Alberta takes significant step toward diversifying economy
The new Petrochemicals Diversification Program is part of the government’s continued action on the economy, helping to create jobs, attract investment and diversify Alberta’s economy.
The program will encourage companies to invest in the development of new Alberta petrochemical facilities by providing royalty credits. The program is expected to support the construction of several petrochemical facilities that use methane or propane to produce the materials for products that include plastics, detergents and textiles.
The benefits of this program are significant to Alberta workers and their families. It is expected these new facilities could create up to 3,000 new jobs during construction, as well as more than 1,000 jobs once operation begins, and attract between $3 billion and $5 billion worth of investment.
“Today’s commitment to diversification in the petrochemical sector is part of the government’s economic action plan—a plan to create jobs, diversify our economy and add more value to our resources. This innovative program builds on the strengths of our energy industry and will attract new investment to our province.”
“This program builds on the royalty review panel’s recommendation for a value-added natural gas strategy to support further upgrading and production of higher-value energy products in Alberta. This is another way to diversify our energy economy and create good jobs in Alberta.”
How it works
- The Government of Alberta will award royalty credits to select petrochemical facilities through a competitive application process. The total amount of the program is $500 million.
- Credits will be awarded once approved projects are completed and feedstock consumption begins.
- While petrochemical facilities do not directly benefit from royalty credits, as they do not pay royalties, the credits earned by an approved facility can be traded or sold to an oil or natural gas producer. This producer would use these credits to reduce their royalty payments to government.
“The government’s action today to promote investment in the petrochemical industry is the right decision at the right time, not only for Alberta’s petrochemical industry, but also for skilled labour in the province. This program will create jobs for workers, but will also diversify our economy—which the province needs now.”
“This program diversifies our economy through the attraction of new investment and the creation of stable, sustainable jobs softening the current economic cycle we are experiencing. We are very pleased that the Government of Alberta recognizes the importance of the petrochemical industry to Alberta’s economic future. We are looking forward to continued collaboration as we work with our government, industry and labour partners to solidify investment and begin construction on new facilities.”
Application information will be available at www.energy.alberta.ca on February 4, 2016 and will include eligibility criteria and information about the competitive selection process.