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SaskPower, First Nations ink waste-gas generation pact

SaskPower agreed to buy power produced by waste natural gas from projects developed by First Nations groups.

The province-owned utility will source as much as 20 MW generated from gas that would normally be burned off, or flared, as a byproduct of oil and gas production. The deal has the potential to raise as much as C$300 million in revenue over 20 years for the First Nations Power Authority, SaskPower said in a May 11 statement. The authority, an agency of First Nations groups in the province, will seek out potential projects, which will then receive power purchase agreements from the utility.

Saskatchewan is home to most of the Canadian portion of the Bakken Shale, among other oil deposits. Piping and processing associated gas from those operations is often not economically feasible, so it is often burned in flares. The First Nations plan to instead use that gas as fuel for small generators that would be connected to the provincial power grid.

While no projects have yet been proposed, the power authority is working with the Flying Dust First Nation, which is located near heavy oil fields in northwestern Saskatchewan, on a potential development. SaskPower, which gets most of its electricity from giant coal-fired facilities, anticipates the program will help it to lower overall emissions.

"By supporting the adoption of innovative emission-reduction technologies such as this, we are supporting all sectors of Saskatchewan's economy in an effort to reduce their carbon footprint," Dustin Duncan, the provincial minister responsible for SaskPower, said in the statement. "We are committed to a cleaner electricity sector, and a cleaner oil and gas sector, but in a manner that is financially sustainable and responsible."

Saskatchewan has been at odds with Canada's federal government over its plans to lower emissions. The province has said it is implementing pollution-reduction schemes and refuses to impose a so-called carbon tax on emissions. The federal government has threatened to impose its own levy in provinces that refuse to implement a provincial tax.