February 1, 2019 4:39 pm

CNRL says oil curtailment adjustment will keep ECHO pipeline going and save Alberta jobs

WATCH ABOVE (Jan. 30): Speaking in Calgary Wednesday, Alberta Premier Rachel Notley discusses the future of her province’s curtailment on oil production.

A A

Workers in eastern Alberta are breathing a sigh of relief Friday after CNRL said the province easing the oil production cap means it can keep the ECHO pipeline running.

“Following the Government of Alberta’s announcement of production limits easing for February and March 2019, Canadian Natural’s curtailment volume for February 2019 will be reduced,” CNRL spokesperson Julie Woo said in an email to Global News.

Story continues below

“With this increase in allowable production, Canadian Natural will be able to maintain production at levels to safely operate the ECHO pipeline.

“Keeping the ECHO pipeline and associated heavy oil production operating means that we will be protecting up to 2,400 jobs for contractors and service providers in the region,” Woo said.

“Canadian Natural continues to support the Government of Alberta’s decision to curtail production as a strong measure to protect the value of Canada’s resources and protect jobs, provided that curtailments are implemented in an equitable, transparent and reasonable manner.”

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

Effective Jan. 1, the Alberta government ordered production of raw crude oil and bitumen to be reduced by 325,000 barrels per day (8.7 per cent) to deal with low prices.

On Jan. 22, a letter from oil producer Canadian Natural Resources Ltd. said the NDP government changed the formula by which it determines how much oil production must be curtailed for February, and the change would mean possible layoffs. The company said the ECHO pipeline would “need to be shut-in along with the production associated with it.”

Workers in several communities in eastern Alberta said stopping the ECHO pipeline would threaten up to 1,000 jobs in the Bonnyville/Elk Point/Lloydminster area.

The general manager of Jacknife Oilfield Services in Bonnyville said he, his employees and contractors were taking it day-by-day. Kurt Muller said the majority of Jacknife’s contracts are with CNRL.

READ MORE: Eastern Alberta communities fear NDP’s oil production cap change will mean job losses

After hearing the update from CNRL on Friday, Muller was thrilled.

“It’s fantastic. It’s not only good for Jacknife and our 80 workers, but it’s fantastic to hear for the community of Bonnyville, Elk Point, Lloydminster.

“The fact that the ECHO pipeline is staying open brings a lot of happiness,” Muller said.

READ MORE: Federal government needs to ‘step up’ and support Alberta’s oil and gas industry: Notley

He believes curtailing oil production was the right call in light of the brutal oil price differential. The impact of less production though, was hard.

“The curtailment definitely impacts our business because with the restrictions in the amount of oil they [CNRL] can ship or if they’re holding back in a particular month, it means that we don’t have a very steady volume,” Muller said. “It’s very up and down.

“However, their decision to curtail is obviously the correct one if it’s closing the differential. There’s nothing worse than having West Texas way higher than your Canadian Select and it not being viable for the Canadian oil companies to ship oil at all.

“We’ll take the curtailment over that any day,” he said.

Effects of the province easing the oil production limit are giving associated industries a bit more stability and optimism.

“There’s a lot of people that are going to be sleeping easy tonight,” Muller said. “I think Feb. 1 was this big dark cloud over all of us.

“I’ve got a lot of calls, concerned people in and out of my office, so for me to provide them that comfort gives me great satisfaction, and then as well, in the wider community I think it’s a hugely positive thing.”

WATCH BELOW (Jan. 29): A company that was at first in support of Alberta’s oil curtailment plans is now expressing concern. Workers and community leaders in Bonnyville are warning of impacts on jobs. Vinesh Pratap reports.

© 2019 Global News, a division of Corus Entertainment Inc.

Report an error

Comments

Want to discuss? Please read our Commenting Policy first.