Working group set up by NDP aims to get more oil shipped by rail

With pipelines facing continued uncertainty, the NDP government says more oil needs to be shipped by rail.

Energy Minister Marg McCuaig-Boyd said Wednesday that the province had formed a crude-by-rail working group to try to address the bottlenecks within the rail system.

The group includes representatives of energy companies such as Imperial, CNRL and Cenovus, as well as officials from CN and CP

railways.

“At the end of the day, we have to get more barrels moving any way we can,” McCuaig-Boyd told Postmedia in an interview.

“This is a group of people that will look at the issue and how can we work together to address it.”

With growing production capacity in the oilsands and continued roadblocks for new pipelines, producers have turned increasingly to rail over the past five years.

In a news release Wednesday, the U.S. Energy Information Administration said American imports of Canadian crude oil by rail set a monthly record of 205,000 barrels

a day in December of 2017.

“However, the outlook for increased volumes of Canadian crude oil shipped by rail to the United States is highly uncertain despite significant U.S. demand for Canadian crude oil, specifically on the U.S. Gulf Coast,” says the report.

“Large-scale and sustained increases in crude oil by rail volumes from Canada face several obstacles ... Canadian rail companies are requiring that crude oil producers enter long-term commitments for crude oil-by-rail capacity. Canadian crude oil producers have been reluctant to agree.”

Alberta’s NDP government is engaged in a brawl with its British Columbia counterpart over that province’s attempts to block the expansion of Kinder Morgan’s Trans Mountain line. While the development of Trans Mountain and overhaul of Enbridge’s Line 3 have received federal approval, other pipeline projects such as Northern Gateway and Energy East have fallen by the wayside.

McCuaig-Boyd announced the working group in a speech at the Argus Canadian Crude Summit on Wednesday, and it is expected to hold its first meeting Friday.