The Government of Alberta is looking to bring some relief to the oil industry by helping companies invest in refining and processing within the province.
Premier Rachel Notley announced the first set of plans this week as part of a made-in-Alberta strategy to keep more value from oil resources.
The province will double support for petrochemical upgrading, with total investment now reaching $2.1 billion to promote stable, petrochemical upgrading and more jobs now and in the future.
She adds by taking action now, this investment is expected to help create as many as 15,500 jobs during construction of multiple facilities across the province and an additional 1,000 jobs once operational.
Total private-sector investment is expected to be $20.6 billion and, once operational, the facilities will generate approximately $284 million each year in revenue to the province.
“We're fighting for Albertans to make sure we get every dollar of value for the oil and gas resources that belong to them. For decades, we've been settling for less while seeing new jobs and investment go south of the border. The time is now to think big, take action and finally upgrade more of our energy at home.”
Notley says the increased investment follows strong interest in programs under the Energy Diversification Act announced earlier in 2018.
Alberta received 23 applications for petrochemical upgrading projects from Canadian and international companies, representing $60.2 billion in potential investment in Alberta’s energy sector.
Margaret McCuaig-Boyd, Minister of Energy says the program far exceeded expectations.
"It sends a clear signal that companies from around the world want to invest in Alberta. We need to put our foot on the gas pedal, accelerate energy upgrading in our province and seize this great opportunity to bring even more jobs and value to Albertans," said McCuaig-Boyd.
The government will soon have a short list of proposed projects and then discussions will begin with successful proponents with plans to announce projects in the coming weeks.
Alberta is building on the success of a 2016 program which committed $500 million in royalty credits and has already resulted in construction of Inter Pipeline’s $3.5-billion petrochemical complex east of Edmonton.
Petrochemical facilities convert natural gas, conventional oil and synthetic crude oil into more valuable products, such as gasoline, fertilizer and other products, like plastics, that are used to manufacture thousands of goods used in everyday life. In Alberta, natural gas is the primary resource used to support production of petrochemicals: ethane, propane and butane.
Investing in petrochemical diversification:
The second round of the Petrochemicals Diversification Program now provides a total of $1.1 billion in future royalty credits for approved projects that will build manufacturing facilities to turn ethane, methane and propane into more valuable products. The initial $500 million of support was announced in March 2018 and a further $600 million in November 2018.
These new manufacturing facilities require the basic building blocks that they can then convert into more valuable products. Alberta’s support for projects in this initial step of the upgrading process, the Petrochemical Feedstock Infrastructure Program, has been doubled to $1 billion to secure the raw materials needed to keep this growing energy sector strong.
A total of 23 applications have been received for both programs, representing potential investment of more than $60 billion from Canadian and international companies.
Once approved, the projects are expected to create up to:
$20.6 billion in new private investment
15,500 good-paying construction jobs
1,000 operations jobs
$284 million a year in corporate taxes
Energy diversification programs
Energy processing in Alberta
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