Current rules allow “certain players” to exploit the system by booking pipeline space they don’t need when capacity is tight.  Moreover the problem has existed for years while provincial and federal governments have done little to end the gaming of the pipeline system.

“Air barrels” is the industry term for shipments that companies overbook on the pipeline system even though they can’t actually provide the oil. Air barrels result from oil companies or traders booking more pipeline space than they physically need, so that pipelines are not full even when more oil is being produced than the network can accommodate.

Oilsands producers are using “air barrels” to game the pipeline system, reducing capacity, lowering bitumen prices and costing the Alberta government royalty revenues.

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