(Bloomberg) -- Alberta’s Premier Rachel Notley’s government is looking for ways to increase the volume of crude oil shipped out of Canada by rail amid a worsening pipeline bottleneck.
A list of strategies will be released in the next few days, she said at a press conference in Calgary Monday. Notley declined to say what those would include, but said the federal government already intervenes to regulate rail shipments of grain and other commodities and that more rail cars and locomotives need to be ordered. The announcement came as a lack of available space on pipelines out of Western Canada has contributed to record low prices for Canadian crude versus international benchmarks.
“At this point, we are going to put together the various different strategies to increase capacity on rail,” Notley said. “Money is being taken out of the Canadian economy and sucked into American bank accounts.”
A surge of crude supply this year from Alberta oil sands exceeded export capacity, forcing shippers to turn to rail cars. The move toward rail hasn’t been fast enough to keep prices from collapsing, with heavy Western Canadian Select’s discount to West Texas Intermediate futures reaching more than $50 earlier this month, the widest in data compiled by Bloomberg stretching back to 2008.
Canadian Pacific Railway Ltd. may match or exceed its record 2014 pace of 110,000 crude carloads next year, Chief Executive Officer Keith Creel said late Thursday in an interview from Calgary, where the company is based.
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