Petrochemical diversification scheme to continue: Savage
Feedstock, upgrading programs dropped over higher levels of financial exposure
Alberta’s energy minister announced Wednesday the province is recommitting to the previous NDP government’s petrochemical diversification program while scrapping two other programs in the name of fiscal responsibility.
Energy Minister Sonya Savage confirmed her government’s $1.1-billion commitment as part of Phase 2 of the Petrochemical Diversification Program.
The program supports privately funded large-scale projects by providing royalty credits to companies that build facilities to turn ethane, methane and propane into products such as plastics, fabrics and fertilizers.
The royalty credits are only issued once the projects are completed and become operational.
To date, two projects, one from Inter Pipeline Ltd. and one from Nauticol Energy Ltd., have been awarded a combined $150 million in royalty credits, leaving $950 million still available under the program.
“This program has demonstrated success in developing projects in a financially responsible way with private industry taking the lead,” said Savage.
The government is discontinuing two other programs — the Petrochemical Feedstock Infrastructure Program and the Partial Upgrading Program which Savage says carry a higher financial risk to the province.
“These programs relied on grants and loan guarantees that carry a higher financial risk to our province and ultimately to Albertans,” Savage said. “We want to ensure that the innovation and development that industry can bring to the province is fiscally prudent and benefits both Albertans and investors in our province.”
The province will also not continue with the request for proposals for refinery projects, which would have potentially included government financial support.
Savage said her government did not get any request for proposals and she wasn’t aware of any serious proposals under the previous government.
Meanwhile, Dale Nally, associate minister of natural gas, said in the coming weeks his department will be gathering industry input and potential changes to the diversification program and how it can best attract private industry.
“Alberta has the expertise to get the most out of our resources but most importantly, we also have the know-how to develop them in a responsible manner,” said Nally.
Opposition leader Rachel Notley said the diversification program is a good one and the tweaks the government has made are minor.
“What it shows is that’s the kind of program that we already brought in place where you invest money and you get significantly more money back, and you can actually look and count the jobs it creates as opposed to a $4.5-billion corporate giveaway that thus far hasn’t created a single solitary job.”
Notley also said she spoke with federal NDP leader Jagmeet Singh Wednesday morning about the Trans Mountain pipeline and how important it is for Canada and Alberta.
“I talked him through the economics of it. That pipeline is not a subsidy, it is a money-making proposition. It is an investment for Canadians,” Notley said.
“I talked about the anxiety that this issue being revisited now is causing for working people across this province and that it needs to stop. I outlined my view that, quite frankly, it’s needless because he doesn’t have a path to asserting any kind of barrier to TMX and he shouldn’t be wasting political capital on it.”