Trudeau confirms coal equivalency agreement

Prime Minister Justin Trudeau confirmed on Friday that the federal government and the Government of Saskatchewan have reached an equivalency agreement for carbon dioxide (CO2) emissions from its coal-fired power fleet.

Trudeau was in Regina on Jan. 10 for a town hall session and an announcement the following day of $25.6 million in funding for the Deep Earth Energy Production Corp. (DEEP) geothermal project south of Torquay. In a media availability after the DEEP announcement, Trudeau spoke about the equivalency agreement in response to a question from Pipeline News.

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Trudeau said, “We were very pleased to announce, this morning, that Saskatchewan and the federal government have come to an agreement on coal equivalency.

“It’s important. I think we all understand the need to phase out coal as an energy source, and we will be doing that by 2030. But it’s also extremely important that we’re supporting the workers and their families who are in that industry now. That agreement we’ve come to with Saskatchewan will allow for exactly that.”

Dustin Duncan, Saskatchewan’s minister of Environment and minister responsible for SaskPower, confirmed that an equivalency agreement had been gazetted on Dec. 29.

“At the end of December, the federal government gazetted the agreement. And so that kicks off a 60-day consultation period. So basically, we’re in a 60-day period where the government can provide feedback. Provided that the federal government receives no feedback that will make them want to make amendments to it, the equivalency agreement should be ready to signed, sometime in March,” Duncan said.

The Agreement on the Equivalency of Federal and Saskatchewan Regulations for the Control of Greenhouse Gas Emissions from Electricity Producers in Saskatchewan was published in the Dec. 29 Canada Gazette, the official newspaper of the Government of Canada. Publication in the Gazette formalizes federal statutes, new and proposed legislation, administrative board decisions and public notices.

So the agreement is now public, but has not been signed yet, Duncan explained.

The agreement puts mandatory greenhouse gas emissions limits for the electricity sector in Saskatchewan for the years 2018 to 2029. For 2018 and 2019, the limit is not greater than 33.5 metatonnes (Mt) of carbon dioxide equivalent. For 2020-2024, the output can’t be greater than 77 Mt of carbon dioxide equivalent. For 2025-2029, emissions cannot be not greater than 64.5 Mt of carbon dioxide equivalent.

Saskatchewan agrees to meet a commitment to have at least 40 per cent of the province’s electricity generation capacity be from non-emitting energy sources by 2030, by achieving a escalating, specified targets.

The federal government didn’t expressly contact the provincial government that they would be going ahead with the agreement. Duncan said the province found out about the long-awaited agreement via the Gazette.

Saskatchewan has been waiting for this agreement for a long time. Duncan recalled speaking about an equivalency agreement to then-federal Minister of Environment Peter Kent, under the Stephen Harper Conservative government, when Duncan was in his first round as environment minister from 2010 to 2012.

In more recent months, Saskatchewan had essentially laid out all the information it felt it possibly could for the federal government and awaited a reply.

Duncan said it was “great to hear” the prime minister make the announcement, so long as nothing comes up during the consultation period.

“It provides for the ability of SaskPower to manage the coal-fired fleet, as a fleet, not as individual facilities. So under federal regulations, all facilities cannot exceed 420 tonnes of carbon dioxide per gigawatt hour (GHw) of production. So basically, rather than looking at each individual unit facility by facility, SaskPower is able to manage it on a fleetwide basis,” he said.

That will allow SaskPower, rather than having to shut down Boundary Dam 4 and 5 by the end of this year to continue to operate them until 2021 and 2024, respectively.

“That’s really the only effect that it has. Anything that doesn’t have carbon capture and storage attached to it is mandated to close, by the federal government by the end of 2029,” Duncan said.

The key element in this agreement is the reduction of emissions of carbon dioxide by the Boundary Dam Unit 3 Integrated Carbon Capture and Storage project. Since it captures nearly all the carbon dioxide that would otherwise be emitted through the burning of coal, SaskPower can take those reductions and average it across its other units to hit federal targets.

Asked what changed to finally bring this about, Duncan said there had been several minor agreements to get to this point.

“This was a long time in the making. There were serious discussions back and forth going back to the summer, early fall, that were making me feel not really confident that we were going to get an equivalency agreement,” he said.

He didn’t know about the agreement until it was seen in the Gazette.

“Why it took this long, people can have all sorts of opinions,” Duncan said.

Regarding Boundary Dam Unit 6, their deadline is Dec. 31, 2027, according to Duncan. The shutdown deadline for Shand, Polar River Unit 1 and Unit 2 is Dec. 31, 2029, without CCS.

A decision has not been made regarding those units.

Size matters, according to Duncan. Units the size of BD4 and BD5, their generation are being retired in the United States despite President Donald Trump’s support of coal. They are 150 megawatts each, whereas the remaining SaskPower units, except BD3, are all 300 megawatts apiece.

Mayor Roy Ludwig was pleased with the equivalency agreement announcement, but he wants to see what happens during the 60-day comment period. He hopes there won’t be any opposition.

“We’re optimistic, now that it’s been gazetted, that the equivalency agreement will go through,” said Ludwig.

The mayor said the city is looking at other opportunities to diversify the local economy once Unit 4 shuts down. He cited the DEEP geothermal project as one that will make a positive impact. Other possible opportunities include working with cannabis producers to try to get a greenhouse in place, and attracting manufacturing plants back to the community.

The city would still like to meet with Environment Minister Catherine McKenna in Ottawa.

“We’re still trying to get a meeting with her, and convince her, that … if we don’t get this equivalency agreement, about the potential negative impacts for our community,” said Ludwig.

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