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Alberta government calls election amid oil export turmoil

Residents of Canada's biggest oil- and natural gas-producing province will head to the polls in less than six weeks to decide the fate of its four-year-old socialist government amid turmoil in the energy industry.

Alberta Premier Rachel Notley announced the April 16 election date in Calgary on March 19. Notley is seeking a second four-year term as leader of the province after her New Democratic Party unseated the ruling right-wing party in May 2015 after more than four decades. The government unveiled a legislative agenda March 18 aimed at improving social programs and diversifying the province's resource-based economy.

Separately on March 18, the government said it would hike legislated oil production limits by 25,000 barrels per day in both May and June. The production quotas, which had been announced on a month-by-month basis, were moved to two-month periods to allow oil producers and marketers "greater certainty for making decisions by having production limit information two months in advance," according to a statement. The province's permitted oil production will rise to 3.68 million bbl/d in May and 3.71 million bbl/d in June.

Large integrated energy companies such as Suncor Energy Inc., Exxon Mobil Corp.'s Imperial Oil Ltd., and Husky Energy Inc. have slammed the production limits as government meddling. The limits were introduced after the price of Western Canadian crude plunged due to swamped pipeline networks and brimming storage. The government is the ultimate owner of most oil and natural gas produced in Alberta and takes a share of production to fund its activities. The boost in oil prices after the limits were announced have helped the province shore up its financial outlook.

The production limits, as well as Notley's handling of energy issues, will likely be a central issue in the election. The government embarked on a series of climate-change mitigation initiatives after its election in 2015, hoping to gain so-called social license for new pipelines to increase export capacity. It enacted a sweeping levy on emissions and appointed prominent environmentalists to provincial regulators and committees.

At the beginning of 2015, pipeline companies proposed new lines and expansions that would increase capacity by 3.5 million bbl/d. None of the projects have been completed, and the two closest to construction, Enbridge Inc.'s Line 3 expansion and TransCanada Corp.'s Keystone XL project, have both suffered delays through regulatory setbacks. A plan to expand federal government-owned Trans Mountain Corp.'s network has been sidelined since late 2018 by a court ruling.