Pipeline Online Election 2024: Saskatchewan Party
Election 2024: Increase oil production to 600,000 bpd with eyes on a million, keep coal until nuclear is ready: Saskatchewan Party.
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. Read the full article on pipelineonline.ca
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?”
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.”
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.”
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.”