The workers and companies across Alberta and Saskatchewan are feeling the weight of the price differential for Canadian crude. As an Albertan, I feel it too.
We know that getting our resources to non-US markets is the ultimate solution to relieve this pain. We are committed to that. We also know that Line 3 will relieve pressure by the end of next year, and Keystone XL will relieve it even further. We also invested in the Trans Mountain pipeline and are committed to moving forward on it in the right way through meaningful consultations.
The Prime Minister and I convened leaders in the industry on Thursday in Calgary to listen to their concerns and chart a way forward. While there is no consensus among industry for an immediate solution, we all understand when one part of the sector loses, we all lose. When Alberta loses, Canada loses.
I am committed, and our government is committed, to working with Canadians to ensure we all get through this deeply difficult time. For a very long time, Alberta and Albertans have driven the Canadian economy. When the Alberta economy has a problem, it is all of our problem.
In the short term, to deal with the immediate issue, the federal government launched a non-partisan working group of government experts from Canada, Alberta and Saskatchewan – including finance, rail, and energy experts. This group has been working hard for the past two weeks, analyzing options including the oil by rail proposal that we have recently received from Alberta government, to relieve the pain being felt by so many.
Over 900,000 BPD of U.S. refining capacity went offline in October and November, hurting the price of Alberta oil. We are pleased to hear that these refineries are now back online and ramping up production. This will bring some welcomed relief and capacity to the system, and begin to deal with the storage backlog.
In our fall economic update last week, Canada moved forward over $770 million in money for infrastructure improvements through the national transportation corridors initiative, which will help open up new rail efficiencies for crude, with tight coordination across other crucial sectors like grain, lumber and potash.
We also launched an accelerated capital cost initiative across industry. The Canadian oil and gas sector will be able to reduce year one capital costs by three times as much than before.
We’re also helping producers build up refining and partial upgrading capacity here in Canada. More in-Canada refining and partial upgrading means more value for every barrel. Partially up-graded bitumen can get an extra $10-$15 USD for every barrel. We have invested over $50 million in oil and gas projects worth almost $170M through programs like the Oil & Gas Clean Tech program, including to partial upgrading projects.
This week, I am meeting with First Nation and Metis leaders in interior British Columbia on the Trans Mountain Expansion Project. I am focused on moving forward on this in a timely and focused way, and through real, meaningful consultation.
And next week, I and Minister Garneau will meet with Canadian commodities shippers to advance rail solutions that work for everyone – including Albertans.
I am here to work every day for Canadians. We need to ensure we are getting the highest value possible for our product. We need to diversify our exports to non-US markets so we are not beholden to a single customer. We need to upgrade and refine our products, so we can get that higher value. We need to continue to become the leading country in the world in clean technology, including in the oil and gas sector so we continue to reduce heavy pollution. We need to increase our competitiveness.
And if we work together on this, we will succeed.