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Fort McMurray Today - - FRONT PAGE - CLARE CLANCY [email protected]­media.com

A train sits on tracks north of Sher­wood Park Free­way in Ed­mon­ton, Alta. Pre­mier Rachel Not­ley has an­nounced Al­berta will buy trains to move an an ad­di­tional 120,000 bar­rels per day out of the prov­ince, start­ing late 2019. The full com­ple­ment of rail cars would ship out in 2020.

Al­berta’s po­lit­i­cal lead­ers are push­ing dif­fer­ent plans to com­bat the oil price dif­fer­en­tial clob­ber­ing en­ergy pro­duc­ers, with Pre­mier Rachel Not­ley opt­ing for crude-by-rail and Op­po­si­tion leader Ja­son Ken­ney cham­pi­oning manda­tory in­dus­try cuts.

“We need the fed­eral gov­ern­ment at the ta­ble, treat­ing it like the cri­sis it is,” said Not­ley Wed­nes­day in a speech she de­liv­ered at the Cana­dian Club of Ot­tawa.

She an­nounced Al­berta will buy trains to move an an ad­di­tional 120,000 bar­rels per day out of the prov­ince, start­ing late 2019. The full com­ple­ment of rail cars would ship out in 2020.

Not­ley had asked Prime Min­is­ter Justin Trudeau to boost rail ca­pac­ity to pro­vide re­lief, but the fed­eral fi­nance min­is­ter hinted that Ot­tawa was lean­ing away from that op­tion.

Min­is­ter Bill Morneau, who was in Cal­gary Tues­day, said it would take at least nine months to in­crease rail ca­pac­ity, though didn’t flat-out re­ject the idea.

$80 mil­lion a day

The price dif­fer­en­tial between Western Cana­dian Se­lect and West Texas In­ter­me­di­ate has fluc­tu­ated in re­cent weeks, peak­ing at around $45 a bar­rel.

The prov­ince pegs the losses at around $80 mil­lion per day, though es­ti­mates vary. The Cana­dian As­so­ci­a­tion of Petroleum Pro­duc­ers es­ti­mated that the oil dif­fer­en­tial cost Canada at least $13 bil­lion in the first 10 months of 2018.

Crude-by-rail ship­ments al­ready in­creased to a record in Septem­ber — nearly 270,000 bpd — but the dif­fer­en­tial con­tin­ued to grow.

‘Stop the bleed­ing’

UCP Leader Ja­son Ken­ney called for 10 per cent gov­ern­ment-man­dated pro­duc­tion cuts across the board to curb the oil glut.

“Now we are vir­tu­ally giv­ing away … our oil and gas,” he said at a Wed­nes­day news con­fer­ence.

His views as a free mar­ket con­ser­va­tive have changed in the last two weeks, he said.

“I be­lieve gov­ern­ment in­ter­ven­tion in mar­kets should gen­er­ally be avoided, which is why I was ini­tially op­posed to the idea,” he said. “Vol­un­tary pro­duc­tion cuts are not suf­fi­cient to stop the bleed­ing.”

Ken­ney said the crude-byrail pro­posal isn’t an im­me­di­ate so­lu­tion, tak­ing a sim­i­lar po­si­tion to the Al­berta Party.

“The pre­mier is talk­ing about (buy­ing) rail cars, which is maybe a so­lu­tion … a year from now,” said Al­berta Party house leader Greg Clark. “They’re scram­bling.”

He added his party called for manda­tory oil cur­tail­ment 11 days ago — “I’m glad to see Ja­son Ken­ney fi­nally joined the party.”

Leg­isla­tive changes

Ken­ney out­lined a plan Wed­nes­day that in­cluded amend­ing the Mines and Min­er­als Act be­fore the end of the fall sit­ting, slated to fin­ish next week. He said by defin­ing crude bi­tu­men as petroleum un­der the leg­is­la­tion, Cab­i­net could then use its au­thor­ity to re­duce pro­duc­tion by about 400,000 bar­rels per day.

He also said cur­tail­ment reg­u­la­tions should in­clude a oneyear sun­set clause.

Clark said he’s not sure amend­ments to leg­is­la­tion are nec­es­sary.

Ear­lier this month, the prov­ince told Post­media that in­sti­tut­ing a quota sys­tem would be com­pli­cated due to free trade agree­ments and in­te­grated oil­sands op­er­a­tions.

Al­berta En­ergy Min­is­ter Marg Mc­cuaig-boyd said in­dus­try play­ers are “ex­tremely di­vided” on pro­duc­tion cuts and wouldn’t say whether the NDP will con­sider a leg­isla­tive change.

The prov­ince hasn’t closed the doors on any good ideas, she told re­porters Wed­nes­day.

Cen­ovus En­ergy Inc. CEO Alex Pour­baix said the pub­lic in­vest­ment in rail cars is en­cour­ag­ing.

“How­ever, it will likely take at least a year for these new rail cars to fully come on­line,” he said in a state­ment.

Pour­baix said a “grow­ing cho­rus of voices” have joined Cen­ovus in call­ing for tem­po­rary manda­tory pro­duc­tion cuts as a short-term so­lu­tion.

Crude-by-rail ne­go­ti­a­tions un­der­way

The Al­berta Petroleum Mar­ket­ing Com­mis­sion (APMC) is ne­go­ti­at­ing with rail man­u­fac­tur­ers and sup­pli­ers, and fi­nan­cial de­tails of a deal won’t be re­leased dur­ing talks, said a gov­ern­ment news re­lease.

The added rail ship­ments would nar­row the oil price gap by up to $4 per bar­rel. The plan wouldn’t af­fect agri­cul­tural prod­ucts as there would be no added com­pe­ti­tion for space on ex­ist­ing trains, said the re­lease.

“With the cur­rent pipe­line con­struc­tion sched­ule, this in­vest­ment would be rev­enue neu­tral,” it said, not­ing a min­i­mum three-year con­tract.

Not­ley, who is also slated to speak in Toronto Thurs­day, isn’t sched­uled to meet with Trudeau dur­ing her On­tario trip.

FILE PHOTO

DEAN BICK­NELL/POST­MEDIA NET­WORK

The sun sets on a roll of train tanker cars sit­ting idle along some rail­way tracks near a re­fin­ery in Fort Saskatch­wan, Alta.

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