Alberta’s oil production curbs finally appear to be draining inventories, at least for now. The Alberta government’s move to cut corporate taxes from 12 to eight per cent. Alberta premier Jason Kenney offered his thoughts on the differing views between him and B.C. premier. Canada’s largest oil producers are calling on the Alberta government to reward companies. Alberta’s United Conservative government says it will try to offload crude-by-rail contracts signed by the previous NDP. Crude supplies in Western Canada fell by 2.75 MMbbl last month to the lowest since November 2017.
It called Bill C-48, the Oil Tanker Moratorium Act, “a prejudicial attack on Alberta. The federal government announced its decision to reapprove the contentious project on Tuesday afternoon. Tzeporah Berman only learned of her cameo appearance at an Alberta government. The Alberta government says it will again ease its crude oil curtailment program for September. The decline is welcome news for the province, which has been struggling to set production limits at a level. It has added more than $2 billion to second-quarter net incomes of major oilsands producers Suncor Energy Inc.
Alberta wants to have its say when British Columbia goes to the Supreme Court. It commit to adding crude-by-rail capacity by easing their oil curtailment levels. It would shrink inventories by making oil cheap enough to stimulate exports by rail. Kenney said the approval doesn’t mean construction or completion of the pipeline. News conference about its so-called energy war room after a flood of nasty messages. The resulted in income additions by Suncor of $1.12 billion. The Alberta government says it has filed a notice of intervention in B.C.’s appeal. The proposal would allow crude oil export capacity.
Rory Johnston, commodity economist at Scotiabank says “It seems like the government is playing it safe to very carefully nudge that production back up”.
Crude-by-rail exports have picked up, rising in June to the highest monthly average since January. The legislation will formalize a moratorium on oil tanker traffic of a certain size. It will continue to push to get the expansion built. Industry advocate Robbie Picard held a poster calling the prominent environmentalist. Oil sands producer Cenovus Energy said last month it was “on track” to ramp up crude by rail shipments. Vancouver-based Teck Resources Ltd holds a 21.3 per cent interest in the Fort Hills oilsands. It increase at the same time that barrels are being produced to fill that capacity.
The government is taking the next step in shifting the former government’s crude-by-rail program. Canadian Pacific Railway expects crude-by-rail shipments to rise 20% this quarter versus the last. The result would be that Alberta producers would be able to get better prices. It is just another step in a process that has frankly taken too long. It introduced Premier Jason Kenney at the Calgary event. Pipeline companies are also finding ways to add some extra capacity to existing pipelines. Talks are taking place with the government and details aren’t yet known.
Still, stockpiles could swell again, now that oil sands facilities have finished seasonal maintenance. The Alberta Petroleum Marketing Commission has hired CIBC Capital Markets. Alberta enacted the program to cut oil output starting in January. Premier Jason Kenney told reporters earlier this month at the Global Petroleum Show in Calgary. The premier said Bill C-48 is particularly punitive because there’s no such ban. The Trans Mountain project triples the capacity of the existing line. The Kenney government aims to get its $30-million Calgary-based war room running this summer.
The local price for heavy Western Canadian Select has stayed strong relative to West Texas Intermediate. That’s about 200,000 barrels per day higher than the initial quota. Kenney has said one measure of the war room’s success would be improved public opinion. It will take more oil from Alberta to ports and tankers in B.C. It was just in the Bay of Fundy a week ago last week. Former premier Rachel Notley announced in February the province would spend $3.7 billion. The situation was blamed on the inability of pipeline capacity. Alberta Premier Jason Kenney says the B.C. Court of Appeal made it clear in May.
Kevin Birn, IHS Markit’s director of North American crude oil markets says “Producers were ramping up rail while the turnarounds were occurring”.
To incent further rail shipments that would deepen the inventory decline, heavy crude’s discount. The B.C. Court of Appeal’s unanimous decision was clear. It keep up with growing output from the oilsands. The province also announced Thursday it would ease its oil production curtailment program. The impact Assessment Act sets up a new authority to assess industrial projects. Kenney also urged the federal cabinet to take action on other fronts. Political observers say that requires crafting messages. It allowed under the curtailment program when it began in January. Albertans have contributed massively to the federation.
The U.S benchmark would need to widen from about $13/bbl now to $20/bbl. Kenney says the B.C. court action is a bid to limit Alberta’s oil resources. The curtailment program was to gradually be reduced and end by late 2019. It cited growing crude-by-rail capacity, declining oil inventory levels. The Senate had commendably made 188 constructive amendments to the bill. It get more oil to global energy market, such as accepting proposed amendments. Picard runs the Oilsands Strong Facebook page. The release makes no mention of a recent call by several producers. Alberta and B.C. have been battling for years over energy issues.
Last week, Imperial Oil said it would “ramp down” crude-by-rail exports. The production limit in August was set at 3.74 million bpd. It improved efficiencies in export pipelines for the move. The bill in its final form, is opposed by nine of 10 provinces. Trans Mountain was approved in 2016 when former Alberta premier Rachel Notley’s NDP was in power. Alberta has already passed a law allowing it to cut existing oil shipments to B.C. The first 10,000 bpd a company produces are exempt from production limits. Its Alberta terminal because oil prices were too strong to make it economic.