Alberta bought railroad cars to support the supply of raw materials

Alberta Premier Rachel Notley delivered a speech in Ottawa on November 28, 2018.

Adrian Wyld / Canadian Press

Alberta plans to buy rail cars at the beginning of the new year to move another 120,000 barrels of oil per day from the province as it is considering challenges to reduce production to reduce demand for supplies that has caused Western Canadian oil prices to negotiate –

Prime Minister Rachel Notley is under pressure to find alternatives to oil transport in Alberta due to insufficient pipeline capacity. In addition to adding another volume of rail cars, it plans to provide incentives – including the provision of interruptions to future license fees – to companies that have now agreed to cut production. He even looks at mandatory production cuts across the industry. Such measures would reduce the supply offer that would allow the return of market oil prices.

Speaking Wednesday in Ottawa, Ms. Notley called on the federal government to support its government's move to buy raw cars and locomotives, but said the province would act alone if necessary, and close to concluding such an agreement. She says that oil trains would eventually add 120,000 barrels a day to exports, plus the current 350,000 barrels a day with the current raw material capacity by rail.

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"This investment is valuable not only from the deepest perspective but also as a safeguard against further gas pipeline delays," the prime minister said. "The federal government should be at the table, there is no justification for their absence."

Mrs. Notley said that gross prizes are "because Canada is deliberately holding Alberto's economy and the Canadian hostage economy" by failing to build a new pipeline.

In a letter sent almost three weeks ago, Mrs. Notley called on Prime Minister Justin Trudeau to respond to the crisis with the deep oil price collapse in Alberta and provide financial support for his plan to buy wagons.

On the question of the financing request in the middle of the Chair, the Chair asked questions from the Department of Natural Resources. Speaking by Amarjeet Sohi, natural resource ministers, federal officials are working with counterparts in Alberta to analyze crisis management options, including Miss Notley's proposal for crude rail production. "We are focusing on ensuring that every barrel of oil in Alberta gains full value," Vanessa Adams said in an e-mail statement.

Due to the lack of pipeline capacity and growing inventories in Alberta, Western Canadian crude prices have sharply declined compared to the key West Texas Intermediate (WTI) North American Intermediate (WTI) benchmarks, which since the beginning of October have fallen to $ 50.30 per barrel. Western Channel Select, which sold $ 41 a barrel in December, posted a $ 33.50 surcharge on Tuesday, according to NetEnergy, a Calgary-based company. The Simple Edmonton Raw – which is usually sold for a WTI premium – sold on Wednesday with a $ 25.25 discount, NetEnergy said.

Alberta, the leader of the United Conservatives, Jason Kenney, appeared yesterday at a new Democratic prime minister when she called on her government to force 13,000 major manufacturers to produce 200,000 barrels per day while freeing small companies from politics. These cuts would reach the estimated 200,000 barrels a day in discounts already announced by several oil sand companies, including Cenovus Energy.

"I'm a conservative free market," Mr. Kenney told journalists in Edmonton. "I think that government intervention in the markets should generally be avoided and that's why I was initially opposed to the idea of ​​compulsory curtailment when it was first released a few weeks ago, but after extensive consultations, I think it is necessary to take action."

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The Alberta government is still evaluating whether imposing a reduction in production or providing incentives to achieve voluntary reductions. She announces her plan "next week or so," Mrs. Notley said. It has verified that the options include some form of incentives associated with royalties, but added that there are many other approaches that are being considered.

"The industry itself is very complex, players are organized differently and their consequences are different for each of them, just like the copyright regime they act on," she said, "so we have to look at the whole picture."

Premier argued that additional rail capacity would raise prices for western Canadian oil by $ 4 a barrel and pay for itself over the next few years before the proposed extension of the Trans Mountain gas pipeline is completed. And that would serve as an insurance against another pipe delay, she said.

In the Chamber of Deputies, the opposition party of the Conservative Party launched an extraordinary debate Wednesday evening, arguing that the liberal government did not respond to the crisis that spreads out of Alberta and affects the economy of the whole country.

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