Saskatchewan’s Energy Minister tours CO2 enhanced oil recovery facility

On September 4, Colleen Young, Saskatchewan’s Minister of Energy and Resources, toured two key facilities in Saskatchewan’s energy landscape: The Whitecap Resources-operated Weyburn Unit and Steel Reef’s Viewfield Plant 4 gas plant. These sites are central to the province’s oil production strategy and represent a convergence of carbon capture, utilization and storage (CCUS), enhanced oil recovery (EOR) and power generation. 

Legal considerations for CCUS and EOR 

The Weyburn Unit is a recipient of carbon dioxide (CO₂) captured at the Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project. This closed-loop system reuses CO₂ to extract additional oil while reducing emissions, a model praised by Minister Young for its environmental and economic efficiency.  

From a legal standpoint, this model raises several considerations: 

• Carbon rights and pore–space leases – Companies must secure legal access to underground formations for CO₂ storage. The Government of Saskatchewan has announced that they would like to clarify and update regulations to encourage investment and ensure certainty regarding pore space ownership, access, unitization of EOR sites and long-term CO₂ storage responsibilities.  

• Environmental approvals and monitoring – Projects involving CO₂ injection must meet stringent environmental standards, including long-term monitoring and risk allocation for leakage. 

• Infrastructure and power grid integration – The most recent advancements in CCUS and EOR have linked oil recovery with electricity generation. This dual-purpose infrastructure may require new agreements and regulatory filings. 

Coal power and CCUS expansion 

Saskatchewan’s decision to rejuvenate a coal-fired power generation fleet has created new opportunities for expanding CCUS initiatives. Had coal-fired generation been phased out, the resulting loss of carbon dioxide supply would have posed a significant threat to EOR operations, particularly those dependent on captured CO₂. By extending the operational life of coal facilities, the province ensures continued access to CO₂ for reuse in industrial applications. 

Economic justification and policy support 

Capturing carbon dioxide solely for underground storage presents economic challenges, particularly due to the significant energy loss associated with the capture process. However, when CO₂ is repurposed for EOR, it becomes more financially viable. The increased oil output generates broader economic benefits, including employment opportunities, tax revenue and royalties, which help justify the investment in carbon capture infrastructure. 

Saskatchewan’s Oil and Gas Processing Investment Incentive (the OGPII) recognizes EOR as an eligible activity, offering tailored tax credits to support innovation and capital recovery in the province’s energy sector. We have explained the OGPII in more detail in the related Insight CCUS enhanced oil recovery: Small legislative change equals big economic and environmental impact. 

Production targets and strategic growth 

At the Williston Basin Petroleum Conference in May, senior research geologist Gavin Jensen projected that full CCUS implementation across Saskatchewan’s coal fleet for use in EOR projects could yield an additional 73,000 barrels of oil per day in Saskatchewan. This would significantly contribute to the province’s goal of reaching 600,000 barrels per day by 2030, a target reiterated by Minister Young.  

Saskatchewan’s evolving energy strategy, anchored in CCUS, EOR and coal rejuvenation, presents both opportunities and legal complexities for corporate stakeholders. As infrastructure expands and policy shifts, the Energy Group at MLT Aikins is pleased to guide your organization through regulatory frameworks, contractual structures and environmental obligations to ensure sustainable and profitable participation in this next phase of energy development.

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