAFTA, gas and pipeline policies and export policies. Significant changes resulting from these agreements and policies included national treatment rules; the opening of the energy sector to foreign corporations; the prohibition of preferential pricing for Canadian industries; the elimination of export taxes; impact assessment requirements for export licences; and the introduction of the proportional sharing requirement whereby current export levels are guaranteed to the United States. It was suggested that these changes had the effect of increasing exports while reserves began to decline. Recommendations were made regarding renewed export, environmental and energy strategies and policies. It was concluded that the petrochemicals industry could be supported by a more effective energy resource management strategy that prioritized Canadian consumers. 107 refs., 1 tab., 5 figs