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Government of Alberta to up oil production limits

Mar 18, 2019 | 7:24 PM

The Government of Alberta announced Monday afternoon that it is increasing oil production limits.

Limits are based on monitoring a number of indicators and recognizing that less diluent is needed in warmer weather for bitument to flow in pipelines, meaning more capacity, according to a release.

Starting in May, limits will increase by 25,000 barrels a day, then another 25,000 in June. The increases will bring the total barrels allowed per day to 3.71 million.

“As we increase production, we’re providing even more certainty for producers who have been working with us to protect the jobs and livelihoods of thousands of Alberta families and businesses,” says Premier Rachel Notley.

“This temporary policy has been critical to reducing the oil price differential while we move ahead with our medium-term plan to ship more oil by rail and lead the long-term charge for new pipelines as we fight to get full value for the resources owned by all Albertans.”

The province still plans on initiating its crude-by-rail program this July, ramping up to 120,000 barrels a day shipments by 2020.

In the meantime, the release states, Alberta will continue to fight for new pipeline construction, both to other places in Canada, as well as to the USA.

It was in December that Notley announced a temporary 8.7 per cent curtailment to oil production, or a decrease of 325,000 barrels per day. Once the latest changes take effect, limits will have increased by 150,000 barrels a day since the original decrease was put in place on Jan. 1.