Put oil 'crisis' on first ministers agenda: Alberta, Saskatchewan premiers

Put oil 'crisis' on first ministers agenda: Alberta, Saskatchewan premiers

I was particularly encouraged to see Premier Notley and Mr. Kenney rise above partisan politics to support this measure in the best interest of all Albertans.

While praising her main opponents in the Alberta legislature, Notley put the blame for the current state of affairs right where most Albertans seem to think it belongs: On the federal government for not approving the pipelines Albertans have now persuaded themselves will solve all their economic problems. "We are essentially giving our oil away for free. this is not sustainable".

Fire-sale prices have led to concerns the oilpatch will have to find savings elsewhere in the coming weeks and months by slashing capital spending or jobs. Cuts will initially reduce the oversupply by 325,000 bpd, but eventually that number will drop to 95,000 bpd after excess storage is dealt with.

Canada's oil production is at a record 4.6 million barrels a day, but producers can not get oil to market because the pipelines that cross into the United States are full. "The good news is there is light at the end of the proverbial pipeline", analysts at Scotiabank wrote in a note on November 21, referring to Enbridge's Line 3 replacement, which would provide an outlet for 370,000 bpd. Each operator will have their first 10,000 barrels per day exempted, so small producers are not affected. If Saskatchewan followed the Alberta model, and all producers over 10,000 bbls/d were curtailed by 8.7 per cent, the curtailment would total 25,484 bbls/d. Roughly 35 million barrels, about twice the normal level, are in storage. The provincial government said that the additional rail capacity could narrow the WCS discount by $4 per barrel.

And there is no sign whatsoever that any method developed to ship Alberta oil - whether in the form of rail cars, new pipelines or rehabilitated old ones - will not eventually be used to its fullest capacity, with predictable impact on global climate change.

The Trans Mountain pipeline expansion, which would triple capacity to move oil to the west coast, was approved two years ago, but is now in legal limbo as Ottawa revisits the impacts on First Nations and B.C.'s marine environment. The situation got to the point that Alberta Premier Rachel Notley mandated supply cuts across the industry.

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The move has been supported by both the United Conservative Party and the Alberta Liberals, while industry seems to be split.

While the government isn't helping with the rail auto purchase and had no new funds for oil and gas in its fall fiscal update, Natural Resources Minister Amarjeet Sohi did reveal on Friday that he had asked the National Energy Board to evaluate whether Canada's pipelines are being used to their full capacity.

To be sure, the Canadian government has had its hand in the energy industry before. Industry groups and pundits scolded protestors, declaring that the oil would find its way to the market one way or another.

"We awarded another drilling contract for about $1,000,000 to a couple different service companies, so we're moving forward with our growth strategy", Clugston said.

"They dragged their feet".

A weekend 90-day ceasefire between the USA and China on imposing higher tariffs was a catalyst for global markets to rise even though a final resolution is far from certain, Fehr said in an interview.

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