On the heels of her finance minister’s latest fiscal update, in which he spoke about Alberta’s oil price differential crisis, Postmedia websites published an op-ed penned by Premier Rachel Notley Friday evening, in which she says she plans to announce her course of action with regard to the oil price issue on Sunday.
“A decision needs to be made, one with real repercussions for working people and our entire economy,” Notley wrote. “We are in a position where we can’t move our oil because government after government in Ottawa has failed to build pipelines.
“Existing pipelines are full. Record amounts of oil are being shipped by rail, but nowhere near enough to reduce the backlog. As a result, more of our oil sits in storage than ever before: 35 million barrels worth.”
WATCH: The steep discount in Alberta’s oil crisis continues to hurt an already struggling energy sector. Premier Rachel Notley is set to make an announcement on Sunday to address the issue. Lauren Pullen reports.
Notley lamented that Alberta’s oil is being sold at “fire-sale prices” or about $10 per barrel and said other oil-producing countries are fetching five or six times more for oil.
“It’s absurd, economically dangerous, and cannot be allowed to continue,” she wrote.
WATCH: Trudeau says his heart goes out to those suffering over oil prices
In a news release, the Alberta government said Notley plans to hold a news conference in Edmonton at 6 p.m. on Sunday in which she will outline how her government plans to react to the fiscal dilemma.
Get weekly money news
In her op-ed on Friday, Notley did not say what options she was exploring, but wrote that the two primary modes of thought on how to deal with the problem are to either let the free market sort out what to do or to impose temporary government restrictions on how much oil can be produced in the province until the surplus supply of oil diminishes, closing the price gap.
READ MORE: Rachel Notley says Alberta is ‘essentially giving oil away for free’ in Toronto speech
WATCH: 2,000 Albertans protesting Justin Trudeau grew organically: Notley
Notley acknowledged that UCP Leader Jason Kenney and Alberta Party Leader Stephen Mandel want to see her government legislate a temporary cut in oil production and wrote that she wanted to “thank them for their contributions to this discussion.”
However, she wrote that although political leaders are nearing consensus on the issue, oil producers themselves remain divided on how to address it.
Notley’s government has said Alberta oil is fetching far less per barrel than in other regions of the world because of a supply glut and expanding inventories amid a pipeline bottleneck.
“Alberta’s energy industry drives the national economy, and a hit to Alberta’s bottom line is a hit to the Canadian economy,” Finance Minister Joe Ceci said Friday after releasing the second-quarter update for the provincial budget.
“The oil price differential is a crisis for Alberta and a crisis for Canada. The federal finance minister called it a national problem. I agree.”
READ MORE: Deficit revised to $7.5 billion but Alberta grapples with oil price differential
Watch below: Alberta Finance Minister Joe Ceci delivered the province’s second quarter fiscal update. So what does it mean for the province’s bottom line? Tom Vernon reports.
As Alberta’s NDP government continues to press for more pipelines and pipeline capacity, Notley announced earlier this week that her government is planning to buy rail cars to ship another 120,000 barrels of oil per day.
–With files from The Canadian Press
READ MORE: Pro-oil demonstration as natural resources minister speaks to Edmonton business leaders
WATCH: (from Nov. 29, 2018) Premier Rachel Notley made a case for Alberta’s pipelines while addressing the Toronto Region Board of Trade, saying “Canada willfully holds Alberta’s economy hostage.”
Comments