Alberta Premier Rachel Notley reiterated her call for Canadians to support new oil pipelines and improve two energy bills at a speech in Toronto, but made no mention of whether she’ll mandate crude-production cuts.
“At the same time, when investor uncertainty created by the province of B.C. and other factors pushed Kinder Morgan out of the TMX proposal, the federal government did step in, buy the pipeline, and they are working within the rules of the federal court of appeal to get it done,” she said.
“I think that we have to acknowledge that that is happening.” Notley told Canada’s CTV News on Wednesday that an announcement on the issue is coming “in the very immediate term,” raising some expectation that she’d announce the move at her Toronto speech.
Calls have come both from within Canada’s energy industry and Notley’s political opponents to curtail production in the oil patch, but the premier said that this type of measure is now more complicated than when it was last imposed by former Alberta Premier Peter Lougheed in the early 1980s.
“The industry itself is much more complex,” Notley said. “The construct of the individual players is very different and so the consequences can be a bit different. The way we approach it is going to have to be a little bit more nuanced, I would suspect.”
The S&P/TSX Energy Index tracking Canadian producers was up 1.7% as of 1:00 p.m. in Toronto. Notley has convened a panel of experts to examine how best to address the collapse of Western Canadian crude prices and vowed that “folks will hear from us on that in the next few days.”
In the interim, Notley said Wednesday that Alberta is working to purchase rail cars to increase crude-by-rail capacity to help alleviate the production glut and told BNN Bloomberg that rail space “should not be a major inhibitor.”
However, despite Notley’s praise for the federal government’s decision to step in and literally take ownership of the Trans Mountain expansion project, she said there’s still a way to go before they can unfurl a “mission: accomplished” banner.
They do not deserve credit for a job well done, because it’s not done yet,” she said.
“As I’ve said, this idea of us being able to participate in Canada with the appropriate moving of our resources from province to province and outside of the country to new markets , these are things that are in the bailiwick of the federal government.
Alberta Premier Rachel Notley said the province’s plan to purchase additional rail cars to move oil will not hurt other industries. A supply glut in Alberta has seen Canadian oil prices slip to record-low levels, with Western Canada Select selling for $40 a barrel less than other producers.
The plan aimed at bringing oil to market will see crude by-rail shipments increase by more than 30 per cent from current levels, but Notley stresses that it will not disrupt rail shipping for other industries.
“What we are talking about doing is buying more cars and more locomotives. We’re not talking about trying to disrupt other products,” Notley told reporters after giving a speech before the Toronto Regional Board of Trade on Thursday.
During her speech, Notley urged business leaders to support new oil pipelines and reiterated her call for improvements to proposed federal legislation that she says creates additional uncertainty for Alberta.
United Conservative Party (UCP) leader Jason Kenney on Wednesday called on the province to mandate a 10 per cent production cut to assist in reducing supply.
Notley called the situation a “crisis” and urged immediate action “to shore up the waning investor confidence that is so fundamentally important to Canada’s energy industry and the economy.”
The situation has prompted the Alberta government to purchase about 80 locomotives and 7,000 cars that will help move an additional 120,000 barrels per day to market.
Notley said Thursday that the rail plan would increased the current record-level shipments of crude-by-rail by more than 30 per cent, narrowing the oil price gap by about $4 a barrel.
The province is currently negotiating with a third party to purchase the cars, and Notley expects the deal will close “within weeks.” But Notley stressed that shipping more oil by rail is only a short-to-medium term solution.
Notley said the oil price differential is costing the Canadian economy $80 million a day, up from $40 million a day during the same time last year. But the premier stopped short of promising to mandate production cuts, something some industry executives and politicians have advocated for in recent days.
“There is value to this investment and not only from the most immediate perspective, but also as a hedge against further pipeline delays,” Notley said on Thursday.