This article was published by the National Energy Board on Oct. 3o, 2019.
The Government of Alberta capped Alberta crude oil production at 3.56 million barrels per day (MMb/d) on 1 January 2019. This was in response to Alberta crude oil production available for export exceeding available export capacity in late 2018, causing western Canadian crude oil to sell at a large discount compared to U.S. oil prices.
The temporary production limit has been gradually increasing since coming into effect, reaching 3.79 MMb/d in October 2019. Production limits are set at 3.80 MMb/d for November 2019 and 3.81 MMb/d for December 2019.
Once the Alberta production limits were imposed, production of non-upgraded bitumen fell by 18 per cent from December 2018 to January 2019. Shortly thereafter, non-upgraded bitumen production began to increase steadily, increasing by 13 per cent from January to June 2019.
Production of conventional heavy and light oil remained mostly unchanged in response to the production limit. For the most part, conventional production was not impacted because the first 10 000 b/d of production is exempt for each producer, and most small producers focus on conventional production.
As of 1 October 2019, this base limit was increased from 10 000 b/d to 20 000 b/d. Production of synthetic crude oil also remained relatively constant. Where possible, large producers with upgrading capability have cut non-upgraded bitumen production to maintain production of light and synthetic crude oil, which tend to have relatively higher value.
Updates to the initial curtailment policy, including increasing the base limit on October 1, reduces the number of affected producers in the province from 29 to 16 of more than 300 producersFootnote2.