The Alberta government is looking to boost the province’s petrochemical sector with a new program that it expects will attract up to $5 billion in investment.
Royalty credits amounting to $500 million will be provided to new plants that turn raw natural gas products – methane and propane – into materials used to make plastics, textiles and other goods.
The credits will be paid out over three years once the projects are complete.
The idea is for the petrochemical companies to trade or sell the credits to natural gas producers, which can use them against their royalty payments.
“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. This innovative program builds on the strengths of our energy industry and will attract new investment to our province,” Minister of Economic Development and Trade Deron Bilous said.
The government says the program has the potential for two or three new facilities to be built in Alberta – employing in total up to 3,000 during their construction and more than 1,000 directly and indirectly once production starts.
Alberta Liberal Leader David Swann said since the full details have yet to be released, his opinion could change, but so far he is pleased with the plan.
“There are several planned projects which could benefit from this new program,” Swann said. “One example is Williams Energy’s proposal for a polypropylene plant. All in all, it appears to be a win-win for diversification and jobs.”
Alberta lost more jobs last year than in any year since 1982, when the province was in the throes of a deep recession, according to Statistics Canada.
The government agency released revised figures showing that Alberta had a net loss of 19,600 jobs in 2015, up from the 14,600 job losses it estimated in early January.
On Friday, the NDP government introduced an industry-friendly royalty system that won’t change the province’s take from oilsands projects. One recommendation from last week’s royalty review report was to examine ways to encourage more investment in facilities that turn raw resources into more valuable products.
“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. This is another way to diversify our energy economy and create good jobs in Alberta,” Energy Minister Margaret McCuaig-Boyd said.
The decision came as oil hovers around US$30 a barrel and industry players have warned the government against doing anything to worsen the pain.
With files from Slav Kornik, Global News.
© 2016 The Canadian Press