Oil price hurts "serious problem" for Canadian economy, says Notley

Alberta Premier Rachel Notley said the low price of western Canadian crude had become a serious problem for the country's economy, adding that her government was "furiously" looking for solutions.

But as the province and oil companies explore their options, Notley said the sector disagrees over the controversial call for his government to impose temporary cuts in production.

Although the province has an obligation to review everything, she added, she also wants to look for solutions to build consensus with similar results.

"The [price] The differential is obviously a very, very serious problem for the energy sector here in Alberta and, frankly, for the country's economy, "Notley told reporters on Thursday.

"We do not want [oil] get off the ground at $ 10 a barrel. So we have to find a way to reduce that differential and, as I said, a series of options are waiting for us right now. "

Cenovus Energy's chief executive, Alex Pourbaix, called on the Alberta government to impose temporary production cuts to help correct what he called an "emergency." (Jeff McIntosh / Canadian Press)

Western Canadian Select closed at US $ 13.46 per barrel on Thursday. Meanwhile, the US benchmark, West Texas Intermediate, closed at US $ 56.49.

"We have to work very, very quickly to fix it," Notley said. "We will have discussions and discussions with all actors on the most effective way to go forward."

Notley suggested that there would be answers "in a few weeks and maybe sooner."

The province is pushing Ottawa to support more crude shipments by rail. Last week, the province sent the federal government a business case for a proposed strategy.

"There is a whole range of partnership options with the federal government, but we are fully committed to being able to provide some kind of short-term solution with respect to rail transportation," Notley said. .

Oil prices in western Canada fell in September due to a backlog of oil in Alberta.

Oil sands production has increased throughout the year, but export pipelines are full and several refineries in the United States, which process heavy oil from Alberta, have been closed for maintenance.

These refineries are back online, but experts believe that low prices for Canadian heavy crude oil could persist until 2020.

According to one estimate, Alberta's energy sector would cost $ 100 million a day.

Richard Mbadon, a board member of the School of Public Policy at the University of Calgary, said the provincial government will be motivated to quickly find a solution. (Anis Heydari / CBC)

The situation prompted Cenovus Energy's CEO, Alex Pourbaix, among others, to ask the Alberta government to impose temporary production cuts in order to remedy what he called an "emergency".

However, other companies, including Suncor, Husky Energy and Imperial Oil, believe the market is working well and the government should not be involved in production cuts.

Richard Mbadon, a board member of the School of Public Policy at the University of Calgary, said the provincial government will be motivated to quickly find a solution.

He said the provincial and federal governments are probably losing tens of millions of dollars in revenue every day.

"As a province and as a country, we are losing a lot of money selling our products at prices well below market prices," said Mbadon, former president of the Alberta Petroleum Marketing Commission.

"Finding a way to quickly balance the market is going to be in the interest of all producers, and even refiners, to ensure that producers do not find themselves in financial difficulty.

"We are in an unprecedented situation."