SLAVE LAKE, Alta. – Alberta Premier Rachel Notley says the decision to cut oil production seems to be working, but says it’s not a long-term solution.
Notley has ordered companies to cut production by almost nine per cent starting in the new year to close the price gap between Alberta oil and the North American benchmark.
That price gap was growing so wide that vast reserves of oil were building up in Alberta and the price was falling through the floor, leading to fears of massive job cuts and project closures.
The differential, which was over US$50 at one point this fall, has bounced back in recent days and now trades at about US$25 less than the benchmark West Texas Intermediate price.
Notley is buying rail cars and continues to push Prime Minister Justin Trudeau for action to end the pipeline bottleneck, considered the primary culprit for the low prices.
Trudeau said this week his sympathy is with Alberta this holiday season, but Notley says she hope that comment comes with a gift receipt so she can trade it in for a pipeline.