The Alberta provincial government has lifted production limits on new conventional oil wells in an effort to boost its economy.
The change, which take effect immediately, lifts production curbs that too effect on January 1 of this year to reduce a glut of oil that was held in storage and lift prices. The Alberta government now says that oil companies can produce additional crude oil if they move it by rail.
Alberta, which is home to most of Canada’s oil production, has been hurt by layoffs from major oil producers and service companies that drill wells. The Alberta government said recently that its budget deficit for the current fiscal year would increase by nearly $9 billion.
Curtailment still applies to existing oil wells, the government said. The current cap on total output is 3.8 million barrels per day. However, lifting curtailments on new wells and production will help spur some industry growth, it is believed. It is also hoped that the move will stop drilling rigs from heading to the U.S. where there are lower costs and year-round work.
