Crude-by-rail shipments bounce back from summer lows in September, says CER

2020 was a record low for oil drilling in Alberta. The organization that represents Canadian drilling contractors is forecasting a 14 per cent increase in the number of oil and gas wells to be drilled in Canada in 2021, but warns the outlook remains depressed. Kendra Slugoski explains.

Canadian exports of crude oil by rail are bouncing back after falling to an eight-year low in July.

The Canada Energy Regulator says rail shipments of oil in September amounted to 94,440 barrels per day, nearly double the 51,000 bpd shipped in August.

Read more:
Canadian crude by rail exports fall to another 8-year low in July

Only 39,000 bpd was shipped in July. That’s less than a tenth of the record 412,000 bpd moved by rail in February.

Rail transportation of crude oil is considered to be more expensive than shipping by pipeline so shippers tend to use it only when pipelines are full or if the destination market offers much higher prices than can be achieved in Canada.

The CER says the lower use of rail compared with February results from lower crude oil production in Western Canada as global oil demand slumps due to the COVID-19 pandemic.

Read more:
Calgary-based Imperial Oil to lay off 200 workers following cost-cutting analysis

The reduced production levels have freed up more space on export pipelines.

On Tuesday, a new report from the Canada Energy Regulator projected that if Canada strengthens its climate policies to cut more greenhouse-gas emissions, neither the Trans Mountain expansion nor the new Keystone XL pipeline will be needed.

The annual Energy Futures report projects Canada’s energy supply and production over the next 30 years. It concluded that all three pipelines under construction will be needed only if no more climate policies are implemented after this year.

Read more:
Canada Energy Regulator projects there may be no need for Trans Mountain pipeline expansion

© 2020 The Canadian Press

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