Notley says a deal is in the works to buy rail cars to transport Alberta oil
Premier Rachel Notley says her government is sticking to a plan to buy the means necessary to transport more than 120,000 barrels of Alberta crude per day to relieve the pressure facing the industry.
She told an audience at the Canadian Club in Ottawa about the plans to buy two new trains of oil tanker cars because of a glut of oil causing a backlog which, in turn, is driving down the price of oil.
The premier first mentioned the possibility during her last visit to Calgary, but now says that her government has begun talks with a third party to negotiate the sale of the trains.
“We anticipate a conclusion of the deal within weeks. Our costs will be fully recouped through royalties and the selling of shipping capacity. It makes sense.”
Notley also says there will be a number of benefits to having access to the unit trains to transport Alberta oil.
“It would narrow the oil price gap by around $4 a barrel, which would generate an additional $1M a day in federal revenues. It would provide our smaller producers with a more affordable option to move their oil to market.”
Notley says the purchase of rail cars is only a short and medium-term solution for the problem, where the long-term would be the construction of a pipeline. She added that pipeline projects, like the Trans Mountain pipeline, are sorely needed.
“We need every Canadian to understand that the federal government’s inability to build pipelines has a severe and mounting economic costs right now. What we are facing what can only be described as a crisis.”
She also spoke about the need to fix Bill C-69, the federal government’s bill to overhaul the way that energy projects are approved in Canada as well as Bill C-48, the legislation that forbids tanker traffic from the northern tip of Vancouver Island to Alaska.
Notley says she did not request a meeting with Prime Minister Justin Trudeau while she was in Ottawa and wasn’t offered one either.
Vanessa Adams, press secretary for the Minister of Natural Resources Canada, says that the government is doing all they can to make sure Alberta gets its fair share.
"We are focused on ensuring that every barrel of Alberta oil gets its full value. That is why our Government has made addressing this national issue - and increasing market access in general - an urgent priority."
Adams says they have continued to support Keystone XL and the Line 3 expansion project and helped producers to bolster refining capacity in Canada.
"On the Trans Mountain Expansion Project, we are moving forward in the right way through meaningful consultations."
The federal goverment also says it is analyzing a number of options, including the oil by rail proposal announced by Rachel Notley.
(With files from the Canadian Press)