Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

The government of Saskatchewan has approved SaskPower’s construction of the $1.24 billion Boundary Dam Integrated Carbon Capture Storage Demonstration Project. The project will involve the refurbishment of a coal power generating unit at the six unit Boundary Dam Power Station near Estevan in southeastern Saskatchewan.

Carbon dioxide emitted from the 110 megawatt unit will be captured and sold to oil and gas producers seeking to use the product for enhanced oil recovery in mature reservoirs. As well, sulphur dioxide will be scrubbed from the flue gas to produce sulphuric acid.

SNC Lavalin and Cansolv, a Shell Global Solutions subsidiary, have been contracted to build the project with an expected completion date in 2014. When fully operational, the unit will yield approximately one million tonnes of carbon dioxide per year.

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Despite a consistent rise in Canadian oil shipped overseas in the last few years, less than 2 per cent of all Canadian crude exports are delivered to destinations other than the United States.  A lack of sufficient infrastructure is to blame.  However, Asian markets may soon assume a greater share of Canadian production if various projects come online to raise transport capacity to the West Coast of Canada. 

In the last month, pipeline and railway players have made the following announcements:

• Enbridge’s Northern Gateway pipeline received a $100 million injection from a corsortium that included China Petroleum & Chemical Corp., also known as Sinopec, to help the $5.5 billion pipeline get through the regulatory approval process. If approved, Northern Gateway will transport up to 525,000 barrels per day and may commence deliveries as early as 2016.
• Kinder Morgan plans to construct an 80,000 barrel-per-day expansion to its TransMountain pipeline that runs from Edmonton, Alberta to Burnaby, B.C. Kinder Morgan intends to accept open season bids for shipping commitments later this year, and may complete its expansion project by 2014 to 2015.
• Canadian National Railway Co. confirmed that it is in early discussions with Canadian oil producers and Chinese companies to ship oil via railway from Saskatchewan and Alberta to yet-to-be-determined West Coast tanker ports. 
• There are also reports that Canadian Pacific Railway Ltd. is working on a similar proposal for a “pipeline on rail” to the West Coast.

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The Moosomin World-Spectator reports that the Saskatchewan Court of Queen's Bench has now lifted its injunction against construction of a windfarm near Moosomin.

The original injunction was issued ex parte on August 25th and was in place for six days.  After a hearing of the matter on September 1 with all parties represented, the injunction was lifted and construction of the windfarm resumed the following day.  

Costs have reportedly been awarded to the windfarm owner.  Counsel has estimated that the cost of construction delays is approximately $74,000 per day. 

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The Saskatchewan Leader-Post is reporting that a Saskatchewan court has issued an interim injunction temporarily stopping construction of a windfarm near Moosomin.

The $60 million, 25 MW Red Lily windfarm, owned by Algonquin Power and Gaia Energy, was to have come into service late in 2010 or early in 2011.

The project was to have been constructed with minimum setbacks of 550 metres from residences.  Landowners are seeking to have turbines at least 2000 metres from residences.

The interim injunction stops "all construction-related activity".  Further arguments on the injunction application will be heard on September 7. 

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Saskatchewan is continuing to move forward with its proposed greenhouse gas (GHG) cap-and-trade program, with draft offset program methodologies expected to be released next month. The guidance documents will supplement the previously released draft regulations – The Management and Reduction of Greenhouse Gases Regulations– which are expected to gain final approval in fall 2010.

Saskatchewan has set a target of reducing GHG emissions to 20% below 2006 levels by 2020. The proposed emissions threshold for regulated emitters is 50,000 tonnes of CO₂ equivalent in any year, and regulated emitters will be required to reduce emissions by 2% per year from 2010 to 2019 to meet the 20% reduction goal.

Regulated emitters will be able to purchase offset credits created from activities that have reduced and sequestered GHG in Saskatchewan and that occurred after January 1, 2006. In addition to offset credits, regulated emitters can make so-called “carbon compliance payments” to the Saskatchewan Technology Fund Corporation. Proceeds from this fund will be used to invest in GHG reduction initiatives and research.

The proposed Saskatchewan GHG cap-and-trade program is similar to that of Alberta, where the emissions threshold for regulation is higher at 100,000 tonnes of CO₂ equivalent. In response to stakeholder comments regarding liquidity of the markets, the two provinces are considering linking their carbon trading programs.

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