Alberta
Alberta takes decisive action to get more oil to market
February 19, 2019
A historic rail deal between Canadian Pacific Railway, Canadian National Railway and the Government of Alberta means all Albertans will get a better price for our energy resources.
Premier Notley announces Alberta’s new investment in crude-by-rail export capacity.
This strategic investment by the Alberta government will see an estimated 4,400 rail cars move up to 120,000 barrels per day by 2020. Albertans can look forward to seeing rail cars transport Alberta oil as early as July 2019.
This is another part of our Made-in-Alberta energy strategy – building on Alberta’s energy strengths to get more value from our resources and create more jobs.
“Each and every Albertan owns our energy resources and deserves to get top dollar for them. We are taking decisive actions to protect people and to protect our natural inheritance. When challenges are placed in front of us, we overcome them. I’m going to keep working every day to fight for a better future for every person who calls Alberta home.”
In 2018, Premier Notley laid out short, medium and long-term plans to get top dollar for Alberta’s energy resources. In the short term, the province temporarily curtailed oil production to address the storage glut. Over the long-term, the Premier continues to fight for pipelines and today’s rail deal means Alberta can expand take-away capacity over the medium term.
This investment in increased rail capacity totals about $3.7 billion. With the anticipated commercial revenue and increased royalty and tax revenues, the province anticipates generating approximately $5.9 billion over the next three years.
The Government of Alberta will purchase crude oil from producers and load it onto the rail cars at onloading facilities across the province. The crude oil will then be shipped to market. These actions will help industry including small producers who may not have the ability to take this action on their own.
In developing its Crude-by-Rail strategy, the Alberta government has also taken care to ensure that additional rail cars carrying oil will have no impact on the shipments of agricultural products.
Quick facts
- $3.7B investment provides Albertans with $5.9B in revenues over three years.
- Approximately US$4 per barrel reduction projected in differential between West Texas Intermediate and Western Canadian Select from early 2020 to late 2021.
- Additional 120,000 barrels a day of rail capacity is anticipated by 2020.
- 4,400 rail cars will be used to transport oil. The first complement of rail cars are expected to start transporting Alberta oil in July 2019.
- Rail cars include DOT-117J and DOT-117R models, which meet all current safety standards outlined by Transport Canada.
From the Canadian Energy Centre
By Will Gibson
Alberta oil sands projects poised to grow on lower costs, strong reserves
As geopolitical uncertainty ripples through global energy markets, a new report says Alberta’s oil sands sector is positioned to grow thanks to its lower costs.
Enverus Intelligence Research’s annual Oil Sands Play Fundamentals forecasts producers will boost output by 400,000 barrels per day (bbls/d) by the end of this decade through expansions of current operations.
“Existing oil sands projects deliver some of the lowest-breakeven oil in North America at WTI prices lower than $50 U.S. dollars,” said Trevor Rix, a director with the Calgary-based research firm, a subsidiary of Enverus which is headquartered in Texas with operations in Europe and Asia.
Alberta’s oil sands currently produce about 3.4 million bbls/d. Individual companies have disclosed combined proven reserves of about 30 billion barrels, or more than 20 years of current production.
A recent sector-wide reserves analysis by McDaniel & Associates found the oil sands holds about 167 billion barrels of reserves, compared to about 20 billion barrels in Texas.
While trade tensions and sustained oil price declines may marginally slow oil sands growth in the short term, most projects have already had significant capital invested and can withstand some volatility.
Cenovus Energy’s Christina Lake oil sands project. Photo courtesy Cenovus Energy
“While it takes a large amount of out-of-pocket capital to start an oil sands operation, they are very cost effective after that initial investment,” said veteran S&P Global analyst Kevin Birn.
“Optimization,” where companies tweak existing operations for more efficient output, has dominated oil sands growth for the past eight years, he said. These efforts have also resulted in lower cost structures.
“That’s largely shielded the oil sands from some of the inflationary costs we’ve seen in other upstream production,” Birn said.
Added pipeline capacity through expansion of the Trans Mountain system and Enbridge’s Mainline have added an incentive to expand production, Rix said.
The increased production will also spur growth in regions of western Canada, including the Montney and Duvernay, which Enverus analysts previously highlighted as increasingly crucial to meet rising worldwide energy demand.
“Increased oil sands production will see demand increase for condensate, which is used as diluent to ship bitumen by pipeline, which has positive implications for growth in drilling in liquids-rich regions such as the Montney and Duvernay,” Rix said.
“If Ottawa had it’s way Albertans would be left to freeze in the dark”
The ineffective federal net-zero electricity regulations will not reduce emissions or benefit Albertans but will increase costs and lead to supply shortages.
The risk of power outages during a hot summer or the depths of harsh winter cold snaps, are not unrealistic outcomes if these regulations are implemented. According to the Alberta Electric System Operator’s analysis, the regulations in question would make Alberta’s electricity system more than 100 times less reliable than the province’s supply adequacy standard. Albertans expect their electricity to remain affordable and reliable, but implementation of these regulations could increase costs by a staggering 35 per cent.
Canada’s constitution is clear. Provinces have exclusive jurisdiction over the development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. That is why Alberta’s government is referring the constitutionality of the federal government’s recent net-zero electricity regulations to the Court of Appeal of Alberta.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations. The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk. Our government will not accept unconstitutional net-zero regulations that leave Albertans vulnerable to blackouts in the middle of summer and winter when they need electricity the most.”
“The introduction of the Clean Electricity Regulations in Alberta by the federal government is another example of dangerous federal overreach. These regulations will create unpredictable power outages in the months when Albertans need reliable energy the most. They will also cause power prices to soar in Alberta, which will hit our vulnerable the hardest.”
Finalized in December 2024, the federal electricity regulations impose strict carbon limits on fossil fuel power, in an attempt to force a net-zero grid, an unachievable target given current technology and infrastructure. The reliance on unproven technologies makes it almost impossible to operate natural gas plants without costly upgrades, threatening investment, grid reliability, and Alberta’s energy security.
“Ottawa’s electricity regulations will leave Albertans in the dark. They aren’t about reducing emissions – they are unconstitutional, ideological activist policies based on standards that can’t be met and technology that doesn’t exist. It will drive away investment and punish businesses, provinces and families for using natural gas for reliable, dispatchable power. We will not put families at risk from safety and affordability impacts – rationing power during the coldest days of the year – and we will continue to stand up for Albertans.”
“Albertans depend on electricity to provide for their families, power their businesses and pursue their dreams. The federal government’s Clean Electricity Regulations threaten both the affordability and reliability of our power grid, and we will not stand by as these regulations put the well-being of Albertans at risk.”
Related information
- Conference Board of Canada socio-economic Impacts of Canada’s 2030 Emissions Reduction Plan – (April 2025)
- Alberta Electric System Operator’s position on Canadian Energy Regulations
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