1. Presented at: Saskatchewan Agriculture and Food Agriculture and Greenhouse Gas/Climate Change Workshop Saskatoon December 11, 2000 Llewellyn Matthews and Cynthia Edwards SaskPower: Climate Change Initiatives

2. Outline Why is it an issue for SaskPower? SaskPower’s options SaskPower’s Climate Change Action Plan Offset projects A role for agriculture

3. Canada’s Emissions Electricity Other Industry Oil & Gas Transportation Agriculture & Forestry

4. Saskatchewan’s Emissions Electricity Industry Transportation Oil & Gas Other Agriculture & Forestry

5. SaskPower’s Emissions

6. SaskPower’s Perspective It is a real issue. We have a responsibility to do our part. Electricity will be a targeted sector. –A strategic business issue. Other sectors must do their part. We will need to show leadership.

7. Long Term Solutions Technology Change –Renewable energy sources –Better carbon based technology –Hydrogen based energy Energy efficiency –Infrastructure changes Adaptation –We are only affecting the rate of change

8. Kyoto Perspective Canada a signatory but not yet ratified. No implementation plan or rules yet. The electricity industry is a likely target. Kyoto is only a first step and not a long term solution.

9. SPC Emissions since 1990 1990 emissions = 10.6 M tonnes Kyoto target = 10 M tonnes Projected 2008 to 2012 emissions = 16 M tonnes per year Kyoto Gap = 6 M tonnes per year

10. SaskPower’s Challenge How to reduce net emissions while keeping the cost of electricity reasonable and competitive? Reducing service is not an option! Demand will continue to increase.

11. Options - Don’t burn coal Retire 65% existing coal- fired plants and replace with combined-cycle gas turbines OR Convert 100% of existing coal-fired generation to burn natural gas Cost is substantial Disrupts economy (Estevan & Coronach)

12. Options - Renewable Energy Hydropower Wind Solar Landfill gas Biomass Other (e.g. fuel cells)

13. Options - Offsets Reduce emissions elsewhere Enhance natural sinks Sequestration Emissions (carbon credit) trading

14. Options - Reduce Demand Demand side management or energy efficiency. Cost to replace existing capital equipment. Can slow down but not reduce demand.

15. SaskPower’s Climate Change Strategy Long Term –Replace coal plants at the end of their life cycle with new clean technology. Near Term –Internal initiatives –Customer initiatives –Offsets

16. Internal Initiatives Increase efficiency of current operations. Co-generation –Meridian (Husky Upgrader) –Cory Potash Research new technology –CO2 capture –Clean coal

17. Customer Initiatives Energy Solutions –Large customers Green Power –9 MW of wind power Public Education –Self-audits –Action By Canadians program

18. Water Heating 6% Home Heating 17% Auto Use 43% Lights & Appliance s 26% Garbage in Landfills 8% Action By Canadians 28% of GHG are attributable to personal actions. Individuals can make a difference! Public understanding & support is critical.

19. SaskPower Offset Strategy Uncertainty of Regulation –Focus on projects that are beneficial in absence of GHG limitations Sink enhancement Use of renewable fuels Importance of Investing in Saskatchewan –For every $1 spent on mitigation: beneficial to spend that $1 mitigating within customer base –Promote sustainability while allowing low-emitting technology to evolve

20. SaskPower’s Existing Projects SERM: forest sinks and carbon reserves GEMCo: –Iowa Farm –Norseman landfill Research: –Prairie Soil Carbon Balance Project –Prairie Farm Rehabilitation Administration –University of Saskatchewan –Ducks Unlimited

21. Existing Projects: SERM Restocking of Not Sufficiently Restocked (NSR) lands in Northern Saskatchewan Protection of existing carbon reserves that otherwise would have been harvested Currently undergoing review by the Greenhouse Emissions Reduction Trading (GERT) Technical Committee

22. Existing Projects: GEMCo Iowa Farm GEMCo contract is with IGF Insurance Creditable Actions: –Shifting from intensive to low/no tillage practices –Extending rotations –Capturing methane from animal waste for energy production –Producing ethanol from agricultural products

23. Existing Projects: Research in Agriculture Prairie Soil Carbon Balance Project PFRA University of Saskatchewan Ducks Unlimited

24. Sinks in the Marketplace Sink Potential –Maximum potential = 8 to 12% of Canada’s Kyoto gap The creation of a market that includes the trading of GHG emission reductions in no way obligates landowners to participate in such a market

25. GHG in Agriculture Agriculture is a significant emissions generating sector –10% of Canada’s total emissions –20% of Saskatchewan’s total emissions Expansion of livestock industry in jeopardy Adaptation to changing climate Opportunities in Canadian Agriculture Sector

26. Opportunities to Mitigate GHG in Agriculture Enhancement of soil sinks Improved manure management Ethanol production Agroforestry Shelterbelts and wetland restoration

27. GHG in Agriculture: Risks Biological system: inherently risky Agriculture is an energy-price taker Agriculture not as mobile as other industries Baseline Protection is important for agriculture Agriculture must make use of available market instruments in order to avoid an energy TAX

28. Conclusions Climate change is a serious issue in Saskatchewan for both the agriculture and electricity sectors: – Electricity: SaskPower has been actively involved in the issue through involvement in GEMCo and submissions to the Voluntary Challenge and Registry – Agriculture: Actively researching ways to monitor and verify changes in soil carbon, and improved manure management techniques

29. This evening’s session sponsored by SaskPower www.saskpower.com the power of the environment