Sask. won’t follow Alberta with cut to oil production

The Saskatchewan government will not be following Alberta’s lead when it comes to cutting oil production in the face of plummeting prices.

Oil from western Canada has been selling at a steep discount due to a lack of pipeline capacity to ship it to buyers outside the U.S. That led Alberta Premier Rachel Notley to announce Sunday that production would be cut by 8.7 per cent in an effort to get prices back up.

Premier Scott Moe said Monday afternoon that he understands and supports the actions taken by the Alberta government to address the glut of oil, but the situation is different in Saskatchewan.

Moe pointed out the market for Saskatchewan oil is different from Alberta’s, because 60 per cent produced here is in the light to medium range, as opposed to the heavier product coming out of the oil sands.

He said the provincial government has been working on this problem for a while, and consulted with members of the oil industry in the province.

“They don’t feel it will actually be effective in narrowing the differential. And they feel it will cost jobs here in the province.”

Leader of the Official Opposition, Ryan Meili, was skeptical about those consultations, pointing out that in Alberta some companies supported the cuts. He also mentioned that, with the price differential between Western Canadian Select and West Texas Intermediate, some companies are making a lot of money in the refining side of the industry, even if they’re not making much in production.

Moe brought the federal government into the equation as well, saying the “unacceptably high” price gap was the result of the federal government’s inability to get pipelines built.

“Ultimately this is a challenge and a problem that is not going to be solved until we have access to our export markets, until we have proper pipeline capacity here in the nation, and until we have a federal government that is not putting headwinds in front of an industry that is important to all Canadians.”

He also took the opportunity to mention how he believes the carbon tax and Bill C-69 will negatively affect the industry across Canada.

Moe said the province will continue to advocate for the federal government to create a long-term solution by building pipelines so both provinces can “sell our oil for what it is worth.”

– with files from CJME’s Lisa Schick and the Canadian Press