The program will offer funding to every project that meets its criteria
Alberta announced a 10-year grant program on Thursday the government hopes will attract multi-billion dollar petrochemical investments.
The Alberta Petrochemicals Incentive Program, launching this fall, will invest in major petrochemical manufacturing projects in the province. Government funding will be provided to every project that applies and meets the criteria once they’re operational, said Dale Nally, Alberta’s Associate Minister of Natural Gas and Electricity.
Nally said a private evaluation program won’t be used to select projects, and the program will be open year-round for the next decade with no intermittent application deadlines.
“Our government is no longer committed to picking winners and losers,” Nally said. “We’re going to let the market do that.
“We’re going to stop asking industry to revolve around government schedule. We’re going to revolve around theirs.”
Instead of royalty credits, the program will offer grants, which Nally said is a more effective way to encourage investment, since it lets companies better account for the full value of incentive offered.
Nally said there will be significant opportunities to grow the province’s petrochemical sector by more than $30 billion by 2030, a figure he said is based on historical development in the sector and industry partner forecasts.
The province will monitor and assess the program throughout the next decade, and said there will be no cap on how much funding it will provide to investors. Nally said it’s possible an annual cap will be implemented, but that hasn’t been decided.
Nally acknowledged that too many new projects could risk overheating the sector, but the government’s ongoing assessment of the program will watch for that.
“That’s always the risk, so that’s why we committed to monitoring it throughout the 10 years,” he said. “We don’t have any hard caps in place. But if we have to look at an annual cap, that’s something that we’ll do.”
Alberta is already one of the country’s largest hubs for petrochemical manufacturing, and the province expects global demand to increase further, a demand the government hopes the program will capitalize on.
The program will run alongside the province’s Petrochemicals Diversification Program, not replace it, Nally said. The PDP offers royalty credits to companies in exchange for building facilities that turn ethane, methane or propane feedstocks into products such as plastics and fabrics.