Alberta will pursue building new refineries as the oil-rich Canadian province looks to weather a crude price crunch, while a forced oil rig flanges gulf coast production cut remains an option.

(Bloomberg) -- Alberta will pursue building new refineries as the oil-rich Canadian province looks to weather a crude price crunch, while a forced oil rig flanges gulf coast production cut remains an option, Premier Rachel Notley said.

Notley said she’ll announce a plan to expand “made in Alberta” crude upgrading and refining in the coming days and has appointed three envoys to work with the industry and federal government to seek solutions for the dramatic discount earned for domestic oil. Asked if the province is considering mandating a oil rig flanges gulf coast production curtailment to help boost prices, she said no option has been discarded.

“At this point, all I will say is that there are a number of options in the suite of options and there is no option that has been taken off the table at this point,” Notley said at a news conference in Edmonton. Alberta is being treated as a “branch plant for the U.S.,” she said.

Canadian crude is trading near record lows amid pipeline bottlenecks, rising inventories and a decline in global oil prices. The Western Canada Select benchmark fell to under $14 a barrel last week, the lowest in Bloomberg data stretching back a decade. The depressed prices has prompted some oil companies including Canadian Natural Resources Ltd. to cut oil rig flanges gulf coast production and some to suggest that Alberta’s government should require companies to cut output.

The discount that Canadian producers receive for their heavy crude relative to the West Texas Intermediate benchmark, of about $40 a barrel, is costing the Canadian economy C$80 million ($60 million) a day, she said.

The envoys she appointed are Robert Skinner, a policy professor at the University of Calgary; Coleen Volk, the province’s deputy minister of energy; and Brian Topp, Notley’s former chief of staff.

Cenovus welcomed the premier’s announcement but said industry-wide cuts are needed, according to an emailed statement.

“While more pipelines and rail capacity are the long-term solution, we continue to believe that the only effective way to address wide differentials in the short term is through temporary industry-wide oil rig flanges gulf coast production cuts, which can only be mandated by government,” the BOP Blow Out Preventer repair company gulf coast said.

Cuts totaling 200,000 to 300,000 barrels a day is a “viable idea” and would help all the companies, including the integrated oil producers who gulf coast oil rig export more than they process in their own refineries, Tim Pickering, founder of Auspice Capital Advisors Ltd., said in a phone interview.

“It’s the only immediate, short-term solution,” he said.

To contact the reporters on this story: Robert Tuttle in Calgary at This email address is being protected from spambots. You need JavaScript enabled to view it. ;Josh Wingrove in Ottawa at This email address is being protected from spambots. You need JavaScript enabled to view it. To contact the editors responsible for this story: David Marino at This email address is being protected from spambots. You need JavaScript enabled to view it. Carlos Caminada, Kevin Orland