Alberta Looks to Spur New Pipelines by Guaranteeing Barrels

By Robert Tuttle

Alberta’s government plans to directly dedicate barrels of oil for new pipeline projects in a bid to accelerate the expansion of production in the western Canadian province.

To support the construction of new pipelines, the province may dedicate barrels of crude it acquires from producers in lieu of cash as royalty payments or use oil that the government aggregates from smaller producers, Premier Danielle Smith said at a press conference on Monday with Enbridge Inc. Chief Executive Officer Greg Ebel.

Accelerating pipeline development would support the province’s goal of doubling its oil and gas production, Smith said.

“Our intention would be to provide that guarantee to show how serious we are about getting these lines built,” she said.

Alberta signed a letter of intent with Enbridge and will form a working group with the Alberta Petroleum Marketing Commission, which manages oil acquired as royalties, the province said Monday. The group will evaluate future “egress, transport, storage, terminalling and market access opportunities” across the Enbridge pipeline network to move more Alberta oil and gas to Canada and the US.

In addition to Enbridge, the province is in discussions with other pipeline companies about offering similar guarantees for new pipeline projects, and those guarantees would also extend to natural gas, Smith said.

Smith has been seeking to show Alberta as a reliable supplier of fossil fuels to the US, in an effort to reach out to the incoming Trump Administration, which is threatening to apply tariffs on Canada and Mexico.

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