Stop with the sympathy, take action, Notley urges Ottawa on oil prices

Rachel Notley and Prime Minister Justin Trudeau meet in Edmonton on Sept. 5 2018.
Jason Franson  The Canadian Press

Rachel Notley and Prime Minister Justin Trudeau meet in Edmonton on Sept. 5 2018. Jason Franson The Canadian Press

The statement goes on to say this is an extreme case in need of curtailment.

However, he says we should turn our eyes to the world stage.

The plan marks the first time the provincial government has ordered a production cut since the 1980s, and that previous move was meant to protest federal energy policies, not exclusively to boost prices.

Notley says as of January there will be an 8.7 per cent reduction ordered in oil production.

Natural Resources Minister Amarjeet Sohi is asking the National Energy Board to make sure Canada's oil pipelines are being used as efficiently as possible.

When both changes have taken effect, producers will no longer need Notley's mandatory production cut and should be able to efficiently send crude to the U.S. Increased crude by rail exports alone should result in Canada being able to send out an additional 450,000 barrels per day, Nutall said.

Its shares were up slightly Monday as it issued a statement saying its estimate of the impact of the provincial cuts will be provided when it issues its 2019 capital and production guidance.

"We're facing, I think, something that qualifies as a crisis, or very almost that, and there are no other tools available to the provincial government so given that the market or even coalition of players in the market can't do this on their own without running afoul of price fixing laws, this is something that makes a lot of sense for all of the parties but I give full credit, not just to the fact that they are agreeing on this, but that they're saying that they don't want this to be about partisan politics and they want it to be about the interests of Alberta and I have no question that Albertans want to see more of that kind of collaboration", she said.

The announcement is expected to narrow the differential by at least $4 per barrel and add an estimated $1.1 billion to government revenues in 2019-2020. The move was lauded by the chief executive officer of Cenovus, Alex Pourbaix.

Kenney, leader of Alberta's opposition United Conservative Party, said Saskatchewan should also cut production.

"I would like to commend Premier Rachel Notley and her government for making the hard but necessary decision to implement a temporary mandatory oil production cut in Alberta", he said in a statement.

About the only dissenting voice has come from Canada's integrated oil companies, whose refineries have been benefiting from the cheaper feedstock. About 35 million barrels is sitting in storage, and the oversupply results in the province's crude selling for around $10 a barrel, a fraction of what other world producers get.

Alberta's oil producers saw the beginning of such a rally on Monday as they led the Toronto Stock Exchange through early morning trading. That plan entails running two additional trains a day, each pulling 100 to 120 cars.

However, it was Notley's assurances that a decision on curtailing output was coming soon that helped boost heavy Canadian crude prices by 49 percent last week. At present, 97 percent of Canadian oil exports go to the US, which is awash with oil.

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