Keeping a pledge she made in November, Alberta Premier Rachel Notley has announced the province has signed contracts to lease 4,400 rail cars to carry oilsands crude to American and international markets.
The province says it needs the cars–leased from Canadian National and Canadian Pacific–because there’s a backlog of oil and no pipeline space to export it.
Shipments carrying about 20,000 barrels per day are expected to begin in July.
Shipments are expected to reach 120,000 barrels a day by the middle of next year.
The program is slated to cost $3.7 billion and produce $5.9 billion in revenue over three years.
However, some industry experts say the plan is risky and unnecessary.
“There’s not reason why private sector companies couldn’t have done this on their own–and, in fact , they have been doing it on their own,” Robert Cooper, a member of the instutional sales and trading team at the Calgary-based investment firm Acumen Capital Partners.
Exactly where the oil will be shipped is still being negotiated.
The announcement comes as the oil industry continues to wait for the Trans Mountain Pipeline expansion to be approved.
But even if it is–and there is no guarantee it will be–it would not be expected to start operating for at least three years.
With files, from CP, CBC, CTV