There is too much oil! Oil is being produced at a higher rate than it is able to travel out of province and there is not enough storage space to house the excess oil. Thus, the price of oil plummets, and with it come the losses.

Oil companies throughout Alberta can only see one possible answer: production cuts. If the oil production rate was slowed, the price differential between what the price of oil actually is and what Alberta is selling it for will close.

 However, not all oil companies agree, which means some are appealing that the government mandate production cuts to make up for the loss. 

Airdrie MLA Angela Pitt says that although the United Conservative Party would like to see production cuts, they would like the industry to make the cuts voluntarily.

 "Jason Kenney and the United Conservative Party are asking industry to make voluntary cuts on production", says Pitt. "We are experiencing a significant crisis right now here in Alberta which will not only affect Albertans but the rest of the country in terms of the price differential. The price that oil actually is and the price that we’re actually getting for it. We’re only getting about 14 dollars a barrel right now, we’re losing out big time."

Other possible answers include increasing access storage or better means for transporting oil, but the most realistic change right now is the cuts.

 "Without any additional access to markets, for example, the pipeline or additional storage capacity, the right thing and the proper thing to do is actually call for production cuts to be able to close that gap in the price in the price differential."

 Pitt says that she believes that the government mandating production cut might not be necessary, however.

 "I think our best bet right now is to ask industry to do the right thing. A lot of the conversations that we are having with industry is them themselves saying ‘this is the right thing to do, the right thing to do right now is to pull back productions’. We just need everyone on board."

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