Brian Zinchuk is editor and owner of Pipeline Online
Saskatchewan Minister of Energy and Resources Jim Reiter, left, was shown the site of the first planned lithium production facility by Zach Maurer. Photo by Brian Zinchuk
REGINA – Saskatchewan has formally announced its opposition to both the propose federal emissions cap on oil and gas production and the Methane 75 emissions reduction program, with Minister of Energy and Resources Jim Reiter sending letters to the federal environment minister voicing this province’s concerns.
Both of those federal climate change initiatives were introduced by Minister of Environment and Climate Change Steven Guilbeault last December. Reiter wrote letters to Guilbeault on each program, dated Feb. 6 and 14. Pipeline Online has obtained copies of those letters from Reiter and republished both of them, verbatim, on this site here and here.
On Feb. 22, Reiter issued a press release on the issue, and he spoke to Pipeline Online on Feb. 23.
Asked what exactly this emissions cap means, whether it means you can’t build any more, or carbon capture is required, or some impact on venting and flaring, Reiter said, “That’s part of the problem.
“Nobody really knows details of exactly how it’s going to work. But it could very easily be some of all of the above, which is incredibly concerning.”
He noted that high level numbers that ministry officials have worked on could mean a substantial impact on overall production. Reiter said, “It’s concerning. I mean, it’s talking 20 to 30 per cent of production. That’s a lot of barrels a day, right, at the same time that we’re trying to get our barrels per day up.”
The provincial government has set a strategic goal of increasing oil production from the current level of 454,000 barrels per day in 2023 to 600,000 barrels per day by 2030, an increase of a third, roughly 150,000 barrels per day. That’s the exact opposite direction of what this emissions cap could mean. Reiter said, “That’s going to be sort of between 100,000 and 150,000 barrels a day decrease.”
“That’s why, frankly, the push back, that’s why we’re going to look at all options at our disposal, and we’re going to hope that some common sense will prevail with the federal government.”
Preliminary analysis by the provincial government shows that by 2030, the federal production cap will risk up to $250 million annually in royalty and tax revenue as a result of lost production and reduced investment in the sector, according to the ministry. This forecast includes the reduction to provincial revenue from the following sources:
- Crown Royalty on oil production
- Freehold Production Tax on oil production
- Finance’s Corporate Capital Tax Resource Surcharge
The estimate does not include any impact to revenue to the province from PST, personal income taxes or corporate income taxes.
The province hasn’t seen a lot of additional details from the federal government on the proposed emissions cap. In his letters, Reiter offered to have discussions with Guilbeault.
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One step forward, two steps back
While the federal government has proposed two measures that could see a reduction in oil and gas production, the provincial government is taking one step forward to try to attract more investment in the province’s resource sector. On Feb. 26, Reiter is heading to Houston for a conference seeking to attract investment to this province.
During the mission, the delegation will attend an investment forum ‘Fueling the Future: Saskatchewan Opportunities in Exploration and Extraction‘ hosted by Pickering Energy Partners on Feb. 27. This platform offers an opportunity to engage key stakeholders and highlight Saskatchewan’s strengths in oil and gas, lithium, helium, and uranium, among other key sectors in the province. The forum will foster potential partnerships between Saskatchewan businesses and US investors.
Reiter said there are 25 to 26 companies expected to attend on the investment side. As for Saskatchewan participants, this is the list of 12 Saskatchewan companies taking part, as provided by the ministry:
- Strathcona Resources
- NexGen Energy
- Arizona Lithium
- Deep Earth Energy Production Corp.
- Cardinal Energy
- Saturn Oil & Gas
- IsoEnergy
- EMP Metals
- ROK Resources
- Grounded Lithium
- Avalon Oil & Gas
- Helium Evolution
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Notable are five companies oil companies, four involved in lithium development, two uranium companies, and a geothermal company. If that adds up to more than 12, it’s because ROK Resources is an oil producer as well as a lithium developer, working in conjunction with EMP Metals.
“Missions like this highlight the proactive and business-oriented nature of the Saskatchewan government,” Arizona Lithium executive director Zachary Maurer said in a release “These events provide a platform to promote Saskatchewan’s resources and help drive investment dollars into the province. I look forward to participating in the event as we put all of the great resources Saskatchewan has to offer on display.”
Arizona Lithium bought Prairie Lithium a little over a year ago. The Australian-based company is planning on embarking on a drilling program in Saskatchewan worth over $13 million in the coming months as it develops its lithium play near Torquay.
Legislative Secretary for Energy and Resources Daryl Harrison, left, Zach Maurer, and Minister of Energy and Resources Jim Reiter, at Arizona Lithium’s planned initial lithium production site near Torquay.
Trade missions
The trade mission is meant to reinforce Saskatchewan’s position as a premier destination for investment and doing business, according to the release on Feb. 22. According to that release, Reiter “will engage in bilateral meetings with leading US-based energy and resource companies and private equity firms, seizing the opportunity to pitch Saskatchewan’s value proposition.”
While this new trade mission is just getting underway, Premier Scott Moe spent much of last week on the other side of the planet in a trade mission to India. That mission was roundly criticized the opposition NDP,
“After 17 years in power, the Sask. Party has completely lost touch with the challenges working families are facing,” said Official Opposition Trade Critic Aleana Young said in a release on Feb. 20. “This government has already spent a million dollars on a trade office in India this year alone, supposedly to cut down on expensive trips like this. It looks like Premier Moe is flying away from his problems and taxpayers are footing the bill.”
Asked about opposition criticism of trade missions like the one he’s about to undertake, Reiter said, “It never fails to amaze me that the NDP can be negative about everything. We live in a province that’s heavily dependent on exports. We export agricultural products. We export our energy sector products. We export from the mining industry, in order to have that in order to have markets for companies. I mean, you’ve got to talk to people.
“In many economies, government representatives are very important in that in that interaction, to develop business. So, with the intent of this one … it’s an investment attraction thing. So, we’re taking Saskatchewan companies that are interested in this, trying to link them up with American investors. So that’s sort of the impetus for it. In the morning, I have an opportunity to give a speech to them. In the afternoon, I’m going to do some bilateral meetings with different investors trying to encourage them that Saskatchewan is a good place to do business. But that does mean when Saskatchewan businesses succeed, they employ people. And it works everybody’s advantage. So that’s the reason for the trade missions.”
Asked if the federal government is scaring away the investment Saskatchewan is seeking, Reiter said, “It’s concerning, right? Because, at the same time, we’re trying to encourage investment in oil and gas and mining, the federal government’s discouraging. No matter what they say, their actions speak louder than the words. They’re trying to chase investors away from oil and gas. So, you know, it’s a bit troubling, but, it’s funny. Investors watch what’s going on. They see the polling federally, what that looks like, and they recognize that while there might be a problem with the federal government, that provincially, it’s a business-friendly government.”
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