Alberta, Canadian's major energy-producing province, reduced oil production 5 percent as part of its fight against federal energy policies. The cut followed one in March and brings the total cutback to 120,000 barrels a day. Alberta, which produces almost 90 percent of Canada's oil and much of its natural gas, is battling the national government's attempt to enlarge its share of energy revenues at provincial expense. It also objects to Ottawa's cheap oil policy, which sets the wellhead price at $17.75 a barrel, less than half the world price.
Unless Ottawa compromises on the issue, the province threatens to lower production another 5 percent Sept. 1 and delay new projects to process crude oil from Albert an tar sands.