Alberta vows to buy its own rail cars

Province moving ahead in effort to ship another 120,000 barrels of oil a day without federal help

OTTAWA— Alberta Premier Rachel Notley says her province is buying enough new rail cars to ship another 120,000 barrels of oil a day, without the federal government’s help.

The premier was in Ottawa Wednesday to deliver a speech steps from Parliament. She said she’s disappointed the federal government hasn’t even officially responded to her request to help buy more rail cars to make up for a shortage of pipeline capacity.

“The federal government should be at the table on this,” she said. “There’s no excuse for their absence.”

While she continues to press Ottawa to step up, she isn’t going to wait for that. Alberta has already started talks with a third party to buy enough rail cars and locomotives to put two more oil trains a day on the tracks, Notley said.

The details of exactly how many cars, who the negotiations are with to buy them and how much it will cost are being kept secret pending the outcome, but Notley said the deal will be final within weeks.

“Alberta’s energy industry and the hundreds of thousands of Canadians who depend on it deserve nothing less,” Notley said to a receptive audience at the Canadian Club, in a ballroom at the Chateau Laurier hotel.

The price for Alberta crude fell to about $10 a barrel Tuesday, Notley said, which is about $40 less than it should be getting when compared to other world oil prices because buyers are less interested in a product that’s stuck in Canada’s interior. She said a year ago, Alberta was losing about $40 million a day because of that difference. Now, with the price of Canadian oil plunging in recent weeks, that differential has grown to $80 million a day.

A spokesperson for Natural Resources Minister Amarjeet Sohi said the federal government has made the issue of market access for Alberta oil an “urgent priority,” and pointed to approval or support for three new pipelines or expansions, as well as the recent tax incentives in the fall fiscal update that will allow all manufacturers to write off the full cost of buying new equipment and machinery as soon as it goes into use.

“We are focused on ensuring that every barrel of Alberta oil gets its full value,” said Vanessa Adams, who added the government is still analyzing the oil by rail option proposed by Alberta.