Carbon Tax Arguments Over; Now Waiting For The Decision

Arguments are over in a Regina courtroom, and now the decision on the future of a federally imposed carbon tax is in the hands of the Saskatchewan Court of Appeals.

The judges heard arguments from the provincial government and concerned parties intervening on their behalf on Wednesday, and Thursday it was the chance for the federal government to present their case.

The province is challenging the carbon tax on grounds it is unconstitutional.

“We think the proper position for our province to take is not to have a carbon tax that singles out our province,” said Saskatchewan Justice Minister Don Morgan. “We think the right thing to do would be to sit down and work with all of the provinces and develop good alternatives to reduce carbon emissions.”

The judges hearing the case have reserved their decision. Many are hoping they deliver the decision by April when the carbon tax would take effect. However, it could take up to six months or a year before the decision is finalized.

 

SOURCE: Steven Wilson, DiscoverWeyburn.com

Stoughton Area Generates Top Dollar per Hectare in Latest Crown Land Sales

Crown petroleum and natural gas rights sales raised a total of $10.2 million dollars for the province in February.

Two parcels consisting of 64.7 hectares each generated the top dollars per hectare in this public offering; located northeast of Stoughton, they were purchased by Synergy Land Services Ltd. for roughly $3,200 per hectare and are prospective for oil in the Bakken Formation. The average price per hectare was $596 for this period, up from $316 in 2017-18.

Two exploration licences in the Estevan area were purchased for over $900,000. One licence, worth nearly $850,000, was located northeast of Estevan, and purchased by BASM Land & Resources Ltd. The other exploration licence, north of Gainsborough, was purchased by Burgess Creek Exploration Inc. for $60,389.09.  

This was the sixth and final offering of the 2018-19 fiscal year, bringing the cumulative total to $57.5 million.

Kindersley Ag and Oil Forum Looking to Be Heard with Letters to the Senate

This afternoon an Oil and Ag forum was held in Kindersley for supporters of the agriculture and oil sectors.  Guest speakers included Rick Peterson of Suits and Boots, MLA Ken Francis and researcher-writer Vivian Krause.  During the event attendees were able to sign letters that organisers intend to send to the Canadian Senate during discussions for Bill C-69. 

Many people braved -40 degree temperatures to make the trip to Kindersley to show their support.

 

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The letter attendees signed during the Ag and Oil Resources Forum

 

 

Organizer Darla Dorsett spoke about the the purpose of the letters "By having these letters prepared, it's not a petition, it's a letter to the senators, so that our voice in the west is heard and so no one can deny that we haven't done something".

 

Saskatchewan's Response to Supreme Court Ruling on Abandoned Oil Wells

The Saskatchewan government is backing a recent Supreme Court ruling which prohibits oil companies from abandoning their environmental responsibilities in the event of bankruptcy or insolvency.

After an Alberta based energy company attempted to walk away from inactive wells following insolvency, recent court proceedings established that environmental regulations are to be the responsibility of the oil company in question. Doug MacKnight, Assistant Deputy Minister for Petroleum and Natural Gas with the Ministry of Energy and Resources, stated that given the alternative course of action in regards to orphaned wells, this is a good decision.

In Saskatchewan, when a well is abandoned, the clean up and environmental responsibilities are in the hands of the Orphan Fund Procurement Program through the provincial government and funded by a levy within the oil and gas industry. MacKnight said in the current fiscal year, the number of orphaned wells rang in at approximately 249, which is slightly higher than previous years but still manageable through the program.

The cost to properly decommission an orphan well can range from $50,000 all the way to $1 million, with last year’s provincial budget partitioning $4 million for the Orphan Fund Procurement Program.

MacKnight explained the decision by the Supreme Court may have saved the consumer-paid levy from rising. If oil companies were able to walk-away from inactive wells and the Orphan Fund Procurement Program saw an increase, that would be reflected back in the levy which would ultimately come out of theSa pocket of the consumer.

The ruling now gives companies clear and concise rules and regulations moving forward and MacKnight added that it was a decision that had the support of many in the industry, including oil companies.

Why You Should Decommission Your Old Wells

Drilled or bored wells that are no longer being used, pose health and safety concerns that could be avoided by properly decommissioning the well. Old wells that are no longer serving their original purpose should be properly decommissioned to avoid potentially contaminating your current water source and causing injuries to people and animals alike.

Kerry Lowndes with Agri-Environmental Technical Services through the South Saskatchewan River Watershed Stewards, said that water quality and physical safety are the two main concerns that should entice producers, RM’s and anyone with an open unused well to get it decommissioned.

Lowndes stated that it is not uncommon for someone to be walking along and accidentally step in to the hole and for the very young or elderly, this could cause potentially severe injuries. Same holds true for animals, cats, dogs, calves, any wildlife and livestock would also be susceptible to stepping into the old well and could very easily break a leg or worse.

Secondly, water quality can be concerning if an old well is not properly decommissioned. There are variables that could compromise your current water quality, including proximity of the old well to the new well and if it is down hill where runoff carrying chemicals and other harmful substances could empty into. These factors increase the chance that those contaminants are making their way into your water system you are currently using.

If you stop using a well and do not plan on using it in the future, Lowndes encourages residents to take care of it at that time as you likely may be the only one that knows where the well is. Others may literally stumble across it, or if the property is sold, old wells are not included on the land reports and therefore could be putting the new owners in harm's way.

Through the Farm and Ranch Water Infrastructure Program, funding is available to help offset the costs associated with decommissioning a well. The government program allows eligible projects a rebate of 90 per cent of eligible costs to a maximum payment of $10,000 per project. For more information on this funding, you can view the details here.

Lowndes along with other professionals were available during a Water Well Workshop in Leader last week, to answer not only questions regarding proper decommissioning but also what to look for when choosing a well site and maintenance as well. For more information on upcoming workshops or to learn more about decommissioning wells, you can contact Kerry Lowndes at 306-460-4987.

Recognizing Excellence in the Oil Industry

The West Central Saskatchewan Oilmen’s Association presented their Oilman Of The Year award for 2018 to Trent and Carey Herner of Precision Instrumentation, a company who has been a part of the Kindersley and area oil industry for over 20 years. 

Curtis Sackville, secretary for the West Central Oilmen’s Association (WCSOA), shared what the award signifies and why the Herner’s were so deserving.

“The award is to recognize those within the oil sector for their contributions to the industry, going above and beyond in their work and also who give back to the community and are really just a good representation of the oil industry. A lot of times we just do what we do, sometimes with not a lot of acknowledgement for going the extra mile. It’s important to give credit where credit is due and these two guys have added value to both the community and the industry and are more than deserving of this award,” said Sackville.

Many in the area may be well aware of the two events put on by the WCSOA, the bonspiel that just took place and the golf tournament coming up in May, however, there is more to the association then the semi-annual gatherings. “It’s about comradery, it’s about bringing people of the oil industry together and putting a face to the name and really just letting every guy and girl know that we have each others back. It’s about building relationships and giving support to those that maybe we don’t work directly with everyday, but are still apart of an industry that is so vital to our area and Canada,” said Sackville.

Comradery by definition is: the spirit of friendship and community in a group, those who keep each other upbeat despite the difficulty of their circumstances...A close friend or fellow soldier, someone who comes to mind when you say, “we are in this together”.

Given the current state of the industry, Sackville added that this is the time to stick together and show our support for everyone in the industry. He said that they are always looking for more people to come out to the events and have fun with those they share the industry with and that they hope to grow the numbers at each event, not only for the industry support aspect, but as Sackville stated, “anyone who’s been.. knows they’re a pretty good time..”.

Yellow Vest Rally in Outlook

Yellow vest rallies have been spotted all over Canada. Outlook has adopted the movement and a group of protesters braved the cold this past Saturday.

Steve Forbes attended the protest this Saturday. He gave his thoughts on the movement. "Here in Canada, the yellow vest represents working people more than anything, people who are doing work, opposed to people sitting in offices making decisions that affect them."

The yellow vest movement originally started in France last year. Canada has also taken up the movement, with many communities organizing rallies to protest decisions made by the federal government.

The protest is opposed against the federally imposed carbon tax, as well as Bill C-69, which they believe will hurt the oil and gas industry. The carbon tax will come into affect April 1st in Saskatchewan.

They are also against uncontrolled immigration. Forbes noted they are not at all against immigration, "We recognize that we are all immigrants ultimately... but we're against the uncontrolled immigration we see these days, bringing people in in such a way that we can't assimilate them into our society. They need to fit in to our society."

Forbes said they are also pushing for more federal government support for the oil and gas industry, "One of our specific concerns in Western Canada is the difficulty in getting pipelines built." Forbes said he used to live in the Peace River Country in Alberta, where they had trouble getting oil to market so he knows how a collapse in the industry can affect working families, "I've seen people lose their cars, their homes, it's a huge hardship, certainly in Alberta and Saskatchewan."

There was a mixed reaction to the rally in Outlook, with many supporting and others disapproving of the protest. There will be a second protest in the town on February 2nd.

Methane Emissions In Flaring And Venting Targeted In New Plan

Over the next few years, the Saskatchewan government is targeting methane emissions from the oil and gas sector.

The ministry is working on a plan to remove 4.5 million tonnes of methane gas due to venting and flaring by 2025.

“To us ... it just makes common sense,” said Saskatchewan Minister of Energy and Resources, Bronwyn Eyre. “We’ve got about 20 percent of natural gas being wasted in Saskatchewan by flaring and venting by producers.”

Consultation was done by the province with members of the industry, which included Crescent Point Energy, Canadian Natural Resource Limited, Whitecap Resources, Inc. and Husky Energy, among others.

The province isn’t sure if this will meet the federal plan for reduction of greenhouse gases.

“We feel pretty confident that our plan will be accepted, and we certainly hope it will,” Eyre said. “It’s results-based and we think it will result is real and measurable emissions rather than theoretical presumed reductions based on models and assumptions, and it’s about flexibility.”

Companies can make investment decisions for all their production facilities, she said.

The consultation with the industry was extensive.

“They certainly are telling us they prefer our plan to the federal plan,” Eyre said of industry. “We feel that has, we hope, traction as well, and certainly it should mean something when members of the sector are on board.”

Part of the government’s plan is to invest in expanding the infrastructure and introduce an expanded oil and gas processing investment incentive and expanded Saskatchewan innovation incentive, which would be a royalty credit system within the oil and gas industry

“We feel it’s necessary to have something infrastructurally incentivizing that goes hand in hand with these goals,” Eyre said.

SOURCE: Corey Atkinson, DiscoverEstevan.com

An Optimistic, yet Cautious Start to the Year for the Oil Industry

Experts say that Saskatchewan still shows as a favourable market for the oil industry despite companies sharpening their pencil on finances.

Premier Scott Moe made comments following Alberta’s announcement of the oil production curtailment starting January 1, 2019, stating that although the province supports Alberta’s decisions, Saskatchewan’s market is not necessarily comparable because of the different oil between the two provinces.

Ben Brunnen, vice president of oil sands operations and fiscal policy for the Canadian Association of Petroleum Producers (CAPP), said that in regards to the curtailment, companies that have an invested interest in both Alberta and Saskatchewan will likely start to look at Sask. for projects as there was no curtailment implemented here. As others have also stated, Brunnen reiterated that the curtailment does signify a crisis within the oil industry that obviously will raise concerns for investors and companies within the oil sector and may have them re-evaluating future decisions.

Brunnen however, touched on the complexities of the current oil market and that the curtailment is only one leg of the stool. At this point, the Alberta government is working to bring the inventory numbers down, in which it is likely the curtailment will be lifted. Although this would allow companies to resume operations, there are still two major factors, the Trans Mountain Pipeline and Bill C-69, that pack more of a blow to the oil sector.

“If we see Bill C-69 pass as is, we fully expect not to see any reasonable substantive incremental investments into pipes in the Canadian economy for the foreseeable future and that’s a problem for our long term prosperity,” said Brunnen

He explained that when investors originally put money into Canadian oil, there were indications of growth and forward movement which would bode well for their dollars. Given the unfavourable changes in recent past, it is no surprise, investors very well may be taking their money elsewhere, which would further cripple the industry.

During the interview, Brunnen said companies may not necessarily be treading water and waiting to see what happens, however with contracts back up for bid and lack of action in the area, it is apparent that 2019 is not off to a booming start. There are still many decisions to be made that will all play a part when predicting the future prosperity of oil within Western Canada, Brennen shared that CAPP has drafted a revision on Bill C-69 in an effort to relay to the federal government the dire results that could ensue if the Bill is put through as is.

Latest Numbers from December's Public Offering Released

The latest numbers are in for December's public offering of crown petroleum and natural gas rights generating $20.1 million for the province.

While most of the attention was placed in the Wilkie and St Walberg area, 5,473.394 hectares of petroleum and Natural gas and 2,800.373 hectares of petroleum natural gas lease were available in the Weyburn-Estevan area totalling $3,083,599.39 of revenue.

“Saskatchewan continues to be an attractive destination for investment by the oil and gas industry,” Energy and Resources Minister Bronwyn Eyre said. “Our competitive policies and incentives, designed in collaboration with industry, encourage sustainable activity, job growth, and good resource management.”

The highest bid for a 5,568.500 hectare parcel of land east of Wilkie purchased by BASM Land & Resources Ltd for $9,126,103.28.

The final offering for the fiscal year will be held on February 5, 2019.

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