Province seems to be listening to concerned Albertans
Likely getting tired of the near constant barrage of criticism they’ve landed since taking office last spring, the Notley government finally took a step that seemed to please most camps yesterday with the announcement of the Petrochemicals Diversification Program.
Alberta has been way too dependent on oil resources for decades - it’s not a new idea by any means, but previous governments just didn’t seem to understand the urgency of developing other major streams of revenue for this province.
Officials say it will help to create jobs, attract investment and diversify the economy.
According to Monday’s announcement, the program, “Will encourage companies to invest in the development of new Alberta petrochemical facilities by providing royalty credits.
“The program is expected to support the construction of several petrochemical facilities that use methane or propane to produce the materials for products that include plastics, detergents and textiles.”
It is expected these facilities could create up to 3,000 new jobs during construction, as well as more than 1,000 jobs once operation begins, and attract between $3 billion and $5 billion worth of investment, according to officials.
“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.”
The province will award royalty credits to select petrochemical facilities through a competitive application process. The total amount of the program is $500 million.
Credits will be awarded once approved projects are completed and feedstock consumption begins.
While petrochemical facilities do not directly benefit from royalty credits, as they do not pay royalties, the credits earned by an approved facility can be traded or sold to an oil or natural gas producer.
This producer would use these credits to reduce their royalty payments to government.
Another plus for the province of late was last week’s announcement that the NDP chose to adopt ‘restraint’ on royalties.
Royalty changes take effect in 2017 and only apply to new wells. The new framework will also maintain the existing royalty structures for 10 years on wells prior to 2017.
The panel took in more than 7,000 online responses, received 132 documents from stakeholders, held 65 stakeholder meetings across the province and reached 22,710 Albertans through a telephone town hall meeting.
Ahead of the review there was much discussion as to what Notley and her government would do.
On the heels of Bill 6, many were convinced Notley would make drastic changes to the royalty review but it appears she is listening to Albertans and is keeping the province’s economy top of mind.
The Wildrose were even quick to point out the positives, but were careful to mention that the panel ‘agreed’ with Wildrose’s position to provide stability in royalty rates for the energy sector.
“l am grateful the panel agreed with Wildrose’s position to provide stability in royalty rates for our energy sector, and that Premier Rachel Notley accepted,” Wildrose Leader Brian Jean said. “Our heart goes out to the Albertans who suffered job losses because of the instability caused by calling the royalty review. The next step is to recover from the damage done by this review and the series of poorly thought out policies that are harming our energy sector. Alberta needs to start seriously evaluating how to restore our competitiveness on the world stage.”
Jean pointed out that Alberta is becoming increasingly less competitive with other jurisdictions such as British Columbia, Saskatchewan, Pennsylvania and Texas.
With no change in the royalties, stakeholders say they have a more predictable environment now for them to work within.
Both of these announcements have received much praise from Albertans by in large.
The troubled economy is something that nearly every Albertan has felt in some capacity and announcements like these that provide stability in the market as well as new job creation are welcome.