Will tighter restrictions on oil vapor pressure make crude-by-rail safer? The science isn’t in yet, but the legislative train in Washington State may have already left the station.
Improved economics allows producer to resume moving volumes.
The government said the increase in production limits comes as warmer weather reduces the amount of diluent needed to help oil sands bitumen flow through pipelines, increasing capacity.
Volume will reach 120,000 bbl/d by mid-2020.
PHMSA’s regulations will take effect in August.
Takeaway capacity cannot keep up with rising production and rail loadings will likely diminish in the winter.
The deals come as the discount on Canadian heavy oil has spread to $42, its widest point on record, as rising production from Alberta's oil sands has run up against full pipelines, leading to swelling volumes in storage.