NEWS FROM THE FIELD : ENERGY

Drilling in Sask comes to a halt

Humboldt Journal – Usually, there would be 30 to 50 rigs drilling in Saskatchewan, with most drilling for oil, but a few drilling for potash or helium. Right now, there is only one rig active.

According to Rig Locator, as of late July, that single rig is drilling for helium.
The active drilling rig count is one of the key leading indicators of the health of the oil industry. Rig Locator reports no drilling rigs have been drilling for oil in Saskatchewan since the end of the winter drilling season in mid-March.

Additionally, Saskatchewan’s oil production went from 502,700 barrels per day in March 2020, to 361,000 bpd in May, a decline of 28.2 per cent. When oil prices cratered in April, many oil producers shut down substantial portions of their production and all ceased drilling.

The tremendous destruction in demand for oil around the world came with the onset of the COVID-19 crisis which occurred in mid-March. This coincided with Saudi Arabia and Russia flooding the market with additional oil.

In mid-April, West Texas Intermediate (WTI) oil briefly went into negative pricing territory for one day. Since then WTI has come back to US$40 per barrel, but drilling has not resumed and rigs are parked throughout the province.

SK has right model for orphan wells: CNRL

Financial Post – Alberta should follow Saskatchewan’s example in its approach to distributing funds for cleaning up old oil and gas wells, the head of Canada’s largest oil and gas producing company said.

“I think what Saskatchewan did better than some of the other provinces is they worked with many of the stakeholders in their design (of a well clean-up program),” Canadian Natural Resources Ltd. president Tim McKay said.

CNRL has been one of the most active companies in the oil patch when it comes to plugging and remediating inactive and uneconomic oil and gas wells.

In the midst of the COVID-19 pandemic, the federal government announced $1 billion to fund such clean-up efforts in Alberta, British Columbia and Saskatchewan as a way to address an environmental problem and to put unemployed oilfield workers back to work.
The program in Alberta has been criticized because initially its criteria for who would get funding was unclear and the system was swamped with applications, though the province has made adjustments over time.

In Saskatchewan, which is distributing $400 million in funding to oilfield services companies to clean up wells, CNRL says the program is running smoothly.
The scale of the problem in Saskatchewan is also significantly smaller than it is in Alberta, where over 91,000 inactive oil and gas wells dot the landscape and where there are nearly 3,000 orphan oil and gas wells with no owner responsible for cleaning them up.

Junior miners ready to pounce

Saskatoon Star Phoenix – Spiking gold prices could send junior miners to the hills in search of the metal.

That’s because gold hasn’t reached these heights since 2011. After years of hovering at about $1,300 US an ounce, it climbed to more than $1,800 US in July. That’s left junior miners, who explore and drill holes looking for deposits, primed to move on wealth hidden in the province’s north.

“Here we are now in a frenzy. Literally, a frenzy,” Warren Stanyer,P.Geo., CEO of ALX Resources Corp., said. “Junior mining companies are getting millions of dollars from bankers and investors because everyone thinks gold’s going to go a lot higher.”
He attributes that hike to the uncertainty roiling the economy. Governments issuing more money and entering into more debt, he said, strengthened gold and helped cash flow for firms like his.

ALX Resources has been active. On July 9, it announced it acquired Sceptre Gold Project, which is about 125 kilometres east of La Ronge.

The belief that Saskatchewan gold has gone overlooked is part of that optimism.
“There’s certainly no reason to think all the gold has been found,” said University of Saskatchewan geology professor Kevin Ansdell, P.Geo., FGC, FECC Hon.

He pointed to SSR Mining Inc.’s Seabee gold mine located approximately 125 kilometres northeast of La Ronge. In 2019, it marked its fourth straight year producing a record amount of the metal.

An issue, though, is that gold deposits in the province are relatively small, Ansdell said. While they can be economically viable, even success stories like Seabee’s gold deposit can be small compared to larger deposits around the world.
That may leave room for smaller companies in the province to explore and find deposits, Ansdell said.

“There’s good potential, so it’ll be interesting to see what happens over the next year or two.”

Rare earth processing facility announced

Pipeline News – The Government of Saskatchewan is providing $31 million in funding for a rare earth processing facility in Saskatchewan.

The processing facility will be owned and operated by the Saskatchewan Research Council (SRC) and will be more than 69,000 square feet. It will be built in Saskatoon.
Premier Scott Moe said the money will be used for the design, construction and commissioning of highly specialized equipment required for the processes.

The premier said it will be the first of its kind in Canada and will begin to establish a rare earth element (REE) supply chain in Saskatchewan, forming an industry model for future commercial REE resource expansion in the province.

Global demand for REEs is expected to increase significantly in the coming decade as demand for electric vehicles, renewable power generation and all forms of electronics increases.

SRC president and CEO Mike Crabtree, P.Eng. said the facility is expected to be fully operational in late 2022 with construction beginning this fall.

Rio Tinto eyes nickel near Stony Rapids

Saskatoon Star Phoenix – One of the world’s largest mining conglomerates is set to expand its stake in Saskatchewan.

In late August, Rio Tinto Exploration Canada said it has an agreement with ALX Resources Corp. for the latter’s nickel project, about 20 kilometres northwest of Stony Rapids.

In the deal, Rio Tinto may acquire up to an 80 per cent stake in the project. It can do that by spending $12 million in exploration costs over six years and by making cash payments to ALX totalling $125,000. ALX Resources currently owns the whole project, while Rio Tinto will act as an operator.

Rio Tinto’s decision was an endorsement of the project’s potential, ALX Resources CEO Warren Stanyer, P.Geo. said.

“(It’s) taking a gamble on nickel in Saskatchewan,” Stanyer said. “… These people are mine finders. They really don’t like to dabble too much.”

However, he added, years of sustained development activity may be necessary before the investment translates into more local employment.

Cameco to reopen Cigar Lake mine in September

CBC Saskatchewan – A major Saskatchewan uranium mine is expected to reopen in September.

Cameco announced it would be reopening its Cigar Lake mine after temporarily closing in March over COVID-19 concerns.

At the beginning of the closure, the uranium mining company said it made the decision after realizing it’s difficult to maintain physical distance at a fly-in mine.
The company expects it will take two weeks to get the mine back into production and will only reopen the mine if it is safe to do so.

Normally, 300 workers are employed at the site.

The Key Lake/McArthur River mine site will remain closed. The site was temporarily shut down in 2018 due to a production curtailment.

USask engineers to study possible COVID-19 transmission through HVAC systems

CBC Saskatchewan – Engineers at the University of Saskatchewan received a grant to research the effects of smaller particles of the novel coronavirus and possible transmission through HVAC systems.

Carey Simonson, P.Eng., a professor of engineering at the university, is part of the team who were awarded the Natural Sciences and Engineering Research Council (NSERC) grant.

He said while the public is doing its part in preventing the spread of the virus by washing hands and wearing masks, doing so only protects against the bigger particles of COVID-19.

“The individual virus is around 0.1 micrometer, so we think of a human hair [that’s] around 100 micrometers, this is a thousand times smaller,” Simonson said. “The smaller aerosols that we can’t see, they can travel certainly longer distances.”
He said COVID-19 particles could be suspended in the air for hours.

“It’s enough of a concern that our systems, our HVAC systems, should consider the possible transmission through the ventilation, heating and cooling systems,” Simonson said.

He said the main aspect of their study is providing fresh air for spaces and the resulting effect on the smaller particles.

He said they’re looking specifically at ventilation and air-to-air energy exchangers, and whether they would bring in some of the contaminants that were sent out of the building back into it.

Simonson said it is a six-month project and there could be more research done with the apparent “new norm” of COVID-19.

Masonry leading construction in remote Saskatchewan regions

Journal of Commerce – Journal of Commerce – At the end of June, Saskatchewan architect Heney Klypak of Wallace Klypak Architects Ltd. was called to a remote First Nations reserve to examine fire damage in a school’s change room caused by an electrical short in a vanity light.

Klypak credits the stringent building standards now in place by Indigenous Services Canada (ISC), which sets out a life expectancy of 60 to 70 years for institutional buildings on First Nations lands. That longevity is best met using masonry.

Saskatchewan retains many older masonry structures built over a century ago.
Sasha Kirin, P.Eng., a civil engineer employed by the Canadian Masonry Design Centre, said the advantage Saskatchewan has is a long history in masonry.

Klypak said masonry structures have provided architects with the ability to provide design features that would be difficult to replicate with other building materials in remote areas.

Engineer running to be next mayor of Saskatoon

Global News – Engineer and business owner Zubair Sheikh, P.Eng., wants to be the next mayor of Saskatoon.

He said the incumbent council and mayor Charlie Clark have cost taxpayers too much money and residents need a break as they struggle to recover from the coronavirus pandemic and subsequent lockdown.

To that end, he’s promising better fiscal management and no tax increases for four years if he’s elected in the upcoming civic election.

“To be a mayor of a city you have to be a good businessman,” he said, touting his experience running his engineering firm, Active Engineers Saskatoon. “If you will think the city is your own business, you will be a good mayor. You don’t need to be a politician.”

Sheikh’s 13-point platform includes policies improving infrastructure “as deemed necessary,” eliminating unnecessary spending and attracting year-round tourism by offering tax incentives to construct an indoor theme park.

He also plans to bring in investors to construct charging stations for electric vehicles and for the city to attract offices for companies that refine uranium — an industry that he predicts will expand.

Sheikh said he would continue to support the police budget, $110.4 million in 2020, and crime reduction initiatives.

But he said the city should not spend close to $70 million on a new library. He said providing cheaper internet rates to students and their families would have a greater positive impact on their education.

He said all of his programs will be paid for with the current tax rate and by reducing city expenses, but he wouldn’t know where to find those savings until he was elected.

Dark predictions come true for solar industry

Regina Leader-Post – It has been eight months since Saskatchewan’s solar companies predicted that a shift away from SaskPower’s previous net metering program would decimate their industry.

Now, some say, those warnings have come true.

Brenden Owens, co-owner of Prairie Sun Solar, said the residential solar market has “fallen off a cliff.” His company had eight staff on board at its peak. Now it’s just him, another owner, and one part-time employee.

He knows of four solar companies that have shut their doors for good.

SaskPower’s own data shows that far fewer homeowners have hooked up solar energy systems since it introduced its “revamped” program, which cut the value of credits customers could earn through excess power they send back into the grid. It offers 7.5 cents per kilowatt hour — the price SaskPower pays for power — instead of the 14-cent retail rate under the previous net metering program.

The provincial government got rid of a rebate for 20 per cent of up to $20,000 in installation costs at about the same time in the fall.

SaskPower accepted 118 applications since the launch of the new program in November. That’s down sharply from the 721 applications received under the previous program during a comparable period, from November 2018 to June 2019. It’s lower than any year since 2015-16.

City unveils first electric bus

CKOM – Saskatoon Transit will be testing an electric bus over the next year as part of its public transport fleet.

The city says it is hoping the addition of the electric bus will result in lower fuel bills and a reduction of greenhouse gas emissions.

The total cost of the project is estimated to be $533,600, of which $234,300 is from the Green Municipal Fund (GMF), a fund financed by the Government of Canada and administered by the Federation of Canadian Municipalities (FCM).

This is a milestone in Saskatoon’s Low Emission Community Plan, which has a goal of the transit fleet being 100 per cent electric by 2030.

The electric bus project’s net carbon emissions reduction is expected to be 50.3 tonnes of CO2 per bus per year (accounting for the bus and the electrical grid’s emissions-intensity factors) and is expected to save $27,500 in fuel costs per bus per year.

The city says some of the benefits of the new bus include improved air at bus terminals, less noise pollution along bus routes and lower operation and maintenance costs.

SaskPower plan for more electric vehicles

Global News – With more electric vehicles hitting the streets in Saskatchewan, SaskPower and electric vehicle associations are looking to hear from drivers about their experiences.

The number of electric vehicles is growing every year in the province. However, finding a place to charge can be a challenge.

There are around 50 public charging stations in the province, according to SaskPower.
Over the past decade, the number of registered electric vehicles in Saskatchewan has grown from 28 in 2015 to more than 300 in July 2020, according to SGI.
The survey being conducted by SaskPower, the Saskatchewan Electric Vehicle Association (SEVA) and SaskEV — two electric vehicle associations — will look at things like where people charge their cars, at what times, and whether more stations are needed.