Province eases oil production limits

Alberta has once again eased oil production limits, citing increased movement of crude by rail, declining inventory and improved efficiencies in export pipelines.

The move increases September production limits to 3.76 million barrels per day, an increase of 25,000 barrels from August.

Oil curtailment was part of a plan by the NDP to address the ballooning price gap between Western Canadian Select and West Texas Intermediate. The problem was that Alberta produced more crude oil and bitumen than could be exported by rail or pipeline, affecting storage and price differentials.

Former premier Rachel Notley announced the temporary curtailment program in December after the price differential peaked at around US$40 mid-november.

Notley said at the time Alberta would cut oil production by 8.7 per cent, with a targeted reduction of 325,000 bpd starting Jan. 1. Twenty-eight companies were affected.

A few months later, in February, she said the province would boost oil production by 25,000 bpd come April.

A news release issued by the province Friday said ministerial orders from Energy Minister Sonya Savage had been sent to all affected operators.

The first 10,000 barrels per day a company produces are exempt from production limits, meaning only 29 of more than 300 producers in Alberta are subject to the production limits.

Monthly production limits, in million barrels per day:

■ January – 3.56

■ February – 3.63

■ March – 3.63

■ April – 3.66

■ May – 3.68

■ June – 3.71

■ July – 3.71

■ August – 3.74

■ September – 3.76