Notley proposes Ottawa get into crude-by-rail business
Posted October 22, 2018 4:31 pm.
Last Updated October 22, 2018 5:24 pm.
This article is more than 5 years old.
Alberta Premier Rachel Notley is proposing Ottawa get into the crude-by-rail business.
She says Alberta heavy oil producers have been dealing with a punishing price gap between their product and U.S. light oil.
Today, Ottawa announced they're writing off $2.6 billion paid to the auto-industry in Ontario…
Surely, they can support our oil industry with smart investments to help close the punishing price differential and get billions back in the Canadian economy.#KeepCanadaWorking #ableg pic.twitter.com/QrxxvDG5lC— Rachel Notley (@RachelNotley) October 22, 2018
She says that amounts to money being taken out of the Canadian economy and sucked into American bank accounts.
The differential is about US$40 a barrel and has been as high as $52 in recent weeks.
Notley says new coastal pipelines to get access to international markets are necessary in the long term to get Alberta producers a better price.
Notley calls this price gap a 'punishing differential'. Will hurt Ottawa's bottom line as well. For now, they can increase rail capacity to start. Need to build takeaway capacity
— Tom Ross (@Tommy_Slick) October 22, 2018
In the meantime, she says, Ottawa should look to invest in moving oil to market on rail cars.
“We are in the midst of putting together a specific business case that we’ll be taking to the federal government late this week, early next week, where we lay out the specific costs,” Notley said Monday after a meeting with oil and gas industry leaders.
She said more rail cars and locomotives are needed, but she didn’t have the potential number or cost at her fingertips.
On safety concerns over transporting oil by train. Notley says pipelines are the safest and most efficient, but thanks to federal inability on moving the resources, this is the only choice. "Not the best outcome"
— Tom Ross (@Tommy_Slick) October 22, 2018