COVID-19 Updates: Protecting Albertans from the Omicron variant.
“The current curtailment policy will be allowed to expire on Dec. 31. This is good news for Alberta’s oil producers and the economy.
“Curtailment rules and production limits are not needed at this time. In fact, no production limit has been set or enforced since December 2020. The market is now working as it should: oil production has reached pre-pandemic levels but is within export capacity, and storage levels are expected to remain within the normal range of operations.
“This is in large part because Enbridge’s Line 3 is now online and operational and the Trans Mountain Expansion is expected to come online in early 2023.
“Oil production limits were intended to be a temporary measure when storage levels were high and there were significant pipeline constraints. This meant our province’s resources were being sold at an extreme discount. The curtailment policy aligned production with export capacity to protect the value of Alberta’s oil.
“However, the curtailment mechanism also created short-term operational and long-term investment uncertainty for the oil industry. The Alberta government is now providing operators with the confidence that production will not be limited moving forward. We will continue to monitor production, inventories, pipeline capacity and rail shipments to ensure that production does not exceed what the province can export. However, all forecasts indicate that the regulatory authority to curtail oil production is unnecessary as Alberta’s economy continues its strong recovery.”