CALGARY — The president of Canadian Natural Resources Ltd. says certain energy industry members are interfering with attempts to make pipelines run more efficiently because they are making “windfall revenues” from current discount prices on Western Canadian oil production.
Tim McKay says the unnamed members of the Crude Oil Logistics Committee have voted down changes to inefficient rules that “exacerbate” multi-year high oil price discounts caused mainly by insufficient pipeline space to move growing oil production to U.S. markets.
The committee represents producers, shippers, pipelines and government regulators and makes decisions that affect crude oil traffic on pipelines.
Member requests for more space in pipelines are forcing Enbridge Inc., whose Mainline system is the major pipeline conduit into the U.S., to reduce or “apportion” access for all.
Discount price issues have dominated third-quarter results calls by Calgary-based oilsands producers, with companies including Canadian Natural, Cenovus Energy Inc. and MEG Energy Corp. announcing they are reducing production to avoid low prices.
Other producers including Suncor Energy Inc. and Husky Energy Inc. say their upgrading and refining capacity and firm access to pipelines mean they can continue to produce at capacity.
Companies mentioned in this article: (TSX:CNQ, TSX:CVE, TSX:MEG, TSX:SU, TSX:HSE)
The Canadian Press