Special Interview: Minister Boyd of Saskatchewan
On October 26th, CBJ had the privilege of speaking with the Honourable Minister Boyd about the potential for the oil and gas industry in Saskatchewan. The province’s boom has been in effect throughout the recession, so we were happy to learn about Saskatchewan’s efforts in the energy industry.
CBJ: Let’s start with the recent sale of Crown petroleum and natural gas rights. What is the plan for the $83.2 million dollars received in revenue?
The revenues we that received from crown petroleum and natural gas rights sales goes into the general revenue fund to be used for the operations of government of Saskatchewan. This is a very good sale; the 2009 sales are on target for meeting the projected revenues that we are expecting from the crown and petroleum and natural gas rites.
CBJ: Continuing on the theme of the Saskaboom, can you tell us about discovered and undiscovered natural gas resources in the province, and what they’ll do for the province?
We are very excited about the potential for natural gas resources in Saskatchewan. We have a large discovered base in Saskatchewan of natural gas and there appears to be a great deal of potential in terms of shale gas in the future for Saskatchwan. New technology is certainly opening that up and we are very hopeful and expect to see good results in the future from it. However, natural gas prices are relatively low right now so it is, I think, restricting some of that development at the moment but we expect as prices increase we will start to see a great deal more activity.
CBJ: What is the most prominent issue the industry, or the Ministry, is currently facing?
Well, shale gas is very difficult to extract. It is similar to oil in what is known as a tight oil formation, and it is very difficult to get out of that formation. However, technology is changing and improving and seems to be showing great promise in unlocking shale gas from the formation.
Natural gas is not refined that much. There is work done in terms of taking out water and other impurities, that sort of thing. It doesn’t require what you would normally associate with an oil refinery to put it in condition for use by the consumer. It is a relatively minor process compared to oil turning it into gasoline.
To get back to your question though, the most prominent issue to for energy and resources department ministry would be the whole area of potash taxes. The revenue we are getting from potash now is dramatically down from last year as a result of sales not coming in from China. This is a significant issue for Saskatchewan, but it also has a very good ending to the story. We expect there is going to be a return to revenues in 2010 and we also expect through expansion of all of the mining companies who are looking at in terms of potash we will see a very, very strong revenue base for the province in the future.
Potash is a very large industry. It would be largest in terms of revenue for the province of Saskatchewan in the resources sector. The potash industry employs some 20,000 people.
CBJ: What’s your position on the Carbon Dioxide Enhanced Oil Recovery (EOR) initiative?
This is a very important initiative that Saskatchewan has been involved with for a number of years. It is capturing the CO2 off of oil and gas refineries or other installation and pipelining it into an oil field. It’s then pumping it November/December 2009 The Canadian Business Journal 35 Honourable bill boyd into the ground which has a very positive impact in terms of the technology associated with it—it is unlocking further oil from the reservoir. So it is a very important technology in that respect. [The initiative] is also great in terms of reducing CO2 emissions in our province. So it is something the province is active and very interested in, and is looking at adding to a number of fields and to our coal generation.
CBJ: Where do you think the OER places Saskatchewan on a national scale in terms of environmental responsibility?
I think it positions us very well for clean climate initiatives now and into the future. This isn’t science or anything experimental; it has been going on for about nine years in Saskatchewan— pumping literally thousands of tonnes into the ground for safe keeping. It certainly helps in terms of enhanced oil recovery. As a government we are also taking further initiatives to clean up our coal generating stations, adding post-combustion and recycling, essentially [making use out of] the CO2 that will be used for further enhanced oil recovery programs
CBJ: How do you feel the role of your department has evolved in the past few years? What changes in priorities do you see for the future?
I think as a government within this ministry and department there have been some very positive developments. Certainly there is a very positive business climate in Saskatchewan that has resulted in oil companies shifting their resources from other jurisdictions to Saskatchewan in terms of drilling activity, discovery, seismic activity, and pipelining. This has been something that is very, very positive for Saskatchewan, and we expect that this trend will continue into the future. Our priorities here in Saskatchewan are to try and maintain as modest a tax base as we can, not only for the general population but certainly in the oil and gas area as well. We think this is going to be very beneficial to our economy going forward.
CBJ: Any other messages you’d like to promote?
The overriding message is that we believe Saskatchewan has a rich resource base—whether it is oil and gas, the mining sector, agriculture, or other. We think we are a competitive jurisdiction in tax and I think the proof is that companies are moving here, moving resources to Saskatchewan, moving their operations—and we think that is great for our economy.