A deal between SaskPower and the First Nations Power Authority (FNPA) was signed on Friday to use flare gas from oil and gas operations to produce electricity.
The deal is worth about $300 million in potential revenue over 20 years and gives Aboriginal communities and businesses the chance to lead power projects in the province.
Flare gas power generation takes oil and gas waste to produce electricity, which helps reduce emissions into the atmosphere.
“We are proud to celebrate this pioneering agreement between our government and the First Nations Power Authority, which will contribute to Saskatchewan’s climate change strategy in a very meaningful way,” said Minister Responsible for SaskPower Dustin Duncan in a release.
“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. 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.”
Under the First Nations Opportunity Agreement, FNPA will be responsible for securing Aboriginal-led flare gas power production projects.
Over the next 20 years, power purchase agreements will be signed and negotiated with the electricity to be sold to SaskPower and distributed over the provincial power grid.
In a release, FNPA CEO Guy Lonechild called it an important milestone.
“This agreement and long-term commitment between SaskPower and Saskatchewan First Nations is exactly what FNPA was created to develop. Together, we are saying that our First Nations will be essential in the power future of this province, from an economic and environmental perspective,” he said.
Flare gas will help SaskPower stick to its target of reducing greenhouse gas emissions from the oil and gas industry and help the company reduce its own emissions by 40 per cent, by 2030.
“SaskPower is committed to progressive Aboriginal relations and procurement,” said SaskPower President and CEO Mike Marsh in a media statement.
“Through this agreement and the hard work of the First Nations Power Authority, we are delivering on this commitment today and for the foreseeable future. It’s also an example of how we can keep growing the provincial power grid to meet the rising demand for power, in a way that also meets our collective vision for environmental sustainability.”