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Canada

Crude-by-rail exports fall in January as Alberta started production cuts

Feb. 15, 2019: After oil companies started moving a record amount of Canadian crude using railroads, that's all come to a screeching halt. As Heather Yourex-West reports, companies say this mode of transportation is just too expensive.

The National Energy Board says crude-by-rail exports in January fell compared with December, but remained more than twice as high as 12 months earlier.

The federal agency reports an average of 325,500 barrels per day of oil was exported by rail in January, down from 353,800 bpd in December but well above 145,700 bpd in January 2018.

READ MORE: Record amount of Canadian oil exported by rail raises safety concerns

It says total crude oil exports by rail, pipeline and trucking fell to 3.49 million bpd in January from 3.92 million in December, but were higher than the 3.38 million bpd in January 2018.

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

Alberta enacted a crude production curtailment program as of Jan. 1 designed to keep 325,000 bpd off the market to clear up a glut of oil that had overwhelmed pipeline capacity and lowered prices. The curtailment level is to fall to about 175,000 bpd by June.

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About half of Canada’s crude-by-rail shipments in December were made by Calgary-based Imperial Oil Ltd.

The company cut its rail shipments in January and vowed to take them to near zero in February because of market reaction to the curtailment program.

READ MORE: Oil by rail shipments collapse amid Alberta government production cuts

Imperial says the curtailments resulted in narrower differences between prices for crude sold in Alberta and in the U.S. and thus impaired the economic case for paying rail fees to win better prices on the U.S. Gulf Coast.

WATCH BELOW (Jan. 30, 2019):Speaking in Calgary, Alberta Premier Rachel Notley discusses the future of her province’s curtailment on oil production.

‘We don’t want to curtail for any length of time’: Notley
‘We don’t want to curtail for any length of time’: Notley