Production curtailment,market access,pipeline capacity
Imperial’s Kearl oil sands mine. Photo courtesy Imperial.
In the News

Alberta government ends production curtailment

Production limits set in 2018 will expire at the end of 2021.

Effective December 31, 2021, the Government of Alberta will lift the oil production curtailment that was imposed in December 2018.

Construction of the Enbridge Line 3 Pipeline.

The curtailment program was set in response to widening differentials between crude oil produced in Alberta versus the North American price benchmark, West Texas Intermediate (WTI). Production limits, mainly focused on the oil sands, were meant to match oil production with export capacity – in other words, producers could only produce oil to fill available space in pipelines. And because pipeline capacity was very limited, production volumes had to be decreased.

The government had already stopped setting monthly oil production limits in 2020, allowing producers to make use of increasing pipeline capacity. Now, with Enbridge Line 3 pipeline in service and the Trans Mountain Expansion Project pipeline expected to be completed and in service in early 2023, the government says the need for production curtailment has passed.

The government says it will keep watching production, inventories (the volume of oil in storage in Alberta), pipeline capacity and rail shipments to make sure production does not exceed what the province can export, which would again widen the gap between the price for Alberta’s production and WTI.