Alberta to remove cap on crude oil production effective December
CALGARY -- Energy companies in Alberta will soon be permitted to produce as much as oil as they want as the province will lift curtailment in the coming weeks.
According to Alberta's ministry of energy, the provincial government will no longer set monthly production limits as of December in an effort to "utilize available pipeline capacity and create jobs."
"Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis and the need for pipelines," said Energy Minister Sonya Savage in a statement. "This purposeful approach serves as an insurance policy, as it will allow Alberta to respond swiftly if there is a risk of storage reaching maximum capacity while enabling industry to produce as the free market intended."
The curtailment lift comes as, according to the province, 16 per cent of Alberta's crude oil production is offline and current inventory in the province is nearly half of what it was early last year. Alberta had roughly 40-million barrels at the ready in January 2019. This month, inventory is approximately 20-million barrels.
The latest oil production numbers from the Government of Alberta show approximately 3.10 million barrels were produced each day in August, well below the curtailment limit set at 3.81 million barrels.
The province has also extended its regulatory authority to reintroduce production limits until December 2021.