Alberta premier says oil cut plan working, takes yuletide jab at prime minister

Premier Rachel Notley says her recent decision to cut oil production seems to be working.

And in a speech to northern Alberta leaders Thursday she also served up a little yuletide jab at the prime minister.

"It wasn't an easy decision," Notley said of the oil cut.

"But I believe that in the circumstances it was the right decision.

"At least so far we've seen the right result, but you never want to shut down production as an economic plan. It's counterintuitive. It's not a long-term solution."

Earlier this month, Notley 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, has bounced back in recent days and now trades at about US$25 less than the benchmark West Texas Intermediate price.

The oil cut program will exempt the first 10,000 barrels per day, to shield small producers. It will be reviewed monthly and is to end on Dec. 31, 2019.

Notley is also buying rail cars and continues to push Prime Minister Justin Trudeau for action to end the pipeline bottleneck, considered the primary culprit for the oil glut and low prices.

Alberta's long-term focus remains on the Trans Mountain pipeline expansion, to get more oil to the B.C. coast. The project was OK'd by Trudeau's government two years ago but is now in limbo as the feds respond to a Federal Court of Appeal decision that ordered a better examination of the impact on marine life and further consult with affected First Nations.

Notley has called on Trudeau to get Trans Mountain moving and also roll back on two bills now before Parliament — a northern B.C. coast tanker ban and changes to rules for energy megaprojects — which critics say will needlessly hamper energy development.

She has been critical of the federal government in recent days, particularly over Ottawa's resistance to join Alberta in purchasing extra rail cars.

Notley noted that Trudeau expressed concern earlier this week for Alberta's plight.

"He said his sympathy is with Alberta at Christmas because we're going through tough times," she said.

"'Quite the Christmas gift, his sympathy,' I thought to myself.

"I truly hope that he got a gift receipt with that little Christmas gift because I would like to exchange it for a pipeline."

Notley also crossed swords this week with Quebec Premier Francois Legault.

Legault has said there is no social appetite in Quebec right now to accept "dirty energy" from Alberta. Notley responded Tuesday, saying Legault "needs to get off his high horse," examine the environmental changes Alberta has introduced, and remember that the revenue helps fund infrastructure nationwide.

Manitoba Premier Brian Pallister waded into that fight Thursday, criticizing the feds for sitting on the sidelines.

"For one province to say 'We don't want that dirty energy' when it's their principle import, and to have the federal government say nothing in response, tells you the level of dysfunction is dangerous right now in this country," said Pallister.

— By Dean Bennett in Edmonton and Steve Lambert in Winnipeg

The Canadian Press