Alberta to purchase rail cars to move oil without feds: Notley

Alberta Premier Rachel Notley says her government will buy its own rail cars to transport more oil to market.

She says her province wanted co-operation from the federal government to buy them, but with Alberta oil prices just about at record lows, it can’t wait any longer.

“We will not stand by while we’re forced to give our resources away for pennies on the dollar,” Notley said. “This oil price differential is about real people with real bills to pay and real concerns about the future.”

While plans for pipelines are stalled, Notley wants other means to get the product from Alberta’s oilpatch to buyers.

The deal should be done within weeks and Alberta expects the two new train sets will mean an extra 120,000 barrels of oil can be moved every day.

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The province said this will narrow the oil price gap by up to $4 per barrel and is expected to generate more than $1 million per day in federal revenues.

But, the increased rail capacity isn’t expected to come online until late 2019 because of the time it takes to manufacture new tank cars and related facilities.

UCP leader Jason Kenney said that’s too long to wait.

“There you’re talking about maybe adding a couple hundred thousand barrels per day of production like a year from now,” he said. “We’re going to have a lot of companies that don’t make it six months from now.

“I’ve met industry leaders that are talking in the range, collectively, that there could be tens of thousands of layoffs in the first quarter of 2019, long before any government can add rail capacity.”

LISTEN BELOW: Jason Kenney joins the Ryan Jespersen Show on 630 CHED

He said he wants to work with the government to fast-track a new law that would order companies to implement a 10 per cent cut in production.

Kenney says that reductions to the output would bring Alberta’s oil markets “back into balance.”

Alberta Energy Minister Marg McCuaig-Boyd says her department is open to all ideas.

But she says opinion is divided on whether legislated cuts to oil production are the answer.

Notley says the world price of oil is low but Alberta is suffering even more because the oil it produces is stuck far away from refineries.

“There’s no excuse for Ottawa to not be at the table with us, but we cannot allow delays to continue.”

In a statement to 630 CHED, the press secretary for Natural Resources Minister Amarjeet Sohi said the federal government is committed to ensuring every barrel of Alberta oil gets its full market value.

“We are seeing some progress with increases to oil transport by rail and refineries in the U.S. back online, but we will not stand by idly,” Vanessa Adams wrote. “We will continue to work with Alberta and Saskatchewan through our working group.

“This group has been working hard, analyzing options including the oil-by-rail proposal that we have recently received from the Alberta government, to relieve the pain being felt by so many.”

The province said negotiations are underway so the financial details of the rail investment would not be released, but that the investment would be revenue neutral with the current pipeline construction schedule.

“I’d like to see the details,” Kenney said. “I think that increasing rail shipments is certainly part of the solution in the midterm. It doesn’t, however, address the immediate short-term crisis which I’m addressing here today.

“I think the government, in that announcement, acknowledges those rail cars would not be operational until about a year from now. And what I’m saying is we don’t have a year to wait.”

Meanwhile Greenpeace isn’t happy with the premier’s announcement.

Mike Hudema said new rail and pipelines pose increased risks for communities, the environment and our “shared climate” and that this move from the government increases the risk and danger.

“It was oil company execs who ignored the warning signs that new tar sands pipelines would not be built any time soon and overbuilt basing their projections on a climate-unsafe world,” Hudema said. “They created this situation and now Albertans are paying the price for it.”

The Alberta Petroleum Marketing Commission is handling the negotiations.

Notley is in Ottawa Wednesday to try to push the federal government to move faster, because Alberta’s problems are damaging the whole Canadian economy.

The B.C. government has responded to the announcement in a statement. B.C. Environment minister George Heyman says that British Columbians have told the government that they expect their interests to be looked at when it comes to how hazardous products are shipped through or near communities.

“We have already introduced new regulations to improve spill prevention, planning and response, and are actively developing regulations to better protect BC communities,” the statement reads. “We also have launched a reference case to confirm our authority to control the movement of heavy oils within our borders. We are taking action to make British Columbians safer in the face of risks of bitumen transport, whether by rail or by pipeline.”

– With files from the Canadian Press, Scott Johnston/630 CHED

WATCH: Global News Morning Calgary’s Doug Vaessen talks about the Alberta government’s plan to move oil by rail.

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