Pursuit of Trudeau’s net-zero climate agenda euthanizes $4 billion AB methanol project

Nauticol’s proposed Grande Prairie Alberta Blue Methanol plant underwent a green reset midway, ballooning costs by 100%. The project was to turn low-value methane into methanol used for heating fuel in Asia and to make glues, formaldehyde, and anti-freeze.

Varcoe: 'It's done' — Petrochemical proponent laments a $4B methanol project's demise
"We basically had to shut the project down because even to keep negotiating, to keep it going, you need money," says Nauticol Energy chair Leo de Bever.https://t.co/lHmufeUBWL #ableg #yyc #yeg

— ChrisVarcoe (@ChrisVarcoe) February 7, 2023

According to the Alberta government’s description of the Nauticol plant, the project was anticipated to create 5,000 construction jobs, and 1,260 permanent direct and indirect jobs, and provide sustained Indigenous and community economic benefits over its 35+ year life.

The Calgary-based Nauticol plant was initially proposed to cost $2 billion dollars before the CEO set out on an aggressive pursuit of net-zero emissions in the midst of COVID-19 economic uncertainty, which included carbon capture of the plant’s emissions through a partnership with carbon capture firm Enhance Energy to sequester 1 million tonnes of carbon dioxide annually.

“There just had to be a change in plant design and the execution strategy and a big move to net-zero,” Nauticol president and CEO Mark Tonner told the Financial Post in 2021, noting the company wanted to get in front of the trend with its own carbon-cutting initiatives.

The green revamp of the project also included sourcing renewable energy to power the plant.

“It makes Nauticol the first company to produce net-zero or blue methanol on a world scale,” Tonner said at the time, admitting the new green design would add “some costs” to the project. It doubled the costs.

However, Tonner isn't blaming his net-zero scheme for nuking the Nauticol project. He blames the lack of a favourable royalty deal first promised to the company by former NDP premier Rachel Notley in a campaign announcement in 2019. The deal would amount to $80 million in royalty tax credits after the project was completed.

Tonner told the Calgary Herald:

“We had to stop the project because we had to bring together a number of parties (including investors and the provincial government). And it turns out, one of the parties didn’t fulfill their commitment — let’s put it that way — and we ran out of time.”

Tonner wanted to go green but wanted Albertans to pay for it. And the New Democrats, who normally decry Big Oil and subsidies to large corporations, are perplexed that the UCP did not honour the losing party’s campaign promise to bail out Nautical at a time when the UCP were elected with a mandate to get the province's finances back in order after several NDP-led credit downgrades.

The Canadian Taxpayers Federation (CTF) applauded the Alberta government after receiving a credit upgrade from Moody's, the international credit rating agency.

MORE: https://t.co/zWewru4wcM pic.twitter.com/xW9hzs8ctH

— Rebel News (@RebelNewsOnline) January 30, 2023

“What we would like to know is whether the government did everything it could,” NDP energy critic Kathleen Ganley told the Herald.

“The government owes an explanation to Albertans, to tell them they didn’t just let this investment go away, that they didn’t just let these jobs disappear.”