Minister of Energy Sonya Savage said Alberta’s current oil supply management policy for producers will be allowed to expire on December 31. .“Curtailment rules and production limits are not needed at this time,” said Savage..“In fact, no production limit has been set or enforced since December 2020. The market is now working as it should: oil production has reached pre-pandemic levels, but is within export capacity, and storage levels are expected to remain within the normal range of operations.”.Curtailment rules were enacted on Jan. 1, 2019, to curb oversupply of crude oil in storage, resulting in a significant price differential between Western Canadian Select and West Texas Intermediate oil contracts..“The current curtailment policy will be allowed to expire on December 31. This is good news for Alberta’s oil producers and the economy,” said Savage. .“This is in large part because Enbridge’s Line 3 is now online and operational and the Trans Mountain Expansion is expected to come online in early 2023.”.Savage said limits on oil production were intended to be temporary measures “when storage levels were high and there were significant pipeline constraints.”.Curtailment rules were initially put in place to protect the value of Alberta’s oil by aligning production with export capacity.. “However, the curtailment mechanism also created short-term operational and long-term investment uncertainty for the oil industry,” said Savage..“The Alberta government is now providing operators with the confidence that production will not be limited moving forward. We will continue to monitor production, inventories, pipeline capacity and rail shipments to ensure that production does not exceed what the province can export..“However, all forecasts indicate the regulatory authority to curtail oil production is unnecessary as Alberta’s economy continues its strong recovery.”.Melanie Risdon is a reporter for the Western Standard.,.mrisdon@westernstandardonline.com
Minister of Energy Sonya Savage said Alberta’s current oil supply management policy for producers will be allowed to expire on December 31. .“Curtailment rules and production limits are not needed at this time,” said Savage..“In fact, no production limit has been set or enforced since December 2020. The market is now working as it should: oil production has reached pre-pandemic levels, but is within export capacity, and storage levels are expected to remain within the normal range of operations.”.Curtailment rules were enacted on Jan. 1, 2019, to curb oversupply of crude oil in storage, resulting in a significant price differential between Western Canadian Select and West Texas Intermediate oil contracts..“The current curtailment policy will be allowed to expire on December 31. This is good news for Alberta’s oil producers and the economy,” said Savage. .“This is in large part because Enbridge’s Line 3 is now online and operational and the Trans Mountain Expansion is expected to come online in early 2023.”.Savage said limits on oil production were intended to be temporary measures “when storage levels were high and there were significant pipeline constraints.”.Curtailment rules were initially put in place to protect the value of Alberta’s oil by aligning production with export capacity.. “However, the curtailment mechanism also created short-term operational and long-term investment uncertainty for the oil industry,” said Savage..“The Alberta government is now providing operators with the confidence that production will not be limited moving forward. We will continue to monitor production, inventories, pipeline capacity and rail shipments to ensure that production does not exceed what the province can export..“However, all forecasts indicate the regulatory authority to curtail oil production is unnecessary as Alberta’s economy continues its strong recovery.”.Melanie Risdon is a reporter for the Western Standard.,.mrisdon@westernstandardonline.com
