December 11, 2008 / 8:07 PM / 9 years ago

Oil-rich Alberta to push for renewable fuels

CALGARY, Alberta (Reuters) - The Canadian province of Alberta, home to the biggest oil reserves outside the Middle East, will look to boost use of renewable fuels as part of an energy strategy released by its government on Thursday.

Conservative Premier Ed Stelmach said the province will spend C$239 million ($194 million) to expand the production and marketing of bioenergy and biofuels.

Alberta will also introduce renewable fuel standards in the province that call for gasoline to contain 5 percent ethanol by 2010 while diesel will need to contain 2 percent biodiesel.

Stelmach said at a news conference the measures would help fend off attacks that the province has lax environmental standards -- an argument pushed by environmental groups concerned by the development of Alberta’s vast oil sands.

It will also help it keep pace with other provincial standards and support Alberta’s farmers, Stelmach said.

“It’s a way of supporting the agricultural industry and also reducing our carbon footprint,” he told reporters.

Alberta’s new energy strategy will also take steps to boost processing of bitumen and petrochemicals in the province but Stelmach offered little information on what steps would be taken to encourage construction of the units.

Most oil sands players have deferred or delayed plans to build the multibillion-dollar upgraders that convert the tar-like bitumen into refinery-ready synthetic crude as oil prices fell while construction costs remain high.

Other firms, like EnCana Corp and Husky Energy Inc, have opted to partner with U.S. refiners to process their production.

The province will also work to upgrade Alberta’s aging electricity-transmission network and is looking for new links with other provinces and the United States.

($1=$1.23 Canadian)

Reporting by Scott Haggett; editing by Rob Wilson

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