CAPP Releases Statement Following CN Rail and Teamsters Tentative Deal

November 26, 2019 – Calgary, Alberta

CAPP has issued the following statement in response to the announcement of the tentative deal between CN Rail and the Teamsters Union on November 26, 2019:

The Canadian Association of Petroleum Producers (CAPP) is happy to hear of a tentative agreement between CN Rail and the Teamsters union. We hope this resolution will ensure a safe, competitive and efficient system of rail transport for Canadian commodities.

The energy industry has expressed concern about the impact of interrupted rail transportation for Canadian products. CN accounts for more than half of Canadian crude oil shipped by rail; approximately 173,000 barrels per day, according to the company’s Q3 public reporting.

Lack of rail transportation tightens an already untenable market access environment for Canada’s oil and natural gas producers. With a persistent shortage of available pipeline capacity, rail has become an increasingly crucial mode of transportation for crude oil.

While the Alberta government has instituted a curtailment program in the face of transportation constraints, Alberta oil producers have been provided with an opportunity to increase production if they transport incremental volumes by rail. This program would not be able to assist producers in the event of prolonged strike action on CN.

The CN rail strike has highlighted the importance of energy to our society and emphasizes the need to strengthen our energy infrastructure, not only for export but also to ensure all Canadians have reliable access to our own resources. A robust energy infrastructure includes both pipelines and rail — modes of transportation that can backstop one another in order to provide reliable supply and prevent unnecessary hardship in times of disruption.

– Ben Brunnen, Vice-President of oil sands, fiscal and economic policy, CAPP