The government of Alberta, Canada announced today that starting in December, production limits on companies that produce oil will be raised, but any additional production must go by rail instead of pipelines. The announcement was made by Energy Minister Sonya Savage.
Savage said “The special allowance program will protect the value of our oil by ensuring that operators are only producing what they are able to move to market. Pipeline delays ultimately have constrained market access and dampened investment in our oil sector.” Alberta also said this effort would be temporary.
The baseline from which to raise crude production shipped by rail will be the amount shipped in Q1 2019. The current production limit for crude and bitumen produced in Alberta in December is 3.81 million barrels per day.
Both Canadian National and Canadian Pacific have reported they can handle additional crude shipments.
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