Oil production cuts could mean a positive return locally

By Ashley Wiebe
December 3, 2018 - 4:31pm Updated: December 3, 2018 - 7:19pm

 

MEDICINE HAT, AB — Premier Rachel Notley has come out with a short-term plan to help address the oil price differential hitting the province.

“Beginning on January 1st, the province of Alberta will mandate an across the board reduction of 325,000 barrels per day in production, or roughly 8.7 per cent,” she said, Sunday.

The idea is that the market will stabilize and help close the gap.

“I want to be clear,” she said, “this is a short-term measure.”

This follows a plan to purchase 7,000 rail cars to get Alberta’s oil to market.

Mayor Ted Clugston has already said the efforts are ‘too little, too late’.

“This is meant to be a short term fix to a very, very long term problem that has been in the making for years and years and years,” he said.

The move to cut oil production could be good for the city itself, being in the oil and gas business.

The amount of oil Medicine Hat produces is lower than the provincial cap, meaning work here will continue.

“What’s good for the residents is that if we can get more money for our oil and for our gas, it’ll be more money in the civic offers, which we’ve in the past have used as a dividend for property taxes or to build things like the Leisure Centre or Event Centre,” Clugston added.

The Medicine Hat and District Chamber of Commerce said this latest announcement by the Premier is a last resort.

“It shows that our regulatory system is broken and that we should have never have come to this,” said chamber president, Sarah MacKenzie.

MacKenzie and the Chamber are continuing to fight for amendments to Bill 69, while the city’s business sector moves ahead.

“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.

Clugston has said in the past that he supports pipelines, but isn’t convinced the Trudeau government understand the issue.

“I firmly believe that the federal Liberals don’t really care about Alberta and really don’t want pipelines built, or an increase in oil production. However, they have to play the game.”

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