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Pumpjacks at work pumping crude oil. (Larry MacDougal/Canadian Press) Alberta’s "ongoing and acute" issues with getting crude to market pose an "extraordinary" challenge for the province’s energy sector, says a new report from Scotiabank Economics. But it says the provincial government must set a "high" bar for intervening directly in the energy sector, adding it should only be done in "an effort to prevent extreme value destruction." If the discounts ease up to more moderate levels next year, as Scotiabank anticipates, then "the payoff of government intervention is likely to be too small to justify the policy action." Yet, if the discounts remain "persistently and exceptionally" wide, the report says such steps could be justified given the impact on companies’ earnings and provincial royalty revenues. Scotiabank’s reports comes amid calls from some oil producers for Premier Rachel Notley to mandate production cuts to help shrink an oil glut weighing heavily on crude prices. A shortage of pipeline capacity and oilsands production growth has led to bottlenecks that widened the usual price gap between Canadian crude and the American benchmark. Some oil producers in the province are calling on Alberta Premier Rachel Notley to impose mandatory outputs on the sector […]
