Standing committee examines Bitumen Bubble's silver lining

AFL to highlight advantage of in-province upgrading in presentation to Redford Government

Edmonton – Alberta Federation of Labour president Gil McGowan will promote the benefits of the bitumen bubble on Tuesday.

McGowan, who will be presenting to the Standing Committee on Alberta's Economic Future about the Bitumen Royalty In-Kind (BRIK) program, says that the bitumen bubble is an opportunity to create more in-province upgrading projects.

The BRIK program, which incentivizes in-province upgrading, is under the government's microscope this week as they consider how they intend to continue or expand it. McGowan, who will be speaking to the committee from 1:00 p.m. to 1:45 p.m. on Tuesday, will be available to media immediately after his presentation.

“This is the time to be investing in the long-term prosperity of this province,” Alberta Federation of Labour president Gil McGowan said, noting that the program has helped create capacity to upgrade up to 75,000 more barrels per day in Alberta. “75,000 barrels per day may sound like a lot, but it’s really little more than a drop in the bucket. Building Alberta's economic future requires more than just one BRIK.”

Under the BRIK program, the province takes its royalty payments from producers in bitumen, the thick, heavy oil squeezed out of the oilsands, rather than in cash.

“The governments own internal documents indicate that there is $72 billion in refining value being lost as a result of the current focus on raw bitumen exports,” McGowan said. “This is money the Alberta taxpayer could recover if we had an upgrading strategy. I'm glad to have been invited to speak on this subject — it gives me hope that the government might be taking in-province upgrading strategies seriously.”

Several times over the past decade, and under the leadership of three premiers, the Government of Alberta has promised to ensure at least 2/3 of Alberta's bitumen is upgraded in the province. At present, barely half of our bitumen is upgraded in-province, and the percentage is decreasing.

“The latest government projection is that we will only be upgrading 26 per cent of our bitumen by 2020,” McGowan said. “Something needs to be done to turn this ship around.”



Gil McGowan, President, Alberta Federation of Labour at 780-218-9888 (cell)
Olav Rokne, AFL Communications Director at 780-289-6528 (cell) or via email

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