There was once a sick wisecrack that the rest of Canada used to pin on Saskatchewan during the 1970s and 1980s when the farm-based economy was in a tailspin and residents flooded west into boom-time Alberta.
“Would the last person to leave Saskatchewan please turn out the lights,” the line went.
Not anymore.
With a population just a tick over 1 million, Saskatchewan added another 20,100 jobs in August, dropping its unemployment rate to 4.4 percent — tied with Alberta for the lowest in Canada and well below the national average of 7.3 percent.
Energy Minister Tim McMillan — who is reveling in the rapid growth of Saskatchewan’s unconventional light oil plays and its expanding fertilizer industry tied to potash — said the job numbers reinforce his government’s message that Saskatchewan is a “place of opportunity.”
But the steady rise in oil production to 460,000 barrels per day from 432,000 bpd a year ago is also generating its share of strains — notably a shortage of skilled workers to meet the needs of a technology-driven petroleum industry and pipeline bottlenecks out of the province.
Pressures will build
And the pressures will build, McMillan acknowledged, as hydraulic fracturing and horizontal drilling are applied to formations beyond the established Bakken and Shaunavon plays to Viking in the west (an extension of the same formation in central Alberta) and Weyburn in the south.
He said the riches in Saskatchewan are almost limitless, with 45 billion barrels of oil-in-place and recovery rates that have surged to 60 percent from 5 percent only a few years ago.
The province’s greatest hope is that TransCanada will get approval for its Keystone XL pipeline, offering 700,000 bpd of capacity from Alberta, through Saskatchewan to the Texas Gulf Coast — a vital link for Saskatchewan producers.
McMillan is also hopeful there will be enough backing for Enbridge to reverse its existing crude pipeline in Eastern Canada and for TransCanada to convert part of its main natural gas pipeline into a crude carrier.
In the meantime, he said Saskatchewan is counting on solid bidding for exploration rights and a continued increase in drilling on top of last year’s 3,528 wells, up 29 percent from 2010.
McMillan said his province has a “strong resource base and a regulatory structure and are open to investment from international oil companies,” matching the external spending in potash and uranium mining.
He is also hopeful Saskatchewan will see spending on new refineries in addition to expansion of Consumers Cooperative Refineries facility which is due to increase capacity to 130,000 bpd by the end of 2012 from the current 100,000 bpd.
