Maximize existing pipelines’ efficiency to help with oil glut, federal minister says

Natural Resources Minister Amarjeet Sohi is asking the National Energy Board to make sure Canada’s oil pipelines are being used as efficiently as possible.

READ MORE: Alberta orders 8.7 per cent oil production cut to help deal with low prices

The market price for Alberta oil rebounded Monday, a day after Premier Rachel Notley announced plans to cut production by almost nine per cent in January to deal with a glut of oil that can’t be moved to buyers, but the discount Canadian producers have to stomach compared to the price their U.S. counterparts get is still north of $30 a barrel.

READ MORE: Suncor assessing impact of Alberta’s move to cut oil production 8.7% next year

Sohi says he shares the Alberta government’s frustration about the oil-price crisis and has asked the National Energy Board to report as soon as possible on the capacity of the existing pipelines in Canada, with a view to using them to move more oil and related products.

Sohi told a business audience Friday morning that he has asked the NEB to report back on how much oil is flowing through Canada’s pipelines. He wants to find out if they can handle more capacity.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Sign up for weekly money newsletter Sign Up

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

“Is there room for us to ship more oil through pipelines that already exist? And is there a way to optimize that capacity?”

READ MORE: Federal minister Sohi asks NEB for pipeline inventory in order to find more capacity

Sohi says the status quo on Canadian oil shipping simply cannot continue.

READ MORE: Alberta unveils ‘real-time lost-revenue counter’ amid pipeline delays

But the minister is defending his government’s record on pipelines and the oil industry, noting the recent $4.5-billion purchase of the Trans Mountain pipeline in a bid to get it expanded despite political controversy. He said the federal government supports both the Keystone XL pipeline and the replacement of Enbridge’s Line 3 pipeline.

The government has not yet made a decision about whether it will contribute anything toward Alberta’s purchase of new rail cars so two more trains a day can transport crude from Alberta to refineries in Canada and the United States.

READ MORE: New pipelines are the answer to oil price problems: Natural Resources minister

Meanwhile, federal Conservative Leader Andrew Scheer says Alberta’s decision to order a cut in oil production is a direct result of Prime Minister Justin Trudeau’s failure to get Canadian energy to market.

Scheer says there were three pipeline projects in the works when Trudeau became prime minister, and none have come to fruition.

He says a Conservative government would ensure pipelines are built by having clear and consistent rules for development, and a special ministerial representative to consult with Indigenous communities about such projects.

— With a file from Global News’ Scott Johnston