Saskatchewan to compete with Alberta in Canadian crude production

Alberta’s oil sands have grabbed the attention of the world’s energy industry in recent years, but a different Canadian region is challenging that privileged position.

Saskatchewan, one of the Prairie Provinces, is experiencing its own oil boom and, to boost it even more, the local government announced Thursday that it intends to sell oil sands rights on Crown land.

This is the first time in more than five years the provincial government has opened Crown land for oil sands exploration. The first and only time rights were sold in Saskatchewan, reports Global News Saskatoon, was in August 2007 – to date nothing has been produced from the sale.

Ed Dancsok, assistant deputy Minister of Energy, says the two parcels of land are in the northwest, north of the Primrose Lake Air Weapons Range, which straddles the Saskatchewan/Alberta border.

Although it is more difficult to extract out of the oil sands in Saskatchewan than those in Alberta, explorers in the prairie province are hoping to develop their own successful formula, just as the US has combined hydraulic fracturing and horizontal drilling to unlock previously inaccessible shale oil and gas.

"Alberta has been pioneers (in this) and I think it's been 50 or 60 years of development for them in their oil sands area," Energy and Resources minister Tim McMillan told NewsTalk 980. "We're very confident that technology can carry across into Saskatchewan."

He added the province is aware of the political and environmental criticism Alberta has been subject to because of its oil sands, but said the government “has and will continue to ensure all developments are done in a responsible and environmentally appropriate manner.”

Current oil activity in Saskatchewan is centered in its shale oil pockets, on the Bakken shale formation,  which straddles Alberta and the US states of Montana and North Dakota.

In its most recent forecast in June, the Canadian Association of Petroleum Producers (CAPP) predicted the country’s overall crude oil production would increase from just over 3m barrels per day in 2011 to 4.7m b/day by 2020. Although oil sands areas will continue to comprise the bulk of the anticipated future increases there has been a resurgence of conventional production.

CAPP said fracking and horizontal drilling techniques applied to tight oil plays and liquid rich shales were one of the drivers behind the increase.

Saskatchewan’s economy is one of most stable ones in Canada with plenty of jobs of in oil, potash and uranium projects. The province population grew by 80,000 in 2011, in contrast to many years of declines as its best and brightest moved to Alberta.