Alberta government increasing rail capacity to transport oil

Investing $3.7 billion in increased rail capacity to generate about $5.9 billion over the next three years

The Alberta government has reached a deal with Canadian Pacific Railway and Canadian National Railway that will see an estimated 4,400 rail cars move up to 120,000 barrels of oil per day by 2020.

Rachel Notley
Rachel Notley

“Each and every Albertan owns our energy resources and deserves to get top dollar for them. We are taking decisive actions to protect people and to protect our natural inheritance. When challenges are placed in front of us, we overcome them. I’m going to keep working every day to fight for a better future for every person who calls Alberta home,” said Alberta  Premier Rachel Notley in a news release.

The government is investing $3.7 billion in increased rail capacity and it said it anticipates generating about $5.9 billion over the next three years through commercial revenue and increased royalty and tax revenues.

The government will purchase crude oil from producers and load it onto the rail cars at facilities across the province. The crude oil will then be shipped to market. These actions will help industry including small producers who may not have the ability to take this action on their own, added the government.

It said the move will result in about a US$4 per barrel reduction in the differential between West Texas Intermediate and Western Canadian Select from early 2020 to late 2021.

The first complement of rail cars are expected to start transporting Alberta oil in July 2019.

– Mario Toneguzzi 

rail oil

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