Published: Fri, February 22, 2019
Finance | By Loren Pratt

UCP responds to province's crude-by-rail plan

UCP responds to province's crude-by-rail plan

APMC has also signed contracts to lease tank cars, and for the capacity to load crude into them.

It is also noted that the increase in oil cars will not have an impact on agricultural shipments.

Alberta Premier Rachel Notley is set to update the progress of negotiations to buy thousands of railcars to help transport the province's oil to market.

Jason Kenney, leader of Alberta's Official Opposition United Conservative Party, has vowed to review all contracts signed after February 1 to prevent Notley's NDP government from inking "sweetheart deals" in the lead-up to the campaign.

The province expects anticipated revenues of around $5.9 billion throughout the three-year program from commercial oil sales and increased royalty revenue.

"We plan to be government after the next election, but regardless we plan to ensure that outside of election cycles, the best interest of Albertans are taken care of", Notley said.

Prasad Panda, the energy critic for the opposition United Conservative Party, said his party would review any contracts signed leading up to the election.

The NDP government announced the multibillion-dollar, three-year investment despite the possibility an election could be called any day.

"We have said previously that we are not opposed in principle to using rail to get our product to market in the absence of much-needed pipelines".

"We are confident that this will turn out to be a good business decision for taxpayers", she said.

Contract details are unclear at this point.

Those differentials narrowed in early December when Alberta announced it would impose crude oil production curtailments starting January 1.

"Curtailment is not a permanent solution and it can not become a permanent solution".

Some producers have complained that the lower differentials make crude-by-rail shipments less profitable. That's because rail companies have an obligation to fulfil contracts they have already signed.

The National Energy Board says crude-by-rail exports from Canada reached a record high in December.

Notley said speculation that the Trans Mountain project could be further delayed was overblown as meaningful consultation with affected First Nations always had the potential to take longer than expected.

CN's Ruest said that the railroad "is now deploying important safety enhancing technologies, such as automated track inspection test cars, distributed air brake cars and automated train inspection portals".

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