Oil company in Sask. happy with no production cuts

The Toronto Stock Exchange Broadcast Centre is shown in Toronto

The Toronto Stock Exchange Broadcast Centre is shown in Toronto

Canada's Federal Court of Appeal halted the contentious Trans Mountain pipeline expansion that would almost triple the flow of oil from the Alberta oil sands to the Pacific Coast - a setback that came just as the federal government bought the project to help ensure it gets built amid strong environmental and aboriginal opposition in British Columbia.

"We must act immediately, and we must do it together", she said in a speech Sunday at the Federal Building.

Dave is joined by Calgary Herald business columnist Chris Varcoe.

This imbalance between production and export capacity has led to a near collapse in the benchmark price for Canadian heavy oil and even steep discounts in the price of Canadian light oil compared with West Texas Intermediate.

This follows a plan to purchase 7,000 rail cars to get Alberta's oil to market. Notley's challenger in next year's election for premier is now trumpeting his support for mandatory production cuts.

David MacNaughton says no one in the US government has raised Alberta Premier Rachel Notley's move with him.

The result has been oil prices for Western Canadian Select so low the province's energy resources are "being sold for pennies on the dollar", she said.

Alex Pourbaix, chief executive officer of oil-sands producer Cenovus, which may have to shut in about 35,000 barrels a day of production, said the industry is not happy to have the government so involved in the industry but realized that the curtailment plan was the only way to avoid "disaster".




Clugston has said in the past that he supports pipelines, but isn't convinced the Trudeau government understand the issue.

When it comes to market failures - which Notley spoke of Sunday and Kenney did recently, too, to justify interfering in the market - the problem is that the biggest market failure of all is climate change. In 1980, then-Premier Peter Lougheed forced cuts to protest a national energy program that he said would have harmed the province's oil industry.

Notley says as of January there will be an 8.7 per cent reduction ordered in oil production. Alberta's Premier Rachel Notley the deal could be concluded within a few weeks and could cost C$350 million (US$263 million).

A weekend 90-day ceasefire between the USA and China on imposing higher tariffs was a catalyst for global markets to rise even though a final resolution is far from certain, Fehr said in an interview. Whitecap Resources Inc. wasn't part of these consultations, but Fagerheim said he admires how much the provincial government does consult with the industry.

While the government isn't helping with the rail vehicle purchase and had no new funds for oil and gas in its fall fiscal update, Natural Resources Minister Amarjeet Sohi did reveal on Friday that he had asked the National Energy Board to evaluate whether Canada's pipelines are being used to their full capacity. The province expects the curtailment to affect about 25 producers.

The province pegs losses due to the oil discount at around $80 million per day, though estimates vary. It has said it is insulated from price discounts because of its Canadian refineries and pipeline contracts.

Oil prices have been sagging, with US crude recently dipping to near $50 a barrel on renewed oversupply fears.

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