HOW WE GOT HERE

As politi­cians blame pipe­lines for Al­berta’s oil woes, we look back to see what led to Not­ley’s 8.7% manda­tory pro­duc­tion cut

StarMetro Calgary - - NEWS - Trevor How­ell STARMETRO CAL­GARY Kieran Leav­itt STARMETRO ED­MON­TON

CAL­GARY—Al­berta’s en­ergy min­is­ter was on the de­fen­sive Mon­day, fend­ing off ac­cu­sa­tions the NDP gov­ern­ment ig­nored or down­played warn­ings as early as this spring about the price-dif­fer­en­tial cri­sis now grip­ping the oil in­dus­try.

Shortly af­ter Premier Rachel Not­ley an­nounced on Sun­day a tem­po­rary cut in oil pro­duc­tion of 8.7 per cent — a bid, start­ing in Jan­uary, to re­duce the price gap and in­crease rev­enue — Al­berta Party Leader Stephen Man­del ac­cused the gov­ern­ment of sit­ting idly by as the dif­fer­en­tial widened.

“I’m not sure why any gov­ern­ment wouldn’t have a pro­gram in place that al­lowed the changes and the re­duc­tion and cur­tail­ment to hap­pen ear­lier rather than wait for as long as they have,” Man­del told re­porters.

While op­po­si­tion par­ties took aim at the NDP and the fed­eral gov­ern­ment, po­lit­i­cal ob­servers and in­dus­try watch­ers say the cur­rent cri­sis was decades in the mak­ing. They ar­gue suc­ces­sive Al­berta gov­ern­ments are to blame for ig­nor­ing ad­vice to pace oil­sands de­vel­op­ment and en­cour­age en­ergy com­pa­nies to upgrade and re­fine bi­tu­men into higher-val­ued petroleum prod­ucts.

In re­cent months, the price dif­fer­en­tial be­tween Al­berta crude, known as Western Cana­dian Select, and West Texas In­ter­me­di­ate has grown due to an over­sup­ply of oil and lack of pipeline ac­cess.

The dif­fer­en­tial is cost­ing the Cana­dian econ­omy an es­ti­mated $80 mil­lion a day, ac­cord­ing to the prov­ince.

En­ergy Min­is­ter Marg McCuaig-Boyd told re­porters Mon­day she wasn’t sure when the pro­vin­cial gov­ern­ment learned about the im­pend­ing dif­fer­en­tial cri­sis but main­tained the NDP took ac­tion im­me­di­ately.

“We’ve known that this has been an on­go­ing is­sue, this dif­fer­en­tial,” McCuaig-Boyd said.

“Not sure of the time­line, but it’s cer­tainly not like we sat back and did noth­ing.” About 35 mil­lion ex­tra bar­rels are wait­ing in stor­age due to a lack of pipeline ca­pac­ity. Read more at thes­tar.com/cal­gary

LARRY MACDOUGAL/THE CANA­DIAN PRESS

JA­SON FRAN­SON/ THE CANA­DIAN PRESS

Al­berta Premier Rachel Not­ley an­nounced on Sun­day a tem­po­rary cut in oil pro­duc­tion of 8.7 per cent, which is in­tended to re­duce the price gap and in­crease rev­enue.

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