CALGARY (660 NEWS) – One political party is calling on Alberta’s government to take a “drastic step” and demand oil companies reduce production.
The Alberta Party’s Greg Clark says the current price of bitumen is creating a “national crisis,” calling for a royalty holiday until oil prices improve.
Clark says it would only be a short-term solution.
“Desperate times call for desperate measures,” Clark told 660 NEWS. “We are literally giving away our most valuable natural resource for free, I think it’s time for the provincial government to consider curtailing production for at least a short period of time, to increase prices and keep Albertans working.”
The Calgary-Elbow MLA says it’s not about sending a message: it’s about the economics surrounding supply and demand.
“If you reduce supply, you will increase the price,” he said. “What really needs to happen, longer-term of course, we need to build pipelines. We need them urgently, we’ve needed them for a long time and both the provincial and federal governments have really let us down in land-locking Alberta’s oil.”
He says the dramatic steps would ensure Albertans get the best oil prices possible.
“The differential in the price that Alberta gets is $40 lower than what we see as the headline price for WTI,” Clark said. “This week Alberta’s heavy oil was trading at $13 dollars a barrel… that is half the price of Coca-Cola at the same volume. It’s just insane that we’re getting so little.”
He knows restricting production would not be without consequences, but he said it would mean Albertans bring in more money for royalties and keep more people on the job.
“It’s a solution for the short-term, it wouldn’t go on for years and years, but this is something that many in the industry including Cenovus and CRL have called for,” he said.
Clark said he’s meeting with stakeholders in the meantime to ensure their concerns are heard while he pushes for the government to take action.