Rail strike, pipeline spill lead Alberta to extend oil curtailment levels

The Alberta government says it will leave its oil production quotas unchanged in January to deal with the lingering consequences after oil shipping was delayed by the Canadian National Railway Co. strike and the temporary shutdown of the Keystone pipeline following a leak in North Dakota.

A spokesman for Energy Minister Sonya Savage says producers were informed Tuesday that the production limit for January will remain at 3.81 million barrels per day, the same as December, after several consecutive months of easing quotas.

• Alberta lifts curtailment cap for new conventional oil wells
• Alberta eases oil curtailment for operators who ship extra barrels by rail

Production limits were enacted by the previous NDP government starting in January 2019 to better match supply levels with pipeline capacity and alleviate wider-than-usual local price discounts for Alberta oil blamed on high inventory levels.

The curtailment program was to expire at the end of 2019 but the United Conservative government extended it through 2020 while gradually increasing the amount that can be produced. The quotas now affect only the top 16 producers.

The province recently announced oil production from new conventional wells won't be subject to curtailment and producers who add crude-by-rail shipping capacity can also produce more.

Crude-by-rail exports from Canada rose to 310,600 bpd in September but remained short of the record 353,800 bpd set in December 2018.