‘Re­ally Out­ra­geous’

MP, Mayor and MLAS talk pipe­lines, oil pro­duc­tion cuts.

Fort McMurray Today - - FRONT PAGE - VIN­CENT MC­DER­MOTT vm­c­der­[email protected]­media.com

Fort Mc­mur­ray’s po­lit­i­cal lead­er­ship is sup­port­ing Pre­mier Rachel Not­ley’s week­end an­nounce­ment that oil­sands pro­duc­tion would be re­stricted in the face of the cur­rent oil price cri­sis. They also ar­gued the cur­rent sit­u­a­tion would have been avoided if new pipe­line projects had been built.

Dur­ing Mon­day in­ter­views, UCP MLAS Tany Yao and Laila Goodridge called the Sun­day an­nounce­ment to cut oil pro­duc­tion by 8.7 per cent a nec­es­sary evil, ar­gu­ing it would save jobs in the long-term.

Pro­duc­ers are mak­ing 190,000 raw crude oil and bi­tu­men bar­rels per day more than can be shipped out of Al­berta. Cuts will re­duce over­sup­ply by 325,000 bpd, even­tu­ally drop­ping to 95,000 bpd.

The plan be­gins in Jan­uary and ends Dec. 31, 2019. It is ex­pected to re­duce the dif­fer­en­tial by at least US$4 per bar­rel rel­a­tive to where it would have been oth­er­wise. About 25 pro­duc­ers are ex­pected to be im­pacted by the cuts.

UCP Leader Ja­son Ken­ney and Al­berta Party Stephen Man­del had al­ready made the case for cut­ting oil pro­duc­tion be­fore the NDP an­nounced its plans.

“This is a di­rect re­sult of the fail­ure to build pipe­lines in re­cent years,” said Goodridge, MLA for Fort Mc­mur­ray-con­klin. “It’s re­ally out­ra­geous our province has been brought to the point that this huge de­ci­sion had to even be con­sid­ered.”

Yao also blamed a lack of pipe­lines for the cur­rent oil price cri­sis, but ar­gued do­ing noth­ing would likely re­sult in more lay­offs within Wood Buf­falo and the oil­sands.

“Even though it’s against my val­ues of al­low­ing the free mar­ket to take its course… if they don’t do those re­duc­tions, we risk los­ing a lot of jobs,” said Yao. “My un­der­stand­ing is far more jobs will be lost if we al­low the mar­ket to take its course.”

Mu­nic­i­pally, Mayor Don Scott noted shares for sev­eral oil com­pa­nies rose the morn­ing af­ter the an­nounce­ment, in­clud­ing Cen­ovus and Cana­dian Nat­u­ral. The price of West­ern Cana­dian Select closed the same day at $27.95, 65 per cent higher over Fri­day.

“Any­thing that will see us get a bet­ter price for our prod­uct is a pos­i­tive step,” he said.

Scott also said the cuts would only be a short-term fix, and that all lev­els of govern­ment need to keep push­ing for the con­struc­tion of new pipe­line projects.

“I think we’ve be­come very fo­cused on one pipe­line right now, but it would have been ideal to have many pipe­lines in many dif­fer­ent direc­tions,” he said. “The sooner we get this pipe­line is­sue re­solved, the stronger this re­gion is go­ing to be in its ca­pac­ity to em­ploy peo­ple.”

In Ot­tawa, Fort Mc­mur­ray­cold Lake MP David Yur­diga said he was sup­port­ive of the an­nounce­ment if it had the sup­port of the oil in­dus­try fol­low­ing con­sul­ta­tions.

The cuts have the sup­port of Cen­ovus, Cana­dian Nat­u­ral and CNOOC-NEXEN. How­ever, they have been con­demned by Im­pe­rial Oil and Sun­cor.

Tim Mcmil­lan, pres­i­dent of the Cana­dian As­so­ci­a­tion of Petroleum Pro­duc­ers, said the an­nounce­ment showed how dire the sit­u­a­tion was for the oil­sands.

How­ever, Yur­diga says he is con­cerned some peo­ple may end up los­ing their jobs once the pro­duc­tion cuts be­gan.

“The lack of pipe­lines and loss of in­vest­ment in Canada to other ju­ris­dic­tions is still be­ing felt,” he said. “All this could have been avoided with En­ergy East and North­ern Gate­way, and now we see in­vest­ment leav­ing. How do we en­cour­age in­vest­ment when com­pa­nies have left?”


Stor­age tanks in the pri­mary ex­trac­tion plant at the Fort Hills oil­sands project on Mon­day, Septem­ber 10, 2018.

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