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article imageAlberta government gives petrochemical industry $1 billion boost

By Karen Graham     Mar 13, 2018 in Technology
The provincial government will spend $1 billion over the next four years on the petrochemical industry to try to diversify Alberta’s energy sector.
In Edmonton on Monday, Energy Minister Margaret McCuaig-Boyd announced the $1 billion in incentives, saying the cash will come from two streams: the second round of the petrochemicals diversification program, for which 16 companies applied last time; and a new feedstock program.
The Energy Minister said Bill 1, if passed, will make $500 million available for a second round of the petrochemicals diversification program, reports CBC News.
The petrochemicals diversification program was launched in 2016 to encourage companies to process petrochemicals such as methane, propane and ethane. Under Bill 1, the diversification program will come in the form of royalty credits spread over four years starting in 2020-21.
The feedstock infrastructure program will see three years of loan guarantees and grants beginning in 2020-21. This program will encourage companies to develop facilities to capture more natural gas liquids for value-added development.
McCuaig-Boyd pointed out that straddle plants can extract some natural gas liquids from major LNG pipelines. Those extracted products are then sent to other processing plants.
Inspectors look over equipment a facility that emits methane gas.
Photo by polandeze
Hot on the heels of bitumen upgrade program
This new announcement comes on the heels of a $1 billion program to encourage the construction of up to five new partial upgrading facilities in the province announced in February. The money may come in the form of $800 million in loan guarantees and $200 million in grants.
Premier Rachel Notley said in announcing the program that details have yet to be hashed out, but it’s likely smaller projects will get grants to support technological innovation. She did say that applicants will go through a rigorous vetting process. “It’s not going to be a free-for-all,” she told a news conference at the Federal Building in Edmonton at the time.
And like the new diversification program just announced, the new vetting process is a result of recommendations made by Alberta’s energy diversification advisory committee, formed in 2016 after the royalty review. The committee's mandate was to figure out how to increase the value of Alberta's natural resources and create more jobs.
One of the big things the committee found out was that the energy market has become very volatile as the world moves away from fossil fuels. And that is the primary purpose of the diversification program. "Bill 1 is going to help us realize a more dynamic and diverse energy sector here in Alberta," McCuaig-Boyd said. "It's going to ensure this economic recovery is built to last."
More about Alberta, petrochemical industry, Diversification, $1 billion, volatile energy market
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