Sonya Savage

Alberta Energy Minister Sonya Savage

The Alberta government has finally lifted its temporary curtailment of oil production in Alberta.

The province has been setting monthly oil production limits since January, 2019, a move that received all-party support except the Freedom Conservative Party of Alberta.

“The limits were intended as a short-term measure, but ongoing delays to pipeline projects have led to the monthly production limits continuing through November 2020,” said the government in a Friday release.

“It will not set production limits due to 16 per cent of Alberta’s crude oil production remaining offline, down from 22 per cent at the start of the COVID-19 pandemic. At this time the Government of Alberta does not plan to resume production limits.”

The curtailment will be lifted at the end of December.

“Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis and the need for pipelines,” said Energy Minister Sonya Savage.

“This purposeful approach serves as an insurance policy, as it will allow Alberta to respond swiftly if there is a risk of storage reaching maximum capacity while enabling industry to produce as the free market intended.”

‘The completion of long-awaited pipelines – including Keystone XL, the Trans Mountain expansion, and Enbridge Line 3 – will enhance the province’s permanent ability to balance production and takeaway capacity, helping to ensure Alberta’s resources are exported at full value,” said the government release.

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“Government will closely monitor production, inventories, pipeline capacity and rail shipments to ensure that production does not exceed what the province can export. Current forecasts show that inventories are expected to remain low, with sufficient export capacity to allow the system to operate efficiently on its own well into 2021.”

Quick facts

  • In August, Alberta production was 3.10 million barrels per day, significantly less than the 3.81 million barrels per day curtailment limit.
  • According to Genscape, as of Oct. 16 inventories were at about 20 million barrels. When production limits were introduced in January 2019, inventories were approaching 40 million barrels.
  • Due to the economic effects of COVID-19, experts do not expect production in Western Canada to be above pipeline capacity before mid-2021 at the earliest, and rail and storage inventories are expected to remain low.
  • Prior to COVID-19, government had planned to exit curtailment by the end of 2020 provided export routes were in place, including the completion of Enbridge Line 3. Enbridge is proceeding with the final permitting process in the U.S. and estimates Line 3 will be in service in 2021.

News Editor & Calgary Bureau Chief

Dave Naylor is News Editor & Calgary Bureau Chief of the Western Standard based in the Calgary Headquarters. He served as City Editor of the Calgary Sun & covered Alberta news for nearly 40 years.

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