Big progress in the ‘Energy City’

13-1Over the past five years, Estevan has been in the midst of significant economic growth as its diverse resource-based economy continues to fire on all cylinders.  Recent advances in agriculture, clean coal, carbon gasification, hydraulic fracturing and horizontal drilling have helped secure the community’s long-term economic success, transforming the city and surrounding rural municipality (RM) in to one of the country’s greatest investment opportunities.

The two municipal governments (city and RM) welcome business investment and have taken significant consideration in to ensuring the community’s long-term economic success through continued investment.  Both desirous of seeing continued private-sector development, the city and RM have developed a positive working relationship which includes a working agreement to allow for a quick and seamless annexation process, provision of water to the RM’s industrial parks, and a clear distinction of the type of investment each municipality desires.  Due to the relationship that has been established, and both municipalities’ wish for continued growth and investment, the last few years have been witness to record land development and building-permit values while a number of significant capital projects have taken place.

13-2Recent concerns regarding emissions from coal-fired power generation plants encouraged the municipalities, along with the local business community, to work together in order to ensure the long-term viability of Estevan’s coal mining and power-generating sectors. The result is the world’s first and largest commercial-scale, coal-fired integrated carbon capture, sequestration and enhanced oil recovery project at then 880-megawatt Boundary Dam Power Station.  Once complete, the $1.2-billion project will capture one million tonnes of CO2 per year from the 110-megawatt Unit 3.

SaskPower has signed a 10-year deal with Cenovus that will see the energy company purchasing the liquefied CO2 for enhanced oil recovery (EOR) purposes.  Cenovus has been using CO2 for EOR for the past ten years; in 2011, they injected 4.2 million tonnes (purchased from a North Dakota company) with quite impressive results.  Of their 27,000 barrels per day extracted from the EOR project, 19,000 of it is incremental as a result of CO2 injection.  This agreement provides Cenovus with greater security in their CO2 supply, while providing SaskPower with the financial security to make the project successful; in fact, with the sale of CO2 for EOR, the economics of clean coal become comparable to combined-cycle natural gas plants.  After the project’s construction, which is due for completion in the spring of 2014, SaskPower will monitor the facility for two to three years prior to making their decision (likely in 2016 or 2017) whether to convert units 4 and 5.

13-3While not as significant of a financial investment, the Shand Power Plant (also located in the RM of Estevan) is undergoing its own major renovation—a $60-million carbon capture test facility.  This test facility will provide national and international companies the opportunity to experiment with their own carbon capture technologies using Shand’s infrastructure and up to six megawatts of power.  Hitachi is on board with the project as a 50/50 partner, providing half the capital funds and the opportunity to be the first to test their technology once the facility is complete, also in the spring of 2014.

With the combination of local clean coal/enhanced oil recovery, expectations of another 3,200 oil wells being drilled in Saskatchewan in 2013, and the continued growth of the region’s agriculture sector, Ceres Global Agriculture Corporation, in partnership with The Scoular Company, has bought land 60 kilometres southeast of Estevan in order to construct a $90-million logistics terminal for shipping oil and agricultural commodities.  The facility will include two high-efficiency rail loops, each capable of handling unit trains of up to 120 rail cars.  One loop will be used for grain handling and shipping, while the other is to be used for transloading and shipping oil.  The facility is expected to handle upward of 40 million bushels of grain annually and 70,000 barrels of oil per day.  The three-year construction period is expected to begin in the fall of 2013 and provide full-time employment to 30 people once complete.

With the increasing economic activity has come significant demand for housing and accommodation. Estevan has seen rental vacancy rates well under one per cent for the last few years.  In order to try to remediate the issue, the city instituted a tax abatement policy geared toward encouraging rental development and has started to work with private land developers to add two new residential subdivisions to the city’s northeast section.  The RM has also worked to increase residential services primarily through country residential development and the opening of two work camps.  Within city limits, 585 new homes have been added over the past five years; however, in a community with well over 1,100 jobs being advertised on any given day, it has simply not been enough.

13-5The city is currently working with two private development firms to help meet the growing community’s increasing housing demands.  One firm is Trimount Developments; after having completed a number of condominium projects, they are now well on their way to developing an 86-acre property titled Dominion Heights which, when complete, will service up to 470 sites and upwards of 700 new homes.  Demand for housing in this new area has been high; after having broken ground in the fall of 2012, half of the lots in the first phase were sold by the end of January 2013.  The Dominion Heights subdivision is expected to include a commercial centre, an 8.6-acre central park and space for the city’s new fire hall.

All in all, things continue to progress in the Energy City.  With continued focus on economic development and community improvement, Estevan will continue to maintain its position as Saskatchewan’s energy capital while attracting a whole new generation of investors and residents set to take part in this growing community’s exciting future.

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