Meili would review resource royalties and, by 2030, phase out coal

First in a series of two stories, interviewing each of the candidates running for NDP leadership

Moose Jaw – Dr. Ryan Meili is taking his third shot at the leadership of the Saskatchewan New Democratic Party (NDP), having run in 2009 and 2013 unsuccessfully. The Saskatoon physician was elected as MLA for Saskatoon Meewasin in early 2017.

As one of two leadership candidates, the winner will challenge whomever wins the Saskatchewan Party leadership race, which is running concurrently, but will conclude at the end of January. The provincial NDP will choose their leader on March 3, 2018. With the next general election expected in 2020, it will feature new leadership from both of the leading parties.

Meili spoke to Pipeline Newson Nov. 30 via cellphone from Moose Jaw, outlining what his energy policy would be, should he be elected premier.

“A lot of our energy policy focuses on the opportunities in renewable energy. We are a place with abundant sun, wind, opportunities for geothermal and other sources of renewable energy. That’s an area we haven’t invested in in a considerable way.

“Oil and gas is a very important industry in the province. Obviously we need to continue it, but at the same time recognize that that’s not the only form of energy and not the only energy industry we should be involved in. We need to be diversifying both our sources for our own use in the province as well as the types of industries built up around energy,” Meili said.

Asked for his thoughts on royalties, Meili responded, “I think that we do need a royalty review. We need to make sure we’ve got the royalty structure that is both competitive enough to allow the oil and gas industry to succeed in the province, but at the same time making sure that we’re have fair return on that product, which is a natural resource that belongs to the people of the province. A lot of the profit from oil and gas is leaving the province. We need to make sure we’re getting our fair share of that in such a way that doesn’t impede the industry.

“One of the things that concerns me is the practice of royalty holidays, multiple-year royalty holidays that encourage fast expansion and resource depletion without getting a fair return. I don’t think that’s the best way to advance the industry.”

“I want to have a good, hard look and make sure we’re not leaving anything on the table, that we can make sure the people of Saskatchewan are able to have all the revenues they need for all the other programs we need, but doing so in a way that doesn’t actually impede those revenues by slowing down the industry,” he said.

It’s important to have consistency, so he wouldn’t be in favour of reviews excessive in frequency. There also needs to be transparency on what they are trying to achieve.

Could royalties go down? “It’s possible, but I don’t think that’s my inclination. I want to make sure we’re getting sufficient amount as we’re needing to pay for other investments, that we are getting a return on our oil and gas investments.”

Asked if he would go on trade missions, like outgoing Premier Brad Wall has, in support of the oil industry, he said he wouldn’t know on what case that would be. “If there’s something in the best interests of the Saskatchewan people, and it makes sense for me to go to Washington or Beijing or whatever, I would do that, but I’m not going to forecast any of those trips at this time.”

Regarding new export pipelines, Meili said, “Pipelines are a way of transporting liquids. That’s a really basic thing to say, but the reason I say that basic thing is because they have become, in many ways, a very polarizing concept. Either their they absolute cure for everything in the economy or they’re the end of days. I think we need to take these pipelines through a very diligent process, that analyzes it through. Is it economically sound? That decision will be made by companies like TransCanada might decide that if an investment isn’t what they want to do. It need to be looked at, from us, from the government, from a regulatory point of view, but also looking if this actually going improve the economy of the province? Is it going to result in new jobs? Will it result in long-term income?”

It’s also important to look at the pipelines route and what it carries.

“You also need to look at the social costs and value of the pipeline,” he said, adding there is now a “quadruple bottom line,” with the impact on First Nations and their land as the additional bottom line item.

Any revival of Energy East is up to TransCanada, and the regulatory bodies. “I’m not trilled by political posturing around these pipelines,” he said.

He suggested that because Keystone XL has been approved, Energy East wasn’t a project TransCanada wanted to continue with.

Regarding the downturn, with pressures to use less fossil fuels because of climate change and no control over international prices Meili spoke of the need for diversification so we’re not entirely dependent on this one resource.

“It’s an area that’s been hit hard, and an industry that’s been hit hard. We’ve seen lots of people unemployed. We need to do what we can to support the ongoing success of that industry, but also recognize they’re not the only types of employment and we need to figure out what are the ways we can assist with transition as people have left that industry. What are the other options for them?” he said.

He would like to see significant investment in renewable energy in southeast Saskatchewan as it will be affected by changes in coal-fired power.

“Carbon capture and storage is a very interesting technology, but it’s been a very expensive investment, a billion-and-a-half dollars. The real return, in terms of reducing carbon emissions, is not significant, in part because the way we’re operating it is using that carbon to extract more oil. You can make the business case for that, but from a pure emissions reduction point of view, it’s not a very great argument.

“My approach, and I see this is what SaskPower is doing, would be no further carbon capture storage units, but keep the current one operating and continue to use it for its lifetime,” Meili said.

“We need to phase out coal by 2030, and I think that’s the right thing to do.

“Are there some of these plants, that, for energy needs, or for the need of transition, there’s an argument to negotiate with the federal government that it could have a 53-year lifespan. That’s something, obviously, would be worth examining and discussing. But I’m actually in favour of the phase out of coal by 2030. In terms of it’s impact from a carbon emissions point of view, it’s very significant, but also in terms of other things produced – heavy metals and other gases that cause health problems for people living around coal plants.

“We’ve got some time. Let’s be working. This is what frustrates me about the Sask. Party. We’ve had a decade of boom times, but everybody knows the boom times don’t last. Was there planning for diversifying the economy, to spread out the risk? In the years until 2030, that’s what we have to be doing as we look at the communities that will be affected by the closure of coal plants as well as we look at the electricity needs that we have.”

He thinks we missed the boat by not having a sovereign wealth fund, and that’s something he would explore in the coming years, after looking at spending priorities and diversifying the economy. Should resource revenues rise sufficiently, that would be a place to invest any surplus, he said.

“Carbon pricing is a means of putting a price on carbon. As such, using a market-based measure to decrease use. Now, that’s been shown to be a pretty effective mechanism in this field and other fields.”

He said tobacco taxation has reduced its consumption, as an example.

“It has to be done right. The very first thing I would use the income coming for carbon pricing for would be in employment that is less carbon intensive – green jobs, renewable energy production, green building, etc., all ways to keep people working while we reduce emissions.”

He spoke of protecting agriculture and trade-exposed industries from carbon tax disadvantages compared to the United States.

“This is a very important industry, but also a volatile one. We need to make sure, in times that are really good, Saskatchewan people are getting their fair share. In times are tougher, that we’re making the changes we need, having the flexibility to encourage the industry to be successful, but also putting it in the context of a larger approach to energy overall, looking at how we deal with the need to decrease our carbon emissions overall by 30 per cent by 2030 and looking at our long term success in terms of employment and investment in the people of the province,” Meili concluded.

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