The Alberta government plans to direct nearly $1.4 billion over the next seven years toward fostering innovation in the oil and gas sector with the goal of reducing the carbon-emitting intensity of those industries while developing new ones.

"In a word, this is about competitiveness," Economic Development Minister Deron Bilous said Tuesday, as several senior members of the province's NDP government announced the broad strokes of the complex plan.

"This is about partnering with industry to ensure that they are investing in innovation so that they do reduce their carbon footprint but they also lower their costs and they remain competitive."

How the funding breaks down

The biggest chunk of funding — about $440 million — will be targeted directly at the oilsands.

Another $225 million will be aimed at driving innovations that reduce greenhouse gas emissions across a wider range of industries.

A further $240 million will be devoted to energy-efficiency projects in large-scale industrial, agricultural and manufacturing operations.

A more modest $63 million has been earmarked for bioenergy projects, including those dealing with combustible fuels like biodiesel and ethanol, as well as electricity generated from biomass.

And $400 million will be set aside for loan guarantees aimed at reducing risk for financial institutions and other corporations that invest in renewable energy and energy efficiency measures.

The bulk of the funding will come from the province's carbon tax, which came into effect this year at a rate of $20 per tonne and expands to $30 per tonne on Jan. 1.

'Climate change is a fact of life'

Bilous said the host of measures, details of which will be revealed in the coming weeks, are necessary to address the global realities now facing the province and its economy.

"Things change," he said.

"Our biggest customer for energy — the United States — has turned into our biggest competitor. Climate change is a fact of life and a business reality. And it's unlikely that $100-a-barrel oil is coming back anytime soon."

Energy Minister Margaret McCuaig-Boyd said the measures are also aimed at expanding the marketability of Alberta's petroleum products as the world begins to transition to a lower-carbon economy.

"When the world thinks about new and better ways to produce energy, we want them to think about Alberta," she said.

Energy Minister Margaret McCuaig-Boyd speaks to reporters about her NDP government's plan to help improve the competitiveness of the province's energy industry. (Colin Hall/CBC)

"Make no mistake," she added.

"The question isn't if the world will need oil for some time now. It's if the oil will be produced sustainably in places like Alberta or if it will be imported from somewhere like Saudi Arabia."

Many investors are now "demanding credible plans to fight climate change," McCuaig-Boyd said, and Alberta needs to not only keep up with the global shifts but get ahead of them.

"We're going to take some advice from Wayne Gretzky, who famously said that he always would skate to where the puck was going, not where the puck has already been."