While our provincial economy currently sits in a slump, the Notley government has released a new program in an attempt to diversify Alberta’s economy.
On Monday the government announced the development of the Petrochemicals Diversification Program, which is intended to create jobs, attract investment and diversify the economy.
Government officials say the program will encourage companies from around the world to invest in the development of new methane and propane facilities in the province by providing royalty credits. This would take advantage of Alberta’s rather large supply of natural gas and the growing demand for byproducts like plastics, detergents and textiles.
Officials say the program could generate between $3 billion to $5 billion in new investment in the province, along with creating 3,000 new jobs during construction and an indicated 1,000 more afterwards.
“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,” said Minister of Economic Development and Trade Deron Bilous. “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,” said Minister of Energy Margaret McCuaig-Boyd. “This is another way to diversify our energy economy and create good jobs in Alberta.”
So how exactly does the program work? The provincial government says it will give royalty credits to petrochemical facilities through an application process. Credits will then be awarded once the projects are completed and ‘feedstock consumption begins’. Essentially, the credits are used by these companies to reduce their royalty payments.
“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,” said Chair of Alberta’s Industrial Heartland Ed Gibbons. “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.”
While this can be seen as a positive step forward, the program hinges solely on awarding credits to new projects from start to completion. Also, this program can’t really be seen as a move towards diversification as it is only assisting one sector.
More information can be found at www.energy.alberta.ca.