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Energy minister touts effect of curtailment as limit increases

Curtailment is working. That’s the assurance of Energy Minister and Dunvegan-Central Peace-Notley MLA Marg McCuaig-Boyd as the Alberta government eases its limit on oil production for the next two months.

Industry output will be increased by roughly 75,000 barrels per day to 3.63 million, up from the January limit of 3.56 million. McCuaig-Boyd says the decision was made by looking at current levels of storage.

“We said from the beginning that we would look at this monthly to see and happily the storage levels are dropping down a little bit early so we can do this, and we’ll continue to monitor things monthly.”

The province says the storage glut has gone down by five million barrels to a total of 30 million barrels since the limit was announced in December 2018. Only 28 of Alberta’s more than 300 producers are affected, as the first 10,000 barrels per day a company produces are exempt from the cuts.

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Wednesday’s decision came as oilfield groups and companies expressed their fears about potential job losses stemming from curtailment. McCuaig-Boyd says industry feedback didn’t play a role.

“We discuss many things almost daily with industry, but we have been monitoring the storage levels and looking at how that plan’s going. Happily, that storage has drawn faster than we anticipated so we’re able to increase the production limits for February and March.”

The government has also changed its formula for how much production each company has to cut under the limit. Starting in February, it will use each producer’s highest level of production during their best single month from November 2017 to October 2018 as its baseline, instead of a company’s highest six-month average over the same time period.

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