Premier Scott Moe at the Lloydminster Heavy Oil Show on Sept 11. Photo by Brian Zinchuk

 

Editor’s note: Pipeline Online has put out requests to conduct similar interview with the Saskatchewan Party, New Democratic Party, Buffalo Party, Progressive Conservative Party, Green Party and Saskatchewan United Party and Progress Party. Similar questions are asked of each party. These will likely be the most in-depth stories on energy policy you’re going to see in this election. At the end of the interview, each of these pieces includes the verbatim text from that party’s policy platform with regards to energy.

Saskatchewan Party Leader Scott Moe has been premier for the last six years, and during that time has fought numerous battles with the federal Liberal government on energy policy, from the “No More Pipelines Act” to the carbon tax and Clean Electricity Regulations.

As the Saskatchewan Party has now been in power for 17 years, it has had ample time to put it its stamp on the energy industry. Thus far, the Saskatchewan Party has maintained a general policy of stability in royalties and regulations, while taking those fights to Ottawa.

Pipeline Online spoke to Leader Scott Moe by phone on Friday, Oct. 11. about the Saskatchewan Party’s energy policies for this election.

Asked what the Saskatchewan Party’s primary energy policy is, Moe replied, “Our primary energy policy is to increase the value of the products that we are providing, in providing energy security to so many countries around the world. Whatever the product is, we want to sell more of it and a higher value product to more countries around the world.

“That’s the 30,000 foot level goal of the government in all of our industries, including the energy industry. Increasing the value equals jobs, equals wealth, equals opportunity.”

Does that mean more refining in Saskatchewan?

Moe said, “I think when those opportunities are there, we do. There are opportunities for value in the innovation that is coming in with the products that we are producing. But I think initially, and in particular to the oil and gas industry, that has literally been under attack since 2015 by the federal government, the Liberal Trudeau federal government that has been propped up by the NDP, first and foremost is we have a growth plan target to increase our production in this province to 600,000 barrels. We think that’s incredibly realistic, and may even be able to go beyond that, with some proper policy that would provide certainty from the federal level.

“And so with that certainty, our first goal in the oil and gas industry would be to increase the volume, and then they can engage quickly. And how do we increase the value of the products that we’re shipping?”

Premier Scott Moe at the Saskatchewan Oil and Gas Show in June. Photo by Brian Zinchuk

Multilaterals

In the 2024 budget, Saskatchewan Party government brought in a multilateral well incentive that provided a dramatic reduction in royalties down to 2.5 per cent on up to the first 16,000 cubic meters, or 100,600 barrels of oil on new wells of this type. It’s the largest change in oil royalty structure in two decades, the result has been substantial adoption of a form of drilling. Asked what his evaluation has been of the program, Moe replied, “It’s successful.

“We are seeing drilling rigs starting to move in, in particular, into that northwestern part of the oilfield, but across the province as well. It’s been perceived as a government that is listening, engaging, and where we can encourage the industry to expand its incentives just like this, that are making that happen.

“And so, we obviously will keep the program in place, and our commitment would be to continue to work with the industry to remove barriers that provide security and certainty and investment. And (we) will most certainly always attempt to work alongside the current federal administration, which has been difficult to non-existent. But we’ll attempt to work alongside a new federal administration as well, in a post election environment to ensure that we are able to create the certainty and attract the investment.”

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Did the Saskatchewan Party government leave too much on the table by dropping those royalties on new multilateral wells to 2.5 per cent? Moe said, “It’s working, and we’re seeing the rig counts increase.

“We’re seeing people go to work. It’s it most certainly is working. And we’ll reevaluate at some point in the future. But if it’s working and attracting investment into an industry that has been under a direct attack by the federal Liberal and NDP coalition government for far too many years now.

“We are pleased to see an industry that is investing and investing in the tens and hundreds of millions of dollars back in Saskatchewan. We have one of the most sustainable valuable resources in oil and gas here, and we want to put Saskatchewan people to work at producing it.”

600,000 bpd “is modest”

As for the growth plan, Moe said he thinks the that the 600,000 barrels per day of oil production target “is modest.”

He said, “With a little bit of certainty provided at the federal level, I think we’ll be able to not only achieve that, but go beyond and you don’t have to go far away to the south to see states that have been able to achieve that. We would like (to be part of) the million barrel club at some point in the future.”

That’s a clear reference to North Dakota, which saw its oil production shoot up from around 90,000 barrels per day to in excess of a million barrels per day in just three years during its Bakken boom.

The Moe government has been talking about this 600,000 barrel per day goal since at least 2019, but production has remained relatively flat. The intervening years, of course, were dominated by the COVID-19 pandemic followed by the Ukraine war, both dramatically impacting the industry.

 

Moe said of the pandemic, “Sure, the pandemic was a challenge for all industries, including the energy industry, both on the on the demand side and the production side. But without a doubt, the lack of certainty that we have in Canada in this industry is the largest challenge, when it comes to companies having to see an investment of millions of dollars through for seven or 10 years to realize the capital return on their investment.

“And so it won’t take a lot, but a little bit of certainty coming from the federal government, I think, will have a significant impact on the capital investment people that are going to work in this industry, and this is one industry, and the one cylinder, if you will, in Saskatchewan, economic engine that I think has a great opportunity to expand. This needs a little bit of certainty from the federal government, removal of a few regulations and the incentive to, like we are, always looking at in this province.”

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Natural gas

Saskatchewan has only drilled around 10 natural gas wells over the last 10 years, and we used to drill 2,600 a year. Does the Saskatchewan Party see any way of bringing gas production back? (Correction: the question, as posed, referred to 2,600 natural gas wells. The peak was actually 2,318 targeted natural gas wells drilled in 2003.)

Moe replied, “This is indicative of the lack of certainty being provided at the federal level by both Liberal and NDP in this nation. I think, you know, it’s a very alarming number, 2,600 gas wells a year to 10 in a decade. It’s literally what the intent of the liberal and the NDP federal administrations has been, is to kill this industry. And it’s tremendously unfortunate, given the wealth that it provides for Saskatchewan and Canadian in residence, or has provided in years gone by, the way that it provides indirectly to Canadians across the nation as well.

“The fact is that the Saskatchewan industry is producing some of the most sustainable product that you can find on Earth, and we are still using natural gas and are going to for considerable time into the future. This is an area too, I think, in particular, when it comes to natural gas, some of the productive conversations that could happen around are some of the innovation that’s available to step into this space and capture some of the some of the products that are, you know, being produced in different areas of the provinces.

“So this is an area where I think there’s a positive discussion moving forward, and maybe room for an incentive to increase the profitability, but also the efficiency and the sustainability of our industry. But taxing it into submission and regulating it out of existence, which is the NDP and Liberals’ plan, is not the answer for the production of a product that we still are using and will use into the foreseeable future, and for the health and wealth of Saskatchewan families and communities.”

Potash

Former NDP Energy Minister Eric Cline released a book last spring entitled Squandered: Canada’s Potash Legacy. In it, he makes the case for reevaluating potash royalties in Saskatchewan, implying a lot of money is being left on the table. With several parties, including the Saskatchewan Party, offering substantial tax cuts, where will the money come from? Will the Saskatchewan Party be looking at the royalty structure for potash, oil, lithium or helium?

Moe said, “We will not.

“We had adjusted the royalty structure slightly in 2018, with consultation with the industry as well.

“Anyone that is looking at adjusting the royalty structure, and in Eric Cline’s case, I think he was part of actually putting that royalty structure in place, and now he is having some some remorse for some reason or another.

“But anyone that is – there are political parties that are looking at adjusting the royalty structure. I would suggest they don’t understand what they’re talking about. It is a royalty structure that has been highly, highly successful in not only attracting investment and putting Saskatchewan residents to work, but it’s a royalty structure that has put Saskatchewan on the map globally, as the largest area, largest region in the world when it comes to potash production, and we’re producing the most sustainable potash you can find, and we’re shipping it to countries all around the world. And this is certainly something Saskatchewan people can be proud of.

“It is a structure that has been, as I said, worked on and slightly revised as recently as 2018 memory serves me correctly. And it is a structure that is working. It’s attracting investment in K+S, a mine that was originally actually nationalized, ironically, by the NDP government, but certainly as the confidence to come and reinvest in Saskatchewan, because of the certainty of the royalty structure that we have here. We have the largest mining company in the world, BHP, making their most, their largest, most significant investment in the history of that company, Saskatchewan, and the potash mining industry, because of the certainty of the royalty structure that we have. When you create uncertainty in these industries, which is what is happening in the oil industry, you create challenges around those investments. You create closures. You create, really, a destruction in production uncertainty and deterioration of the capital that is going to flow into that space.

“This is exactly what the federal government, the Liberals and the NDP, have attempted to do to the oil industry in Canada, is to over regulate and overtax that industry. And I would suggest that when folks say they are going to pull one or two or three billion, four billion extra dollars out of the potash industry, that you are going to see closures of mines. You’re going to see cancelations of projects and devastation to an industry that is certainly today, one of the shining lights, not only of this province in Canada, but of the world.”

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Lithium

On a related note, Saskatchewan does not yet have any lithium production, but its royalty structure is based on potash royalties, and is set at three per cent. What will the Saskatchewan Party’s approach be on lithium?

Moe said, “I think that conversation is still to be had. And in each of these industries, and this is why you can’t treat the oil industry the same as the potash industry, the same as uranium industry, the same as the burgeoning lithium industry or the helium industry. You need to look at the world as to what is competitive and what is possible in attracting that investment into your jurisdiction. If you want to be a significant global provider lithium or helium or rare earth elements or potash or oil and gas or uranium, you have to have a competitive royalty structure. You don’t have to have the lowest royalty structure, but it has to be competitive to attract that investment.

“Saskatchewan has other assets: our workforce, the ethical way in which we produce products, the sustainable way in which we produce products, which all matter as well, but you do have to be competitive.

“And so, the lithium royalty structure, yes, is modeled after the potash structure. However, that may morph and change as we find our way into what we hope will be a successful lithium production industry, here in the province. You can mirror that alongside the helium industry. And where we see the helium industry in the years ahead, or they’re probably just further down the road, is the opportunity that we have in Saskatchewan to not only be a significant rare earth elements producer for batteries, but to be a processor in that space as well.

“So, we are a global player in these products, whether it be the agrifood products that we export, the fuel products that we export, the fertilizer products, the mine products. And we need to be aware of where we position ourselves to attract that global investment.”

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Helium

Asked if the Saskatchewan Party had any strategies for helium development, Moe said, “Again, it’s maybe just a little bit ahead of the lithium stage in where we are in developing, not only the royalty and production structures and the regulatory structure for the helium industry, but we are sitting on and it’s been identified, as one of the largest helium resources in the world, in a world that is going to need more helium, whether it be in the medical field or where that is.

“And so we want to be a part of that supply chain. We want to be a part of many supply chains. Helium and lithium are certainly elements where Saskatchewan has a significant opportunity to be a part of that supply chain and create jobs and opportunity for Saskatchewan people like we have in the other industries, like oil and gas, like we have in the ag and now value-added food industry, in the mining industry in the mining industry in general. So, we have the know how, and I would say that we have the very basis to be successful in these industries. And a Saskatchewan Party government is going to do what we can to work with the industry, look at the global investment environment, and do what we can to attract that investment into Saskatchewan and provide that certainty.

“And, you know, standing up and saying that you’re going to change the royalty rates of any industry like the federal Liberals and NDP have in the oil and gas industry, does not encourage investment. It hinders investment and hinders jobs and opportunities. And we have done that in this province for far too long, and I would hope that Saskatchewan people are not willing to do it again.”

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Power generation

Shifting to power generation, what is the Saskatchewan Party’s stance on the federal Clean Electricity Regulations?

“It should be repealed,” Moe said. “And that would be where we stand on it.

“It’s costly, unattainable, unachievable, and is going to do nothing but cost families more, significantly more, as per SaskPower’s numbers that were released about a year ago, and as per the economic cost and the job loss that we will see with the Sask tribunal release just recently.

“So cost, cost us economically in general, as families in what we pay for electricity, is unachievable from a power sector perspective and from SaskPower’s perspective.

“So my question is to the Liberal-NDP government that brought this in, is, ‘Why would you ever think you could impose such a thing on Canadians?’ Not even the most advanced power grid in the nation, or a very advanced power grid like Ontario, is able to achieve what they want to achieve, and certainly not Saskatchewan.”

He continued, “We have a better plan in place. It’s a Saskatchewan plan, where we’re going to run the life cycle of the assets that we have out. We do have a plan, and working closely with other provinces and the Saskatchewan Power, our utility company on advancing potentially into the nuclear power field, starting with SMRs, but maybe beyond that. But we need to be able to run the life cycle of our assets out – our coal fired power plants, and our natural gas power plants –  to ensure that we are offering the most the lowest cost power to the people that live here, and to the industries that we are working so hard to attract, which are significant users of power, as well as part of being competitive environment.

“And so the Clean Electricity Standard should be repealed. We would expect that it may not be repealed under the current Liberal-NDP minority administration, but we expect that there’s a good chance it could be repealed after a federal election.”

Premier Scott Moe, telling Estevan it will be the site of SaskPower’s first small modular reactors, should they go ahead. Photo by Brian Zinchuk

Nuclear power

At the end of May, Moe was in Estevan where he said that would be the site of the first small modular reactors if SaskPower goes ahead with them. He also said SaskPower would continue to run coal-fired power until nuclear power is in place. The earliest that would be, according to current schedules, in 2034. Just before the election was called, SaskPower Minister Dustin Duncan was in Coronach announcing a further $10 million in coal transition money. If Saskatchewan will not be out of coal until 2034, Pipeline Online asked why are we transitioning?

Moe said he would add to the $10 million announcement, saying, “We also signed a memorandum of understanding with IBEW on how do we prepare for a transition, quite likely to nuclear, at some point in time. And I think … the 10 million would go into not only the community, but you know, how this is a significant change to go from, you know, a coal mine and a coal-fired power plant to potentially something in the nuclear space, one, two or three or four SMRs in that space.

“And it a big change for the community, but I say it’s a significant change for the workforce.

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“And here’s the two scenarios that are laid out. The federal government would like us to quit burning coal in 2030. As you said, our first SMR would not come on until 2034, and then, potentially, other SMRs might come on after that. Never mind the fact that we wouldn’t have enough power, and people in Regina and Saskatoon and across the province that would have to ration their furnace fans and their lights. So never mind all of our potash mines wouldn’t be able to produce.

“Why would we rid ourselves, or lay off an entire workforce in the power industry in 2030, only to be looking for at least that larger workforce, starting in 2034 and as potentially other SMRs came on, starting to build that workforce from there? Would it not make more sense to run our coal-fired power out as we potentially transition, as they run to their 50 year of life cycle, transition to something like nuclear power and train the workforce, the existing workforce that we have that is comfortable and familiar and has expertise in the energy electricity production industry to provide training opportunities for them from coal fired power, to bring that expertise over into the nuclear space. Does that not make more sense? To utilize the very specialized, capable and competent workforce that we have?

“And the same goes for the support in this community. And so, the 10 million is adding to the original 10 that we’ve provided to help the communities transition and what is a significant change, and coming in, directly from the federal government, but also from industries that want to know what your plan is on electricity production and your emissions into the future. The all of the industries are asking those questions.

“But also, I would point in addition to that 10 million we’re working closely with IBEW, the national organization, as well as their three provincial organizations, on partnering on training opportunities that we have for their members, because ultimately, it’s going to be their members that are going to bring the expertise into potentially that SMR and that nuclear field. And so, this is a significant transition, and the dollars that are provided to the communities, I hope, provide the reassurance that this is a government that is investing in their future and in the future that we have.”

Moe said there’s a timeframe for decisions to be made for this. But his party is “very seriously looking at nuclear power, “starting with SMRs.”

“And as I said, we don’t have a lot of other options outside of nuclear, so I don’t know what option B would be. However, in looking at SMRs, and looking down the road at not only replacing some of the powers of power generation that we have, but the increased power needs that we will have and the cost of power, it’s incumbent on us to provide the lowest cost, cleanest power that we can over the long term and a structured way. And I think the conversation around expanding from SMRs to maybe even the larger reactors and the micro reactors that will be coming in the future.”

Asked about his thoughts on other power such as coal, wind, solar and natural gas, he said, “Any of the assets that you have, you have to run out the life cycle, to ensure that you’re offering the lowest cost power that you can.

“Industry is asking for what the carbon content of your power supply is. So, as we build out, we need to build cleaner generation facilities. Natural Gas, better than coal. Nuclear, better than natural gas. And wind and solar are entirely a different conversation, because they provide no baseload power whatsoever. However, they do provide affordable megawatts of power, when they are providing. So, they can help drive the cost curve down, but you do need the base load power.

“So we have signed a number of power purchase agreements with wind and solar companies across the province, and continue to look at how we can help build additional renewables, not relying in any way on them for base power, understanding that you have to double build those megawatts, because they are not in any way providing base power, but they do provide for more economical power for Saskatchewan families and residents as they drive the cost point down over time.”

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SaskPower is building an expanded electrical power 650 megawatt intertie to North Dakota, with the site currently under construction southwest of Estevan. Alberta’s power grid in recent weeks has shown considerable issues with regulating its all-important electrical frequency while its interties to Montana and British Columbia were down for maintenance. It turns out that interties have a significant role in maintaining the stability of a regional grid.

Regarding the Saskatchewan-US intertie, Moe said, “there’s always been the question about, as you know, ‘Is that to import power?,’ and the answer is ‘Yes.’

“And then the next question is, ‘Well, is it to is it there to export power?’ And the answer is ‘Yes.’

“I’ve often viewed that as SaskPower’s battery. So when our renewables might be spinning and we have excess power, we can export that power. When they’re not, and we might need to bring in a couple hundred megawatts, we have a, for example, a nuclear facility that’s down for maintenance for a month, we do have that balancing of our grid.”

While he said he wasn’t familiar with the frequency issue, Moe said, “I do understand the need to have, I view, that intertie as really a battery, that we can provide power into or suck power out of in a larger system, which I think is kind of ties into that frequency discussion.”

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    0084 EMP Metals Pipeline Online
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Platform:

The entire Sask Party platform can be downloaded here.

Pipeline Online is reproducing the salient portions of all party’s publicly-released platforms referring to the energy sector. In the Saskatchewan Part Platform, released Oct. 12, energy related items (under natural resources) covers five pages. At the end of a list of points on agri-food and forestry, it picks up on energy here (formatting copied as closely as possible from the document):

Growing Indigenous Participation in Saskatchewan’s Natural Resource Industries.

  • Indigenous employment in the natural resource sector grew from 10.6 per cent in 2018 to 14 per cent in 2023.

Increasing Oil Production by 25 Per Cent to 600,000 Barrels Per Day (bbl/day).

  • Oil production in Saskatchewan and the world was significantly impacted by the pandemic. In 2023-24, oil production rebounded to 454,000 bbl / day.

Advancing Saskatchewan’s Critical Mineral Strategy

  • Saskatchewan is home to 27 of Canada’s 34 critical minerals, including uranium, potash, rare earth elements, helium, copper and lithium. In 2023, the Saskatchewan Party government released Securing the Future: Saskatchewan’s Critical Mineral Strategy.

Building a Strong Economy and Bright Future

A re-elected Saskatchewan Party government will continue to support the growth of our agriculture and natural resource sectors through actions to grow jobs, production, exports and value-added opportunities.

Building Saskatchewan’s Natural Resource Advantage

Saskatchewan’s forestry, energy and mining sectors are responsible for approximately 61,000 direct and indirect jobs in the province.

Delivering on the Saskatchewan Advantage by Standing Up for Saskatchewan

The Saskatchewan Party government has continued to deliver on the Saskatchewan Advantage by keeping taxes and utility costs low, while ensuring the province has a stable and predictable regulatory environment. As a result, private capital investment in our export sectors continues to grow, with $39 billion committed to future large-scale capital investments.

A re-elected Saskatchewan Party will continue to protect the Saskatchewan Advantage by defending the province from Trudeau-NDP policies that will crash Saskatchewan’s economy.

Trudeau-NDP policies:

  • Would cause significant economic harm to Saskatchewan and the province’s oil and gas industry.
    • Oil production would fall by between 38 and 52 per cent
    • The province would face royalty and tax revenue losses of between $4.8 billion and $7.1 billion, and total lost government revenues would be $43.3 billion.
    • Loss of up to 34,000 jobs.
  • Will jeopardize SaskPower’s ability to provide safe, reliable and affordable electricity to Saskatchewan people, including the province’s energy-intensive export industries.

The Saskatchewan Party government has already created an independent tribunal to assess the economic damage of Trudeau-NDP policies.

A re-elected Saskatchewan Party government will undertake legal action as required to assert provincial jurisdiction over our natural resources and electricity sector to protect Saskatchewan’s economy.

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Promoting Saskatchewan Products Internationally

Saskatchewan’s economy is global, with our products supporting energy, food and mineral security around the world. A re-elected Saskatchewan Party government will continue to promote the quality and sustainability of Saskatchewan products internationally and support our businesses through international engagement.

  • The province has a network of nine international trade and investment offices that are helping to connect the province to global markets and bring new investment and businesses to Saskatchewan.
  • The Sustainable Saskatchewan campaign was launched to promote the sustainability of Saskatchewan products.

Introducing Targeted Incentives to Create New Growth and Investment

The Saskatchewan Party government has introduced growth incentives to spur new investment and economic growth in our agriculture and natural resource sectors, including:

  • The Oil Infrastructure Investment Program, which offers a transferable oil and gas royalty / freehold production tax credit for new and expanded pipeline projects.
  • The Saskatchewan Multi-Lateral Well Program, which supports increased drilling of multi-lateral wells to increase oil production.
  • The Saskatchewan Critical Minerals Innovation Incentive, which supports new and expanded processing projects for emerging critical minerals including helium, lithium and rare earth elements.
  • The Saskatchewan Value-Added Agriculture Incentive, which supports new construction or expansion of value-added agriculture facilities.

Increasing Indigenous Participation in Saskatchewan’s Natural Resource Sectors.

The Saskatchewan Party government is committed to growing Indigenous employment in the natural resources sector to advance reconciliation. Indigenous employment in the natural resource sector grew from 10.6 per cent in 2018 to 14 per cent in 2023.

In 2022, the Saskatchewan Party government launched the Saskatchewan Indigenous Investment Finance Corporation (SIIFC), to facilitate the participation of First Nation and Métis communities and organization interested in investing in Saskatchewan’s natural resource and value-added agricultural sectors.

Capitalizing on Emerging Opportunities – Developing Saskatchewan’s Critical Minerals.

A re-elected Saskatchewan Party government will continue to grow the province’s critical minerals sector.

  • The Saskatchewan Party government released Securing the Future: Saskatchewan’s Critical Mineral Strategy, to provide a roadmap for the sector’s growth and development.
  • The Saskatchewan Party government also released Saskatchewan’s Helium Action Plan: From Exploration to Export, with a goal to have Saskatchewan supply ten per cent of global helium demand by 2030.
  • The Saskatchewan Research Council has developed Canada’s first Rare Earth Element Processing Facility.
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On the power generation front, the platform said:

Crown Utility Infrastructure

The Saskatchewan Party government has undertaken record infrastructure investment in Saskatchewan’s Crown utilities to address years of NDP underfunding and dividend-stripping.

Since 2007, Saskatchewan’s Crown utility sector has invested over $24 billion in capital projects.

A re-elected Saskatchewan Party government will invest almost  $9.5 billion in Saskatchewan’s Crown sector over the next four years – the largest capital investment in the history of Saskatchewan’s Crowns.

  • Investments in the 2024-25 Budget include: $1.6 billion through SaskPower to improve reliability, replace aging infrastructure and meet customer demand. This includes the construction of a 370 MW natural gas-fired electrical plant in south-central Saskatchewan.
  • More than $415 million through SaskEnergy to meet increased growth and demand on the province’s natural gas transmission and distribution system.

Advancing the Development of Nuclear Power in Saskatchewan

Actions to advance the development of nuclear power in Saskatchewan include:

  • Completion of a four-year evaluation process, resulting in the selection of the GE-Hitachi BWRX-300 technology.
  • Partnering with Alberta, New Brunswick, and Ontario to advance small nuclear reactor technology.
  • Establishing the Small Modular Reactor Investment Fund to support provincial investment in the first grid-scale small nuclear reactor.
  • Providing $80 million to the Saskatchewan Research Council to develop an eVinci micro-reactor, which can be deployed in remote communities and industrial locations.
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    0077 Caprice Resources Stand Up For Free Speech
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    0046 City of Estevan This is Estevan
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    0041 DEEP Since 2018 now we are going to build
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Election 2024: Grow oil production to 500,000 bpd, cut PST by half: Saskatchewan United Party