February 14, 2025
Oil curtailment a 'bitter pill' that should end in 2020, says Kenney
There are signs progress is being made on the energy transportation front, allowing take-away capacity to catch up with oil production.
There are signs progress is being made on the energy transportation front, allowing take-away capacity to catch up with oil production.

The engine of the Alberta economy has been throttled back for the past 12 months because of government-imposed limits on oil production, but Premier Jason Kenney expects that “bitter pill” will come to an end in 2020.

In an interview, Kenney said the province intends to get off of the program that sets monthly output limits for the largest oil producers in Alberta. He sees “no realistic scenario” that would extend curtailment into 2021, although the situation will be closely monitored.

“I absolutely believe that we can no longer rely on curtailment, but we will keep a close eye on it,” Kenney said in a recent year-end interview.

“It’s our intention at this time next year not to use curtailment. It’s a bitter pill.”

The temporary initiative began one year ago under the former NDP government after oil prices in Western Canada crashed in late 2018 due to pipeline bottlenecks and rising production levels.

The limits were initially expected to be phased out by the end of last year, but were later extended by the UCP government through 2020 because of ongoing pipeline delays.

While curtailment has kept western Canadian oil prices from plunging again, it has also pushed new oilpatch spending to the sidelines.

Many industry players see curtailment as a necessary evil to keep the sector from being pounded by heavily discounted oil prices caused by a lack of transportation capacity.

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