Estevan 鈥� With federal regulations that spell the end of conventional coal-fired power generation by 2030, the Saskatchewan government extended a $10 million hand on Feb. 28 to the two communities that will be most affected by it. Premier Scott Moe, along with Minister of Government Relations Lori Carr (MLA for Estevan), gathered with Estevan Mayor Roy Ludwig and Coronach Mayor Trevor聽Schnell in Estevan city council chambers to sign a ceremonial document, 鈥渢o cement the provincial government鈥檚 support of our coal communities,鈥� Carr said.
This comes at a time where the coal industry is beginning to see layoff, even before the impending 2021 shutdown of Boundary Dam Unit 4 and Unit 5 in 2024.
Estevan is home to the Shand Power station, Boundary Dam Power Station and its associated Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project, and the Estevan Mine run by Westmoreland Mining LLC. Coronach is home to the Poplar River Power Station and Poplar River Mine. Westmoreland employs 167 people there. These numbers do not include the workers at each of the power plants.
On Feb. 18, Westmoreland asked for voluntary layoffs or early retirements at the Estevan Mine, as they will be reducing the Estevan workforce by 25 positions. The company鈥檚 website says there are 369 employees at the Estevan Mine, while the United Mine Workers of America says they have 325 members at the mine. 聽
聽鈥淗aving been raised, right here in the city of Estevan, where I was born, where I chose to raise my family and where I choose to have my future, I鈥檓 really pleased to have the premier here today and have him show support for our communities,鈥� Carr said.
Moe said Estevan and Coronach have quite literally powered this province for the better part of the last century. 鈥淲e expect this region will play a crucial role in our energy industry for many years to come. But there is a fundamental change that is coming soon, and we鈥檝e discussed that. We need to adapt to these changing circumstances, and we need to do it together as well.
Moe said he was announcing the funds 鈥渢o support the transition from coal and other industries in Estevan and Coronach.鈥�
Getting to this point, he said, 鈥淚n December 2018, the Government of Canada announced the phase out of traditional coal-fired electricity by the year 2030 as part of their climate change strategy. This means that unabated coal, or coal-fired power stations, the ones we have in Estevan, and Coronach, must close when they reach 50 years of age, or by 2030, whichever comes first. That鈥檚 the federal policy is put into place.
鈥淪o we have options as we move forward,鈥� he said. This includes carbon capture and storage, which is operating at Boundary Dam Unit 3, which he had just visited, and had captured 3 million tonnes of CO2 to date.
鈥淎nother option we have, as we move forward, is the opportunity for natural gas-fired, in conjunction, possibly, with a carbon capture and storage facility,鈥� he said. This is the first reference Pipeline News has heard from government officials, of the possibility of a natural gas power plant for southeast Saskatchewan. It was a reference Moe repeated later on during the press conference.
鈥淎 third option we have for this area is small modular reactor technology,鈥� Moe said, referencing an memorandum of understanding recently signed with New Brunswick and Ontario to develop that nuclear power generation technology. Both of those jurisdictions have current nuclear reactors, and Saskatchewan has uranium production.
Moe continued, 鈥淲e need to collectively prepare for the next number of years. So today, we are very pleased to announce a $10 million investment into the City of Estevan and Town of Coronach, as well as the neighbouring municipalities. This is a new transition fund that will be overseen by a committee that will include representation from Estevan, it will include representation from Coronach, and from the government.
鈥淪ome of these funds may be used to explore the viability of new industries for our region. This transition fund was created at the urging of Minister Carr, quite frankly and (Environment Minister and SaskPower Minister Dustin) Duncan, as well as other MLAs in this area,鈥� he said, noting they鈥檝e been strong voices in cabinet and caucus.
鈥淣ow this is just part of our government鈥檚 efforts to make sure this region can continue to grow,鈥� Moe said. Competitive taxes and regulations for the oil and gas sector is one area, and the government recently formed a cabinet committee to look at advancing pipelines.
鈥淭oday, my pledge, on behalf of the people of Saskatchewan, is that we will be with you. We will be there for you, in the years ahead,鈥� Moe said. 鈥淲e will do everything to ensure this region continues to move forward, and we will do it together, starting with this agreement.鈥�
Government Relations Minister and Estevan MLA Lori Carr said.聽 鈥淚 grew up in Estevan and spent a decade on its city council, so I know first-hand the tenacity, determination and hard-work ethic of everyone in the area.
鈥淚t鈥檚 those characteristics that will help us re-imagine this great part of our province and leverage new economic opportunities as we go through this time of change.鈥�
Three options for baseload power
Speaking to reporters, Moe said a decision hasn鈥檛 been made yet on future power generation, 鈥淎s we move forward, a number of items I think will factor into this decision. The first of those is the transmission infrastructure that we have coming into these areas of our province is significant, and should be utilized. As we move forward, we do need to have some type of generation capacity in these areas so we can utilize that transmission infrastructure.
鈥淭he baseload generation capacity that, at this point in time, would be in consideration for this area would be first of all coal with CCS, as the federal government is asking us to phase out of unabated coal by the year 2030.
鈥淭he second option would be some type of natural gas option, and we鈥檝e done that in other areas of the province. And the third would be the potential for small modular reactor technology 鈥� nuclear power in this area,鈥� he said, noting that MOU with New Brunswick and Ontario.
鈥淲e do have until 2030 until the actual transition of the bulk of these plants has to occur, and we are giving up, in the way of Shand, about 12 years of the asset life of that facility by taking it out of production, or by adding on a carbon capture facility by that time.
鈥淭hose are the three options that we have. Coal with carbon capture and storage, natural gas, small modular reactors, or some mix of those three put together.鈥�
CO2 for the oilfield
Asked by Pipeline Newsabout the important of CO2 for enhanced oil recovery in the oilpatch, Moe said, 鈥淚 think that should be part of the discussion that we have as the government of Saskatchewan as we make these decisions. It鈥檚 not only about the price of power. It鈥檚 not only about the emissions that our facilities are emitting. It鈥檚 also about the economic activity, not only in the mine and plant itself, but in the spinoff activity, in the enhanced oil recovery phase.
鈥淎s you know, in our plan for growth, we have a target to grow our energy exports to 750 (thousand) barrels per day in this province. Certainly, carbon capture and storage, or enhanced oil recovery will be part of that as we move through the next number of years.
鈥淲hat would be very helpful in advancing that technology would be the federal government coming out with a similar program to what they have south of the border, the 45Q carbon capture incentive. (It) would be very beneficial for the economics of any of these decisions, very beneficial for the energy industry in the province, and we have asked them to consider such an incentive as what they have in the United States. It would level the playing field we have in this regard, and would most certainly foster clean tech investment in carbon capture and storage, and continue to advance that technology along and do wonders in Saskatchewan, not only for the environment, but most particularly for the southeastern part of the province,鈥� Moe said.
The 45Q Moe referred to is an American federal tax credit adopted in 2018 which increases over time from $10 to $35 per tonne of CO2 captured and used in enhanced oil recovery, and $20 to $50 per tonne for saline storage, like the Aquistore project.
Moe said factors include the emissions of that type of mix, and the cost of power for the province. Competitive power rates are important, the premier noted, for the rest of the economy.
Moe said Saskatchewan has been at the forefront of CCS. He and government ministers have met with companies around the world that are pursing CCS. 鈥淚t鈥檚 important, if we鈥檙e actually going to achieve emissions reductions far beyond the borders of Saskatchewan.鈥�
If there was an incentive like 45Q, it would change the economics for Coronach as well, he noted.
Moe noted the province has a commitment to engage with these communities beyond the $10 million. An example he provided would be small modular reactors, although that decision has not yet been made.
