Energy Diversification Act

Bill 1 has been introduced to create and support programs that will help Albertans get the best value from their oil and gas resources.

Status: Bill 1 introduced Mar. 8, 2018
Ministry responsible: Energy

Overview

Bill 1: The Energy Diversification Act would bring together initiatives that build upon Alberta’s energy strengths to create thousands of jobs, attract billions of dollars in private investment and secure Alberta’s energy future through diversification and innovation.

Diversification will bring stability and long-term growth and strength to Alberta’s economy. This does not mean leaving behind Alberta’s traditional leadership in oil and gas.

If passed, Alberta would commit up to $2 billion to leverage private investment, including:

  • $500 million in royalty credits for a second round of the Petrochemicals Diversification Program
  • $500 million in loan guarantees and grants to establish a Petrochemical Feedstock Infrastructure Program
  • $1 billion in loan guarantees and grants to initiate a Partial Upgrading Program

These initiatives are expected to attract $10 billion in private investment, support 8,000 construction jobs and hundreds more operational jobs.

Petrochemicals diversification

Building on Alberta’s large supply of natural gas and natural gas liquids, a second round of the successful Petrochemicals Diversification Program would encourage companies to build manufacturing facilities that turn petrochemicals into more valuable products, such as plastics, fabrics and electronics.

The program would also be expanded to include proposals for ethane, in addition to propane and methane. Ethane is used to create components needed for plastics, detergents, lubricants and other household products.

Two projects were selected under the first round of this program, which began in 2016. Construction has already begun on a $3.5-billion facility in the Industrial Heartland.

Petrochemical manufacturing is the largest manufacturing sector in Alberta, directly employing more than 7,500 people and exporting $8.2 billion worth of goods each year.

Fact sheet: Petrochemicals Diversification Program (PDF, 173 KB)

Petrochemical feedstock infrastructure

The new Petrochemical Feedstock Infrastructure Program would help industry build facilities to capture natural gas liquids required for petrochemical manufacturing, such as ethane, methane and butane.

Increasing Alberta’s supply of raw components reduces the need to import from the United States or elsewhere. It also meets a necessary condition for industry to construct and operate world-class petrochemical processing facilities in our province.

This initiative would:

  • supply a growing petrochemical industry
  • add value to Alberta’s energy resources
  • lower the carbon intensity of a barrel of oil

Fact sheet: Petrochemical Feedstock Infrastructure Program (PDF, 98 KB)

Partial bitumen upgrading

The Partial Upgrading Program would encourage companies to build 2 to 5 bitumen upgrading facilities to increase the value of our energy resources before shipping.

Partial upgrading reduces the thickness of oil sands bitumen so it doesn’t need to be blended with diluent. Oil sands companies purchased $13.3 billion worth of diluent in 2016, much of it imported.

Upgrading would enhance the competitiveness of the oil sands industry by:

  • improving the quality of Alberta’s bitumen
  • reducing industry costs and discounts on bitumen
  • increasing pipeline capacity and potential markets
  • enabling more refineries to process bitumen products

Fact sheet: Partial Upgrading Program (PDF, 98 KB)

Timeline

If passed, funding for the programs will be allocated as follows:

  • Petrochemicals Diversification Program – spread over 4 years beginning in 2020-21
  • Petrochemical Feedstock Infrastructure Program – spread over 3 years beginning in 2021-22
  • Partial Upgrading Program – front-loaded beginning in 2019-20

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