'The time is now': Alberta boosts support for oil and gas upgrading
Total $2.1B now available in royalty credits, grants and loan guarantees
In a bid to combat the effects of low energy prices, Alberta is boosting its investment in two petrochemical upgrading programs to $2.1 billion, the government said Tuesday.
"For decades, we've been settling for less while seeing new jobs and investment go south of the border," Premier Rachel Notley said in a news release. "The time is now to think big, take action and finally upgrade more of our energy at home."
Notley repeated her announcement to a gathering of rural mayors and councillors at the Rural Municipalities of Alberta convention in Edmonton.
"I'll fight the pipeline battle until it is done.You can count on that," Notley said in her speech, "but at the same time I have determined that we must take greater control of our own economic destiny."
Notley said in the next few weeks her government will reveal more plans to further diversify the energy industry in Alberta.
"It offends me that we sell our resources for far less than what they are worth," Notley said.
Al Kemmere, president of the Rural Municipalities of Alberta, welcomed the premier's announcements.
Workers are finding jobs but rural Alberta is still climbing out of the recession, Kemmere told reporters.
He said the principle of stimulating the economy by adding value to Alberta resources is something he hears about across the country from his counterparts.
"These kinds of investments and creating more value added processes within the province I think are a great tool for advancing the province, keeping the product home, keeping the people working and advancing our economy that way."
On Monday, Notley announced a new "energy upgrading unit" in her office to prioritize the upgrading and refining of more of Alberta's energy resources within the province, and said funding announcements were expected within days.
Under the moves announced Tuesday, the government will provide a further $600 million in future royalty credits under its petrochemicals diversification program.
That is on top of $500 million in royalty credits announced in March, which the government said spurred the construction of Calgary-based Inter Pipeline's $3.5-billion petrochemical complex in the Industrial Heartland region northeast of Edmonton.
Under the diversification program, royalty credits go to projects that will build manufacturing facilities to process ethane, methane and propane from natural gas into more valuable products.
In a related move, the government said Tuesday it is increasing support under its petrochemical feedstock infrastructure program from $500 million to $1 billion.
The infrastructure program provides grants and loan guarantees to encourage industry to build facilities to supply natural gas liquids feedstock for petrochemical manufacturing.
Up to 15,500 construction jobs
The government said its investment in the two programs is expected to create up to 15,500 construction jobs and 1,000 operating jobs once plants are complete. Total private-sector investment is expected to be $20.6 billion. The province expects to receive $284 million in corporate taxes each year.
Notley announced Monday the appointment of three "special envoys" to work with energy sector experts and CEOs to find solutions for closing the oil-price differential.
The price gap between Western Canadian Select crude oil and the U.S. benchmark West Texas Intermediate is at a historically high level. Western Canadian oil prices crashed in September because of a backlog of oil in Alberta.