December 12, 2005

Ottawa, Saskatchewan to provide up to $40M for feasibility studies on low-emission facilities

The federal and Saskatchewan governments are providing up to $40 million for initial feasibility work on two projects aimed at helping the province reduce greenhouse gas (GHG) emissions. The two potential projects are a near-zero emissions clean coal plant, to be built by SaskPower in southern Saskatchewan, and an industrial gasification and poly-generation facility near Belle Plaine. The projects also involve proposals for carbon dioxide pipelines for enhanced oil recovery and retirement of some existing SaskPower generating units in need of replacement or refurbishment.

Canada and Saskatchewan will provide up to $10 million each toward initial work on the potential clean coal project. It is anticipated that the clean coal project could involve the construction of an advanced 300 megawatt facility capable of near-zero emissions of greenhouse gases and pollutants normally associated with coal fired thermal power plants.

The second project, to be supported by Canada and a Saskatchewan government-industry consortium, provides for up to $10 million each for technical and economic studies to determine the commercial feasibility of a Saskatchewan poly-generation plant. The project would deploy advanced technology to virtually eliminate emissions while producing hydrogen, nitrogen, steam and carbon dioxide to produce fertilizer, electricity and other commodities.

The total cost of the proposed clean coal and poly-generation projects is estimated at $4.5 billion, with both facilities proposed to be operational by 2011.

The $40 million in funding will support front-end engineering, design and feasibility work, and involves a continuing commitment from the federal government should that design work prove positive. The funding also supports design work needed to permit the use of captured carbon dioxide in enhanced oil recovery operations in Saskatchewan oil fields.

The funding is the highlight of a new five-year Memorandum of Understanding (MOU) on climate change between the two governments and will come out of the $250-million Partnership Fund, a component of Canada's Climate Change Plan 2005.

The MOU will also see the two governments collaborate on initiatives around energy conservation, development of alternative and renewable energy sources, maximization of agricultural soil and forest sinks, and development of new energy and carbon management technology, including clean coal and carbon dioxide separation and sequestration.

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