Oil production limit

What’s going on

Alberta produced more crude oil in 2018 than could be shipped for export by rail or pipeline. This affected storage levels, Canadian crude oil prices and other aspects of the market.

To protect the value of our oil, the Government of Alberta temporarily limited production to match export capacity to prevent Canadian crude from selling at large discounts.

Due to continuing pipeline delays, oil production limits remain necessary through 2020. The curtailment policy has also been adjusted to give industry more flexibility to make timely business decisions and reduce red tape for small producers.

Production limits

The oil production limit has been extended to December 31, 2020, with possible earlier termination. This limit will be monitored closely and adjusted to better match export capacity.

Monthly production limits for raw crude and bitumen are set at:

• August: 3.74 million barrels per day
• September: 3.76 million barrels per day
• October: 3.79 million barrels per day

Policy changes

The following curtailment policy changes will take effect October 1, 2019:

• producers will be given 2 months notice of any changes to production limits
• base limit increases from 10,000 to 20,000 barrels per day
• energy minister can use discretion to set production limits after a merger or acquisition
• extend provision for single operator oil sands facilities minimum operations in winter to December 31, 2020 and include December

Industry information

The Alberta Energy Regulator administers the production limit on behalf of the government. The government’s authority to limit production ends December 31, 2020.

Under the formula that determines how space is allocated under the production limit, each company’s baseline production level is based on its highest level during their best single month from November 2017 to October 2018.

• production limits apply to both oil sands and conventional oil, it does not apply to pentanes or natural gas
• the first 10,000 barrels produced by each operator are exempt, this increases to 20,000 barrels on October 1, 2019
• refining operations can access the oil supply required to meet their refining needs as there is still significant oil available

An AER panel will review company-specific concerns and make policy recommendations back to the Government of Alberta. The panel can be reached at curtailment@aer.ca.

Industry information

• Presentation to Industry - December 6, 2018 (PDF, 455 KB)
• Curtailment rules presentation - February 8, 2019 (PDF, 784 KB)

Visit Energy Information Letters for all industry notices.

Timeline