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Alberta alters rules on oil production limits to spur more conventional drilling

Minister of Energy Sonya Savage listens while Premier Jason Kenney responds to the federal approval of the Trans Mountain Pipeline in Edmonton, Alberta, on Tuesday June 18, 2019. Alberta is adjusting its oil curtailment rules to give producers incentive to drill more conventional wells. THE CANADIAN PRESS/Amber Bracken

EDMONTON — Alberta’s energy minister says the government is adjusting its rules on oil production limits to give producers incentive to drill more conventional wells.

Sonya Savage says, starting immediately, any oil produced from a new well will not be subject to the rules.

Savage says the government expects the change will spur producers to drill hundreds of new wells and that each well will create about 145 jobs.

Due to pipeline bottlenecks, the former NDP government limited the amount companies could produce to prevent a surplus such as the one last year that sharply reduced prices for Alberta oil.

Production from new wells is expected to flow next year and into 2021.

Savage says the expectation is more pipeline capacity and expanded crude-by-rail will handle increased production so as not to have an impact on prices.

This report by The Canadian Press was first published Nov. 8, 2019.

The Canadian Press