Oil producers in Alberta soon will be able to win exemption from curtailment limits for oil shipped by rail that hasn’t been nominated to pipelines.
The provincial government has announced a policy recommended by the producing industry to allow increased shipment of crude by rail in exchange for curtailment relief.
Responding oil values suppressed by pipeline congestion, the government since last year has set provincial output limits with cuts apportioned among producers and applicable to output above 20,000 b/d.
The provincial limits are 3.79 million b/d in October, 3.80 million b/d in November, and 3.81 million b/d in December.
Beginning in December, operators can apply monthly to Alberta Energy to increase oil production if the additional amount is moved out of the province by new rail capacity.
“The special allowance program will protect the value of our oil by ensuring that operators are only producing what they are able to move to market,” said Energy Minister Sonya Savage. “Pipeline delays ultimately have constrained market access and dampened investment in our oil sector.”
