Ministry of Energy and Resources

Plan for 2020-21

Table of Contents

Statement from the Minister .................................................................................................................................... 1

Response to Government Direction .......................................................................................................................... 2

Operational Plan .................................................................................................................................................3

Highlights ............................................................................................................................................................7

Financial Summary ..............................................................................................................................................8

Ministry of Energy and Resources 1 Plan for 2020-21

Statement from the Minister

I am pleased to present the Ministry of Energy and Resources Plan for 2020-21.

Government Direction and Budget 2020-21 is focused on growth for a better quality of life – fostering a strong economy, creating strong communities and strong families – and Building a Strong Saskatchewan.

The Ministry’s role is to oversee and enable the responsible development of Saskatchewan's natural resource industries – primarily mining, forestry, and oil and gas. Given the broad economic impact and value of these sectors in Saskatchewan, this is a mandate with a high degree of significance for the people and businesses of the province. Saskatchewan’s Growth Plan: The Next Decade of Growth 2020-2030 is integral to our strategic direction, which includes programs such as the Oil and Gas Processing Investment Incentive and the Saskatchewan Petroleum Innovation Incentive. It also defines objectives for establishing new and expanded pipelines, as well as other strategic natural resource development and infrastructure projects in Saskatchewan. Our Growth Plan sets long-term goals of increasing oil production to 600,000 barrels per day, increasing the annual value of uranium sales to $2 billion, increasing forest product sales to $2.2 billion, and increasing the annual value of potash sales to $9 billion by 2030.

The regulatory oversight of our province’s natural resource sectors is of major importance, not only in terms of economic stewardship, but in terms of public and environmental safety. Our Ministry administers a comprehensive and competitive royalty framework related to these sectors and develops policies on which the framework is based. The plan also provides insight into our work to continue to identify, target and successfully attract strategic investments to Saskatchewan by promoting opportunities for resource development to specific global audiences.

The goals, strategies and actions outlined in this plan are designed to enable our resource sectors to continue to meaningfully support Saskatchewan’s economic growth in the coming fiscal year, together with our government’s overall strategy to grow a strong economy and support strong communities.

The Honourable Bronwyn Eyre Minister of Energy and Resources

Ministry of Energy and Resources 2 Plan for 2020-21

Response to Government Direction

The Government of Saskatchewan is committed to Building a Strong Saskatchewan. Investing in strong communities and strong families creates opportunities for a better quality of life for the people of our province. Maintaining a strong economy will enable us to build upon the past decade of growth and continue to provide the services, jobs and infrastructure that meets Saskatchewan’s needs.

Saskatchewan’s Vision “… to be the best place in Canada – to live, to work, to start a business, to get an education, to raise a family and to build a life.”

A Strong Economy Strong Communities Strong Families

Saskatchewan’s vision and three goals provide the strategic direction for organizations to align their programs and services to build a strong Saskatchewan.

All organizations will report on progress in their 2020-21 annual reports.

Ministry of Energy and Resources 3 Plan for 2020-21

Operational Plan

Mandate Statement The Ministry of Energy and Resources develops, coordinates, and implements policies and programs to promote the growth and responsible development of the province’s natural resource industries. The Ministry operates as the primary regulatory authority for the oil and gas industry and ensures competitive royalty systems, regulations and policies for all natural resource sectors. The Ministry also plays an important role in promoting Saskatchewan’s diverse resource potential to investors around the world.

Mission Statement To advance responsible resource development.

Government Goals

A Strong Economy Strong Communities Strong Families

Ministry GoalGrow natural resource exploration and development.

Strategy Protect and enhance competitiveness.

Key Actions • Encourage exploration and development and ensure a competitive royalty and taxation environment for natural

resources, including strategic minerals and metals.• Support the Targeted Mineral Exploration Incentive to increase exploration for emerging minerals in underexplored

regions.• Support the development of the helium industry in the province.• Work collaboratively with industry stakeholders through the Forestry Sector Competitiveness Committee to address

barriers to the growth of forestry in Saskatchewan.• Ensure public offerings for oil and gas and subsurface mineral rights facilitate the exploration and development of our

natural resources.• Developing the Oil Infrastructure Investment Program (OIIP), which will support new and expanded pipelines, as well as

new pipeline terminals, that help get Saskatchewan oil to market.

Strategy Develop policies and programs that support innovation, development and conservation of natural resources.

Key Actions • Position Saskatchewan as the best place in North America to test, commercialize and scale new oil and gas technologies

through the Oil and Gas Processing Investment Incentive (OGPII), Saskatchewan Petroleum Innovation Incentive (SPII) andother programs and policies.

• Optimize Saskatchewan’s regulatory and policy environment to increase exploration, increase primary production andencourage the application of enhanced recovery methods in the oil and gas sector.

• Introduce new strategies and policies to promote secondary and tertiary recovery methods, including steam-assistedgravity drainage and water and CO2 flood projects.

Ministry of Energy and Resources 4 Plan for 2020-21

• Continue the implementation of the Methane Action Plan to support increased capture and commercialization of methaneand other emissions management projects, and those that help sustain the long-term economic viability of the energysector.

• Ensure the associated gas royalty regime aligns with the province’s goal of capturing and commercializing greater volumesof methane.

• Ensure forestry legislation, regulations, timber harvesting licences and other policies promote and facilitate optimal use ofthe provincial timber supply.

• Perform new strategically targeted airborne geophysical surveys and ensure geoscience projects are completed andcontinue to administer the Targeted Mineral Exploration Incentive to encourage exploration for gold, base metals anddiamonds.

Strategy Attract investment through rigorous stakeholder engagement.

Key Actions • Promote Saskatchewan at industry events such as Saskatchewan Geological Open House, Global Petroleum Show, NAPE

Upstream Oil and Gas Expo, Mineral Exploration Roundup, Prospectors & Developers Association of Canada (PDAC) andthe Williston Basin Petroleum Conference.

• Work with Saskatchewan’s natural resource sectors to remove red tape and barriers to economic growth and investment.

Performance Measures Fraser Institute Global Petroleum Survey Policy Perception Index Number one Canadian ranking in the Fraser Institute Global Petroleum Survey policy perception index in 2020-21.

Fraser Institute Survey of Mining Companies Investment Attraction Index Top three world ranking in the Fraser Institute Survey of Mining Companies investment attractiveness index in 2020-21.

Ministry of Energy and Resources 5 Plan for 2020-21

Government Goals

A Strong Economy Strong Communities Strong Families

Ministry GoalAchieve regulatory excellence in support of resource development.

Strategy Apply a risk-based results-oriented approach to the development and delivery of regulatory programs.

Key Actions • Continue the implementation of The Oil and Gas Emissions Management Regulations (OGEMR) to reduce greenhouse gas

(GHG) emissions from the upstream oil and gas industry.• Continue the on-going examination of programs related to end-of-life asset management programs.• Work with other oil and gas regulators and industry partners to identify opportunities for collaboration and information

sharing and develop strategies and tools to address identified risks.

Strategy Deliver efficient regulatory programs with a focus on client service.

Key Actions • Continue to update and modernize regulations and directives to address regulatory risks.

Strategy Build public confidence in industry regulation through transparency, accountability and engagement.

Key Actions • Expand public access to regulatory information.

o Improve public access to regulatory information on Saskatchewan.ca.• Effectively manage the abandonment, decommissioning and remediation of oil and gas wells and mines.

o Continue to accept new sites into the Institutional Control Program (ICP).o Provide oversight of the remediation of the abandoned Gunnar and satellite mine sites.

• Ensure regulatory and permitting decisions are clear, consistent, predictable and timely to support industry investmentdecisions and community engagement.

• Continue to review and update regulatory rules and processes to support industry oversight and resource development.

Performance Measures Reduction of GHG Emissions Reduce methane-based GHG emissions by 4.5 million tonnes of carbon dioxide equivalent annually by 2025.

Measure Clean-up of Abandoned Northern Sites (CLEANS) Clean-up of Abandoned Northern Sites (CLEANS) project annual budget variance, with a target of +/-5 per cent and total costs are managed within the established liability.

Ministry of Energy and Resources 6 Plan for 2020-21

Government Goals

A Strong Economy Strong Communities Strong Families

Ministry GoalAchieve organizational excellence.

Strategy Support world-class information systems.

Key Actions • Initiate a comprehensive Geoscience Data Management System, allowing companies to use modern information

management technologies to increase exploration efficiency, improve drilling and development outcomes, and make newdiscoveries.

• Integrate the facility, well and pipeline transfer process into the Integrated Resource Information System (IRIS),streamlining the process and reducing manual effort.

• Automate processes associated with industry requirements at oil and gas facilities to improve data consistency andprocess efficiency.

• Reduce backlogs of the mineral ownership review process to improve service to industry.• Develop the GeoPlanner system to support a clear and transparent application process.

Strategy Exercise operational leadership.

Key Actions • Emphasis on measuring and responding to industry feedback via client surveys.

Performance Measures Client Satisfaction Establish a baseline measure for client satisfaction.

Ministry of Energy and Resources 7 Plan for 2020-21

Highlights

2020-21 Budget Highlights:

The Ministry of Energy and Resources budget for 2020-21 is focused on driving a strong economy by investing in needed services, programs and infrastructure for the responsible development of Saskatchewan’s natural resource industries.

Highlights of the Ministry budget include: • Funding towards the implementation of several enhancements to the Integrated Resource Information System (IRIS) to

ensure it provides efficient services to the oil and gas industry;• Continuation of the clean-up under the Abandoned Northern Sites (CLEANS) project;• Introducing the Oil Infrastructure Incentive Program (OIIP), a transferrable freehold royalty credit program aimed at

getting Saskatchewan’s natural resources to market; and,• Introducing Provincial Sales Tax exemptions for exploratory and downhole activity for helium, minerals and oil and gas

drilling.

Ministry of Energy and Resources 8 Plan for 2020-21

Financial Summary

Ministry of Energy and Resources 2020-21 Estimates (in thousands of dollars) Central Management and Services $ 20,162 Energy Regulation $ 13,406 Resource Development $ 41,351

Total Appropriation $ 74,919 Remediation of Contaminated Sites ($ 28,750) Capital Asset Acquisitions ($ 3,310) Non-Appropriated Expense Adjustment $ 3,568

Total Expense $ 46,427

For more information, see the Budget Estimates at: http://www.saskatchewan.ca/budget

For More InformationPlease visit the Ministry’s website at http://www.saskatchewan.ca/government/government-structure/ministries/energy-and-resources

Resource Development 55%Central Management and

Services 27%

Energy Regulation 18%

Ministry of Energy and Resources Budget