Alberta sets legal wheels in motion to cut oil production

‘This is a national priority, so the more we can get on board the better’

EDMONTON — Alberta Premier Rachel Notley and her cabinet have put the legal wheels in motion to begin cutting oil production, while calling on the federal government to step up.

“We don’t actually need Ottawa’s sympathy. We need Ottawa’s full attention,” Notley said prior to a cabinet meeting Monday morning.

The meeting was called to hash out legal directives to give the Alberta Energy Regulator the power to direct oil producers to cut production by 8.7 per cent starting Jan. 1.

Notley said it will be a shortterm solution designed to be monitored and adjusted monthly as necessary. It ends on Dec. 31, 2019.

“We will continue to work with industry to make sure that this curtailment is done in a way that is most effective, and that is responsible, and ensures that we don’t curtail one extra drop more than we need to,” said Notley.

The market price for Alberta oil rebounded Monday, but the discount Canadian producers have to stomach compared with the price their U.S. counterparts get is still north of $30 a barrel.

The glut in reserves driving down prices needs to be addressed before producers begin taking more drastic steps such as slashing capital projects or laying off workers, Notley said.

Alberta Energy Minister Marg McCuaig-Boyd said they have also talked to Saskatchewan about the cuts and are working together to resolve the price quandary.

“This is a national priority, so the more we can get on board the better,” said McCuaig-Boyd.

“They’re in the same boat we are. They’re seeing the differential hurting their prices. It’s about jobs there. They’re not as big a player as us, but they’re still a player.”

Saskatchewan Premier Scott Moe said in a statement that the province isn’t considering following Alberta’s example.

Saskatchewan’s industry is conventional oil, not oilsands production, Moe said. A mandated cut would have little impact on price, but would prompt job losses and a decline in economic activity, he said.

“That said, we understand the actions being taken in Alberta and will be working with our industry partners to ensure Saskatchewan is not undermining these efforts,” said Moe.