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article imageAlberta scraps production limits to encourage more oil drilling

By Karen Graham     Nov 9, 2019 in Politics
Edmonton - The Government of Alberta, Canada, is now allowing curtailed operators to drill new conventional oil wells without being restricted by production limits. Existing producing wells will remain under curtailment.
In a statement on Friday, Alberta's energy minister, Sonya Savage says the adjustment on the curtailment rules goes into effect immediately and will drive positive investment, lead to increased drilling activity, and support economic growth in communities across Alberta.
"Companies are currently making investment decisions and we want those dollars and jobs to be in Alberta. We are doing everything we can to help," she said.
The new rules will apply to conventional wells and fracking, while non-conventional (or oil sands) production will remain under the curtailment rules. The adjustment is supposed to provide some flexibility for the industry while trying to maintain a balance between production and demand.
The former NDP government curtailed production due to a lack of pipeline capacity. Over-production last year created a slump in prices for Alberta oil producers. Added to the fall in oil prices, Enbridge's Line 3 pipeline replacement was pushed back a year, and will not be in service until the latter part of 2020.
"We have been told by producers that some of them, they could bring on hundreds of new wells but for the curtailment policy, so we'll hold them to their words to bring this activity on and create those jobs," Savage said, reports CTV News Canada.
According to the Canadian Association of Oilwell Drilling Contractors, each working drilling rig supports an additional 145 direct and indirect jobs. In response to the government’s announcement, Tim McMillan, president, and CEO, Canadian Association of Petroleum Producers, said: "The Canadian oil and natural gas industry has faced a number of challenges in recent years, particularly in relation to market access and attracting capital investment. We look forward to furthering technical details in regards to today’s announcement in terms of dealing with these challenges going forward."
More about Alberta Canada, Oil production, conventional wells, Investment, pipelines
 
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