Alta. commits to oil upgrading
Alberta’s Minister of Energy Margaret McCuaig-Boyd announced new government funding to help bolster the province’s petrochemical and oil upgrading industries at a press conference in Edmonton on Monday.
Among the announcements was $500 million in royalty credits for the second round of the Petrochemical Diversification Program over four years, starting in 2020-21, to attract greater international investment, $500 million in loan guarantees and grants to the Petrochemical Feedstock Infrastructure Program over three years, starting in 2021-22, to help upgrade existing petrochemical plants in the province, and $1 billion over eight years to to help foster partial bitumen upgrading here in Alberta to create higher grade crude products for shipment out of province. That funding will kick in starting in 201920.
The substantial so-called “downstream” investment was in line with what many in Alberta’s energy sector have been calling for for years.
“By supporting diversification in our energy sector, we’re supporting good jobs and building an economy to last,” McCuaig-Boyd told those in attendance for the press conference. “That’s why we’re taking action to ensure Alberta is even more competitive for major private investments in the petrochemicals sector. Adding more value to our raw products at home means more jobs for Albertans and getting top dollar for our resources.”
McCuaig-Boyd cited the recently released Energy Diversification Advisory Committee’s (EDAC) report as being an important inspiration behind the funding announcements Monday. EDAC was co-chaired by Alberta Labour Federation president Gil McGowan, who was in Lethbridge last week.
“Our biggest considerations when it came to writing this report was to find new ways to adapt Alberta’s oil and gas economy in the face of global changes in energy markets, but also to create more family and community-sustaining jobs,” McGowan told The Herald. “And not just jobs for the short term, but jobs for the long term. We became convinced one of the best ways to do that was to reconfigure our existing oil and gas economy toward the downstream, which means focusing on value-added development as opposed to what some might describe as rip it and ship it.”
While Lethbridge does not have a strong petrochemical sector attached to the oil and gas industry, McQuaig-Boyd said the government would not be making its decision on who gets the grant funding by who currently has such capacities, stating the government was open to all proposals from anywhere in the province. And it’s not just petrochemicals, she said, the hope was also to encourage construction and investment in two to five new partial upgrading facilities in the province.
“It is totally up to industry where these facilities will best fit,” stated the minister. “I have no preconceived estimates of who will apply, but we expect to get a lot of interest ... I can tell you there is lots of international interest in what we are doing here in Alberta.”
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