• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 11 hours Shale Oil will it self destruct?
  • 6 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 1 hour Iran Captures British Tanker sailing through Straits of Hormuz
  • 56 mins Iran Loses $130,000,000 Oil Revenue Every Day They Continue Their Childish Games . . . .Opportunity Lost . . . Will Never Get It Back. . . . . LOL .
  • 10 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 15 hours Drone For Drone = War: What is next in the U.S. - Iran the Gulf Episode
  • 2 hours Renewables provided only about 4% of total global energy needs in 2018
  • 19 hours Today in Energy
  • 2 days Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 2 days Mnuchin Says No Change To U.S. Dollar Policy ‘As of Now’
  • 1 day Why Natural Gas is Natural
  • 1 day LA Solar Power/Storage Contract
  • 6 hours U.S. Administration Moves To End Asylum Protections For Central Americans

Canada Is Producing More Oil Than It Can Handle

Oil

Western Canada is producing 365,000 bpd more crude oil that current pipeline capacity can handle, a new report from the National Energy Board has revealed.

According to the authority, as of September this year, Western Canada produced a daily average of 4.30 million barrels of crude, while pipeline capacity stood at 3.95 million barrels per day.

Alberta, the largest oil producer in Canada, has turned to oil trains to offset the pipeline capacity shortage, and last month Premier Rachel Notley announced that the province will buy an additional 120,000 bpd in oil train capacity, to begin operating next year. It will reach full capacity in 2020.

Oil-by-rail shipments are already at a record high: in October, NEB said, these averaged 327,229 barrels per day, up by over 21 percent from the 269,829 barrels per day transported by rail in September. Although some familiar with the industry argue that shipping oil by rail is not as expensive as it may seem at first glance because the heavy Canadian crude does not need as much diluent as it would to be shipped via a pipeline, the current arrangement is not optimal according to the Albertan government.

This prompted Premier Notley to impose obligatory production cuts effective January 2019 and totaling 325,000 bpd until the excess oil in storage is cleared. The cuts will be reviewed on a monthly basis, and once the overhang is gone, they will be reduced to 95,000 bpd, to remain in force until the end of 2018. The glut clearing is estimated to take no more than three months.

Meanwhile, troubled producers are being late with their municipal tax payments and some are even foregoing these payments, which has so far resulted in losses in the tens of millions, according to a report by the Globe and Mail, which has created tensions between the industry and municipalities.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Sheikh Yerboutti on December 28 2018 said:
    You big government apparatchiks really know how to run businesses. Too bad about the taxes though. Oh well, you called the tune.

    Next up: government has to cover the payroll of "troubled producers."

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play