Production limits tied to increased shipments of crude by rail

By Brian Konrad

Alberta providing relief to crude oil limits

Alberta easing curtailment limits as long as operators ship more crude by rail

Oct 31, 2019 | 7:21 AM

EDMONTON —The Alberta government will work with oil companies on a program that will allow them to produce more – as long as they agree to ship more of their crude by rail.

Industry approached the government with the proposal to ship more crude by rail in exchange for relief from production limits.

Energy minister Sonya Savage says the special allowance program will protect the value of Alberta oil by ensuring operators are only producing what they are able to move to market.

” Pipeline delays ultimately have constrained market access and dampened investment in our oil sector. This program will lead to more production and increased investment, benefitting industry, our province’s bottom line, and, ultimately, Alberta taxpayers.”

In a release, the province says many oil producers are capable of producing more than their curtailment limits permit and this allowance will enable operators to use all available rail capacity in Alberta.

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Government will work with operators to set the special production allowance baseline, which will be based off the operator’s Q1 2019 average rail shipment.