Rail cars are pictured in Medicine Hat on February 11 - Photo by Colton McKee

By Charles Lefebvre

Province to offload crude-by-rail contract signed by NDP

Feb 11, 2020 | 2:04 PM

CALGARY, AB — Premier Jason Kenney says the provincial government will be divesting from the crude-by-rail contracts signed by the NDP one year ago.

The premier made the announcement during a news conference in Calgary Tuesday morning, saying the province is offloading the contracts to the private sector.

The deal was announced by NDP leader Rachel Notley in 2019. During the election, the United Conservative Party announced it would examine the project.

“We knew that this was something the private sector was willing to do, and should be doing at its risk, not at the expense of taxpayers,” Kenney said.

Kenney says the private sector is better equipped to deal with changes to the energy market than the provincial government, and says the decision will save taxpayers $500 million this year.

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He adds the decision will help attract additional investment to Alberta.

“By divesting all crude by rail contracts, an additional 120,000 barrels per takeaway capacity will come online,” Kenney said. “Facilities are already being used by industry to move crude oil.

“Having this additional capacity available to industry will help create the market conditions for companies to make positive investment decisions, such as increasing drilling or oil production to create more jobs.”

A total of 19 contracts are currently being negotiated for rail cars, loading and unloading capacity and other logistics. Kenney says companies involved cannot be named until the deals are officially signed. The Alberta Petroleum Marketing Commission, a provincial Crown corporation, is handling negotiations.

Kenney urges province to approve Frontier Mine

During the news conference, Kenney also once again urged the federal government to approve Teck Resources’ Frontier Mine project.

The project is a proposed 292- square kilometre open pit petroleum mining operation in northern Alberta. It’s expected to employ 7,000 people during construction. If approved and operational, it’s expected to produce 260,000 barrels per day and employ 2,500 people. The Alberta Energy Regulator and the Canadian Environmental Assessment Agency both recommended the project receive final approval in July 2019.

Kenney says a rejection of the project by the federal government will lead to a “swift and serious” reaction from Alberta.

“We have tried to find common ground wherever possible, and I hope this government will put politics aside,” he said.

Kenney added “If this prospective $20 billion investment is killed because of politics in the Liberal caucus room, as opposed to the objective application of environmental rules through a transparent regulatory process, it will send a chilling effect to global investors about the security of investing in this country.”

The federal government has until the end of February to make a decision.