By the end of 2020, the Government of Alberta plans to lift the limit on monthly oil production. Minister of Energy Sonya Savage confirmed Friday that curtailment will be lifted by December to let producers use available pipeline capacity in the hopes of creating jobs.
“Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis, and the need for pipelines,” she says. “This purposeful approach serves as an insurance policy, as it will allow Alberta to respond swiftly if there is a risk of storage reaching maximum capacity while enabling [the] industry to produce as the free market intended.”
The province says it is still extending its regulatory authority through to December 2021, but at this time doesn’t plan on setting any production limits. It’s noted 16 per cent of Alberta’s crude oil production is offline, down from 22 per cent at the start of the COVID-19 pandemic.
The former NDP government first started limiting oil production in January 2019 due to an oversupply that caused Canadian prices to fall well behind those in the U.S. The government says the changes were meant to be short-term, but delays to pipeline projects have led to their continuation.