Opposition blasts Notley over new oil differentials
Alberta Party leader says NDP sat idly amid crisis
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 observ- ers 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.
The mandatory curtailment would see the production of raw crude and bitumen slashed by 325,000 barrels a day in the New Year, with a 10,000 barrel per day exemption for smaller producers.
The province expects the reduction to fall to an average cut of 95,000 barrels per day by the end of 2019.