Brian Zinchuk is editor and owner of Pipeline Online
RM of Estevan Reeve Jason LeBlanc, left, and Estevan Mayor Tony Sernick stand with Boundary Dam Power Station behind them, in the distance. Photo by Brian Zinchuk
ESTEVAN – The Government of Saskatchewan announcing SaskPower would be looking at refurbishing, instead of shutting down, its coal-fired power generation plants was some of the best news in years for the City of Estevan and the RM of Estevan.
Pipeline Online sat down with Estevan Mayor Tony Sernick, first elected to that position last fall, and RM of Estevan Reeve Jason LeBlanc, in his second term, on Jan. 17. That was the day after Minister of Crown Investments Corp and SaskPower Jeremy Harrison came to Estevan to talk to coal workers, as well as the municipalities.
After being told for years that conventional coal (coal-fired power generation without carbon capture), was to be shut down by 2030 according to federal regulation, the province’s change in direction was a shock to the municipal leaders, but a welcome one.
“It was shocking and refreshing at the same time, still in still a little bit of shock, which is good. I never thought in my lifetime that I would hear a politician think about the future and think about the energy as it’s needed, not in four-year cycles,” Sernick said.
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In February of 2019, before he held office, LeBlanc was part of a protest convoy to Ottawa, fighting the federal Liberal government’s energy policies. Since the government wouldn’t allow them to stand on the wide, cleared sidewalks, LeBlanc gave a lengthy speech standing on deep snow, advocating for Estevan’s coal industry.
Jason LeBlanc, giving a speech in front of Parliament. Everyone listening to the speech had to stand in deep snow, because police wouldn’t let them stand on the broad, open and cleared sidewalks. Photo submitted
Step forward to Jan. 17, he said, “From my point of view, this is what we’ve been fighting for all the way along. When we stood on the Hill down in 2019, that was the whole point of that, to bring awareness to what is going on, on the prairies. We also did some carbon tax rallies, that kind of thing, and for the federal government just to mandate into law that coal is banned in Canada. We never did take that lightly, or even understand how he can just do that with the flip of a switch. But apparently, he can. So I’m extremely proud, today, of the Sask Party to have the courage to stand up and just say, ‘No, we’re not doing that. We’re moving ahead. We’re pushing through with coal.’
“So for our area, RM, our city, you couldn’t have been better news.”
The RM of Estevan has a very large portion of its land taken up by current and former coal mines.
LeBlanc said Harrison has shown strength in other portfolios, “Now to do it for us, and to stand up and just say that coal is the way it’s going to be, which is a common sense approach, and that’s what we need. And I just really hope that it brings the urban-rural together, because I think they’re going to understand that their power bills and consistent power and baseload power is now there, and the urban centers are going to see that.”
One of the considerations for the minister is the fact the government of Saskatchewan owns most of the coal, and charges itself next to nothing for it. But declining Saskatchewan natural gas production means that the majority of gas used in power generation comes from Alberta. That also means that the money to buy that gas from Alberta leaves the province.
With regard to natural gas gathering infrastructure, which Sernick said could be improved, LeBlanc said, “This is a wakeup call to our Crowns. We’ve got a premier now that pointed the crown in a direction, instead of the tail wagging the dog. And I think you’re going to see that. Now with SaskEnergy, there may be a step up, like, ‘Hey boys, we need to get some more infrastructure in place.’”
Between Estevan and Coronach, there’s roughly 1,000 jobs either mining the coal or running the power plants that burn it. The majority of those jobs are at Estevan. Sernick noted, “We all know half of the stores in our community spin off from supplying the mines.”
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From 2011 to 2014, SaskPower rebuilt Boundary Dam Unit 3 (BD3) and added a carbon capture plant to it. The rebuild, which included extensive asbestos abatement, came in overbudget at around $600 million, while the capture facility was roughly one billion dollars, meaning the project in total was $1.6 billion. Peak workforce onsite was around 1,400 people. Now over 11 years later, and with inflation a factor, certainly any rebuild will see dollars spent in the hundreds of millions of dollars per unit, and Boundary Dam Units 4, 5, and 6 are being considered for rebuilding.
The BD3 project coincided with the Bakken oil boom, and Estevan was hopping at the time. But since 2015, when the seven-year oil downturn took hold, then the impending demise of coal, Estevan has been in a slump. The pair noted something else happened in 2015 – the election of the Justin Trudeau-led federal Liberal government.
Sernick said, “Obviously, there’s a there’s another boom coming. We know we’re a boom town, and there’s not too many houses for sale right now. Everybody obviously was scared we were going to become a ghost town.
“And obviously the thoughts were cautious, optimistic, pay down the debt. We don’t know what’s going to happen to instantly, the conversation went to, ‘Okay, now we got to get a sewer and water line over by the hospital there for the nursing home and for that new residential area.’
“We’re thinking about getting water out to the bypass already. So expansion and housing. Obviously we’re not going to be building houses and stuff, but we have to provide the opportunity for people, and that’s our focus. It shifted that quick.”
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Swinging draglines affect RM taxes
LeBlanc said for the RM, “For us, there’s two parts to this. One is, as long as the drag lines are swinging, we get taxes. It’s a crazy formula that’s worked into there, but when the dragline swing, we get taxes. It’s a drag line stop swinging, we don’t get taxes.
“There’s a formula in there, and it’s, it’s based on the cost of the equipment, and there’s a mill rate factor in there. But we get approximately $1 million a year, $300,000 per drag line as they swing. Now there’s drag line swings on the Bienfait side, too.”
LeBlanc doesn’t think the mines were expecting this, because as recently as month ago, they informed the RM of expectations to shut down one dragline per year in 2028, 29 and 30, which would have had a big impact on the RM’s taxation base.
LeBlanc said, “So we’ve been really thinking outside the box on how to create or generate some income so that we don’t have to raise taxes and do things. And that’s what we’re just against. We haven’t raised taxes now. This is our fifth year of not raising them, and we’re we’re doing okay with it. We’re good, but our infrastructure is that we have industrial parks on each side of the city, and it costs money to operate those.
“And with this news now in the draglines staying swinging, our phone in the office rang this morning, wanting to know if we can rezone some property into acreage potential. So that happened as a spinoff of this announcement, less than 24 hours.”
Sernick wondered if there was a possibility of building a second unit at Shand Power Station, which was originally planned to have a second unit added. That never happened. SaskPower would have to remove the dormant carbon capture test facility that was eventually built in that space, but that’s comparatively minor.
Leblanc noted that the mining trend is moving west, further away from Shand, eventually returning to west of Boundary Dam Reservoir.
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SMRs
In May 2024, Premier Scott Moe announced that Estevan area was the preferred site for the first small modular reactors, should the province go ahead with the project. The site would either be on Boundary Dam Reservoir or Rafferty Dam Reservoir. Harrison explained to Pipeline Online, and the municipal officials, that rejuvenating coal would bridge the gap until nuclear is online.
Additionally, it would take not one, but five small modular reactors to replace Saskatchewan’s coal fleet.
On that, LeBlanc said that prolonging nuclear might allow the cost to go down as the technology evolves.
And indeed that is part of SaskPower’s plan. It is waiting for Ontario Power Generation (OPG) to build the first units of the GE-Hitachi BWRX-300 SMR before making the final decision to proceed with construction of the same model here.
LeBlanc thinks it’s a better idea to rebuild the existing coal plants with coal as the fuel, as opposed to converting them to gas. Doing so would support continued jobs, particularly in coal mining, but also in coal processing in the power plants.
New natural gas plants, like the brand-new Great Plains Power Station at Moose Jaw, employ a small fraction of the people compared to the coal plants.
Sernick expressed concern that the first OPG unit may be already running late.
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Turning the ship around
There was a lot of inertia over several years towards the demise of coal-fired power, including within SaskPower. LeBlanc lauded Harrison and Premier Moe for taking as strong stand on this. He said, “SaskPower is a Crown that belongs to the people, not the other way around, and I think they needed a little bit of a reigning in.”
“I would agree with that 100 per cent,” Sernick said.
LeBlanc said what he liked about the announcement was that no matter who forms the next federal government, Saskatchewan is intent on going ahead with this. This is in tune with what Harrison has said on multiple occasions, that the federal government has no jurisdiction on electrical power generation.
That’s a point that’s been made by several cabinet ministers and the premier in recent years, and was a driving factor behind the Saskatchewan First Act.
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LeBlanc said, “To me, I’m feeling extremely relieved today, and I’m hoping that the unions will come on board and see just what Mr. Harrison has done for them.”
Asked if this was the best news he could get as a new mayor, Sernick said, “Absolutely, and obviously, it was not that I could, thought I could save the town, or save coal, but it was obviously a big reason why I got into this was just to relay that message about, and I’ll steal the two words from the Sask Party, affordability and reliability. That’s just sort of got into it, just happening so quick. Only three months into being mayor, I actually mentioned to Minister Harrison when we were having lunch, ‘So you’re telling me I didn’t even have to run for mayor? And everybody busted out laughing.”
For several years, Sernick has been wearing and passing out buttons saying “Save the Bass.” It was a subversive campaign to keep thermal power generation going on Boundary Dam Reservoir, because the heat it discharges into the water allows for a thriving population of bass fish, the only one in Saskatchewan. He did that because he observed that people’s jobs often don’t get much consideration, but environmental issues, like fish, do. So by saving the fish, the jobs related to coal would be saved, too.
He’s handed out a lot of buttons over the years, including one to Harrison.
The two would like to see an end to the vilification of coal, including in the universities and in the media.
LeBlanc concluded, “The Sask Party government just brought the entire province together, because this benefits everybody. Our little RM, our city, just benefited the entire province, and that message needs to be out there.”
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