WHEREAS the world price of oil and the United States’ increasing level of energy independence threatens Alberta’s competitive edge in oil and gas exports; and

WHEREAS in order for industry, the Province of Alberta, and its communities to grow and prosper, diversification in the form of value-added industries is required; and

WHEREAS most communities in Alberta have been harmed by the fall in oil prices, a fall that is expected to be prolonged, and that the current economic climate presents a unique opportunity to explore value-add industry; and

WHEREAS the oil and gas industry has always risen to challenges it has faced in the past; and

WHEREAS a previous multi-stakeholder group successfully found alternatives to solution flaring in Alberta;

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Government of Alberta to create a multi-stakeholder task force composed of representatives from industry, academia, non-governmental organizations, Indigenous communities, municipal government, the provincial government and the public no later than April 1,  2017 to make recommendations on how to grow and enhance value-added development in the oil and gas sector.

The AAMDC has no active resolutions directly related to this issue.

Economic Development and Trade: Adding more value to our resources while creating economic activity and jobs is more important than ever. Since its formation in the fall of 2015, the Ministry of Economic Development and Trade (EDT) has actively pursued energy value-add as a strategic priority for diversifying and strengthening Alberta’s economy. In February 2016, the Government of Alberta (GOA) announced the Petrochemical Diversification Program (PDP) which has just awarded a combined $500 million to two petrochemical projects. The two projects will, for the first time in Alberta, process propane extracted from natural gas resources into value-added plastic products that can be use all over the world.

Both industry and the GOA have recognized that more can be done to pursue value added opportunities in the province. The Resource Diversification Council (RDC), an industry-led group, was created in March 2016 with the mandate to expand and diversify Alberta’s resource manufacturing industries. The RDC includes a diverse membership that represents stakeholders from both industry and labour organizations. EDT will continue to work closely with the RDC on ways in which the province can maximize the development of our resources and add value to the energy sector.

This past fall, the GOA also announced the creation of the Energy Diversification Advisory Committee (EDAC), to similarly explore opportunities and develop strategies to create jobs and stimulate investment through energy value-add. This multi-stakeholder panel seeks to determine what additional steps Alberta can take to build a more diversified and resilient energy economy that works with industry and communities to create jobs, moves the energy industry up the value chain, and diversifies the energy industry into new end products. The EDAC has a wide range of expertise to draw from in the areas of stakeholder engagement and consultation, energy sector expertise, labour, and investment/finance. The EDAC’s engagement process will include the public, aboriginal participation, and selected stakeholder engagement with other levels of government, non-governmental organizations, academics, and industry participants that have business or financial interests closely related to, or in, the value-add sector. The focus of the EDAC’s engagement will be to establish what its vision of a diversified energy sector looks like, and what role government could play in encouraging additional value-added processing in Alberta. The committee will also establish a website to request public engagement on energy diversification.

The GOA agrees with the the Alberta Association of Municipal Districts and Counties’ (AAMDC’s) strong emphasis given to value-add in the oil and gas sector, which is why we continue to work closely with the RDC and why we have asked the EDAC to provide recommendations to the Minister of Energy later this year. EDT continues to work closely with Alberta Energy on promoting value-add in the oil and gas sector, and we have co-ordinated this response with them.

Energy: On October 13, 2016, the GOA announced the creation of the EDAC to engage Albertans and explore opportunities to increase the value of energy resources, create jobs, and attract new investment. This includes examining such value-added opportunities such as partial upgrading, refining, petrochemicals, and chemicals manufacturing.

The committee brings together a diversity of expertise and will meet with a variety of stakeholders, and is expected to make final recommendations to the Minister of Energy in the fall of 2017. The committee will engage with stakeholders beginning in the first quarter of 2017, including representatives from industry, academia, non-governmental organizations, indigenous communities, municipal governments, and the public over the next several months. This is consistent with the multi-stakeholder approach followed by the AAMDC.

Interested parties can subscribe to the committee’s  website www.energy.alberta.ca/Initiatives/4369.asp, to be notified when more information on engagement is available and make submissions to the committee directly.

The Government of Alberta response indicates a strong interest in prioritizing value-added opportunities associated with Alberta’s energy sector. As it relates to the intent of the resolution, the formation of the Energy Diversification Advisory Committee (EDAC) appears to be an encouraging step towards embracing a multi-stakeholder approach to diversifying Alberta’s oil energy industry. Through a report titled Diversification, Not Decline: Adapting to the new energy reality, the committee provided 36 recommendations to the Government of Alberta in the fall of 2017. Subsequently the Government of Alberta accepted the advice and proceeded to introduce Bill 1: The Energy Diversification Act to the Legislature on March 8, 2018. The Act outlines support for partial upgrading technologies to help attain more value from energy sources, the second round of the Petrochemicals Diversification Program, and petrochemical feedstock infrastructure.

For this reason, RMA has assigned this resolution a status of Accepted in Principle.