Alberta reduces oil production
EDMONTON – Days after a buoyancy in the Edmonton Journal suggested to limit oil production, Alberts premier Rachel Notley officially announced that the province will cut back and produce the main driver in Albert's economy for the next year. [19659002] Notley said the province would reduce oil production by 325,000 barrels per day – a reduction of 8.7 percent – to help record storage gluten. The limitation will come into force in January and will be in place until 31 December 2018.
She said that the price gap that forces the government's action is caused by the federal government's decade-long inability to build pipelines. [1[ads1]9659002] "Ottawa's failure in this area has left Albert's energy producers with few opportunities to move their products, causing serious dangers to the energy industry and Alberta jobs," a province's publication said.
. @RachelNotley Announces Cuts Back to Oil Production: pic.twitter.com/pKLpTNc1Ic
– Kayla Butler (@ButlerKayla) December 3, 2018
The reduction is expected to reduce market volatility and "limit the differential by at least $ 4 per barrel compared to where it would otherwise be and add an estimated 1.1 billion dollars of government revenue in 2019-20 – money used to pay for roads, schools and hospitals . "
The differential for Western Canadian Select (WCS) versus West Texas Intermediate (WTI) has recently been around $ 30 to $ 50 US, peaked at $ 52 in October. Notley said that the government has a duty to protect resources owned by all Albertan.
"But right now they are sold for pennies on the dollar. We have to act immediately and we have to do it together. I can not promise the coming weeks and the months will be simple but I can promise we will never return fight us to protect the jobs and resources owned by all Albertans. I will never stop fighting for Alberta, "she said.
"The low price era must end," says Notley re: Oil Production Limitation.
– Kayla Butler (@ButlerKayla) December 3, 2018
] Notley told reporters at the announcement that it does not matter the size of the oil company, large and small manufacturers will be affected.
"We have issued 10,000 barrels [a day] except for all manufacturers. Of course, if you are a small manufacturer, the value of this exception is greater for them than for the major manufacturers. But we think this is a good way to allow the flexibility needed and industry to accommodate these changes, "she said.
How will the cuts affect big and small manufacturers? @ CarlyDRobinson Ask @RachelNotley : pic.twitter.com/qXQ8YQGF8s
– CityNews Edmonton (@CityNewsYEG) December 3, 2018
]] The opposition leader said he agreed with Notley's action; UCPs Jason Kenney says that Alberta should never have been in this situation in the first place, criticizing Ottawa for killing pipeline projects.
He said that he recommends the prize to follow on a proposal he had brought forward, and added that he did not believe the government's action would result in job losses. Kenney also said that the oil crisis is not specific to our province, and he believes that Saskatchewan should follow Albert's leadership in reducing the price gap.
The only thing he would change in the action is to increase 10,000 barrels of a day's exception for small producers.
The Canadian Oil Producer Association (CAPP) says that this action from the province emphasizes an absolutely poor situation in which the energy industry is in.
"The Canadian oil and gas industry has met a number of significant challenges in recent years, including termination of major pipelines such as Northern Gateway and Energy East, as well as unacceptable delays to other projects – all contributing to the big difference we are experiencing today, says a statement from CAPP President and CEO Tim McMillan.
"Actions like those announced today emphasizes the dire situation we are in. It strengthens the need for Canada to increase exports of oil and natural gas to existing and new markets, which ultimately will help meet global demand and expand our customer base. "
Cenovus Energy has also issued an answer to the measures, saying, under normal circumstances, oil and gas producers will never speak for the government's intervention.
" These are not common conditions, "said the statement from the company president and CEO Alex Pourbaix.
Alberta's Prime Minister Rachel Notley and her government made difficult but necessary decision to implement a temporary mandatory oil production cutt in Alberta. Read our CEO's reply: pic.twitter.com/wsWanBFeRS
– Cenovus Energy (@cenovus) December 3, 2018
The statement continues to say that this is an extreme case in need of limitation.
"Alberta's no point is to pass by while valuable oil resources sell for Nothing, the provincial treasury loses up to $ 100 million a day, job losses continue to mount, and our industry is suffering from billions of dollars in the long term value destruction. "
The Pourbaix statement states that the measures will help balance the market for new rail and pipeline capacity now available.
