Regina– Dustin Duncan, MLA for Weyburn-Big Muddy, is Saskatchewan’s new minister for Energy and Resources, having been appointed on Aug. 22. Previously, he had been minister of Health, the largest expenditure portfolio in government.
Pipeline News spoke to Duncan on Aug. 26 about the challenges in the new posting during down times.
Pipeline News: This is a reactivation of the role of an Energy and Resources minister inside the Ministry of the Economy. Can you explain how that works? Will it be any different than when Tim McMillan held a similar role?
Dustin Duncan: We are going to share a ministry. There will be just one deputy minister that will report to both (Minister of Economy) Jeremy Harrison and myself. We will have very distinct roles. Minister Harrison will be responsible for the traditional role as economic development, trade, immigration – those types of files. Energy and Resources will be my responsibility. But we will be distinct ministers. So if I have something going to cabinet, for example, that is Energy and Resources related, I don’t need Jeremy Harrison’s sign off, just the same as if he’s bringing something forward on the economic development file, he doesn’t need my sign off for it to move forward.
So we are distinct ministers. We have distinct lines of authority. What we’ll have to work out is where there’s crossover of that. If there’s an energy company that’s looking at, say, building a refinery, that would be seen more as an economic opportunity for the province. Jeremy would have a role in that, and I would have a role in that.
In the terms of the actual functions, of the old ministries, aside from being within the same ministries and sharing a deputy minister, we are distinct ministers. We have distinct lines of authority, and that’s how we’ll be going forward.
P.N.: What are the top three things on your agenda as Minister of Energy and Resources?
Duncan: I think immediately of the response to the Husky spill. We’re taking part in a thorough examination to not only examine what happened, but also look at the measures what we might have to take in the future to reduce the risk of this happening again. That’s really top of mind in terms of work the ministry is doing. That’s going to be my priority.
I think longer term, though, as the new minister, I think first and foremost is market access. On the oil and gas side, obviously pipelines is front and centre on market access. That’s the message Premier Wall has been pushing provincially, nationally and internationally, and it’s something I will continue with.
On the forestry side, it’s softwood lumber. We’re coming to the end of the softwood lumber agreement. It’s an election year in the United States, and that tends to have things not move quickly. That could have implications for the forestry industry in Saskatchewan. That’s something we’re turning attention to.
I think of the competitiveness for capital. Obviously, right now, we’re in a soft market for a number of different resources prices, which has affected the amount of investment. There is still a significant amount of investment being made in Saskatchewan. We need to ensure we are still competitive and that we remain competitive so that when prices do return, and capital moves from the sidelines to the field, that capital is finding its way here in Saskatchewan.
I think, third, that we have a modern regulatory environment – that companies know we’re predictable, that it’s workable for companies. It’s not only workable for the major exploration and production companies, but the junior companies that are very important to Saskatchewan’s oil and gas industry.
Saskatchewan’s industry is unique. We have the Huskys and Crescent Points of the world. But even if you look at the history of Crescent Point, it started by building its production through the acquisition of a number of small junior companies.
That’s traditionally how the industry in Saskatchewan has functioned for many years. We have to ensure we have a climate in Sask-
atchewan that’s not only going to be conducive to major companies investing in Saskatchewan, but also to ensure that we still do have a strong junior industry.
P.N.: Are you going to consult with SHOP (Saskatchewan Headquartered Oil Producers) on a regular basis?
Duncan:One of my main priorities is I get the opportunity to consult widely across the industry. That’s going to be SHOP, it’s going to be CAPP, it’s going to be a number of different individuals and companies.
While not being directly involved with it, coming from southeast Saskatchewan and from a community where the oil industry plays a large role, those are some relationships I already do have. But there’s big parts of this file that I’m not as familiar with – potash and uranium and forestry, that I’m going to have to do a lot of consulting with.
P.N.: The Husky oil spill into the North Saskatchewan River was the most significant event of its type in Saskatchewan in, at least, a decade. How is this going to impact what you do as the new minister?
Duncan:Obviously we’re investigating the cause. I’m not going to speculate on how it happened. Even though we don’t have the results of all of that yet, I don’t think that stops us from being proactive as the regulator and being responsive to the concerns of the public.
We will undergo a process of not only looking at the regulatory function of the ministry, looking at the role the industry plays in this, but also looking at risks that are still out there. We have to get a handle on what those risks are.
I think this is a big part of the job: that the public can have confidence that government has been responsive to this, that, in this case, Husky has been responsive, and we’re going to do anything we can to mitigate the risks of this type of event happening again.
P.N.: The oil downturn is now over two years old. Thousands of jobs have disappeared, oilfield communities are hurting, and many people have been out of work for a very long time. As a new minister, where do you go with this? What, if anything, can you do?
Duncan:We just need to be at the top of our game when it comes to investment attraction. There is still money out there being invested into the oil and gas sector. Certainly, we’re seeing Crescent Point making significant investments into this province. Raging River just made a pretty significant investment. Their longer term plans are for western Saskatchewan investment.
So we just need to ensure we’re still raising the profile of Saskatchewan. Long term, this is a great place to do business. We have a good resource base. We have good infrastructure in place, and we have people who know what
they’re doing in the sector. That’s going to be a big part of it.
I would say, even though the prices are relatively low, and we haven’t seen the investment we have had in previous years, even with the most recent oil and gas right sale - $10 million – that was the highest per-hectare price in Western Canada this year. We are still attracting our share, and more than our share, of investment and we’re going to have to continue to do that.
I’ll be out in Calgary in the next two weeks, speaking at a conference in Calgary. That’s going to be part of the message – Saskatchewan’s a great place to invest.
Part of this, is we need to be ready for when prices do recover. This is about creating a favourable environment, and waiting for the market to catch up to us, not necessarily the other way around. We don’t want to be in a positon where we’re trying to play catch-up once prices do return and then try to chase those dollars.
P.N.: Saskatchewan politicians have often pointed out that when one resource sector is down, others are up. But that’s not the case now. Gas has been down for nearly a decade. Now oil is down, potash mines are laying off staff, the Jansen mine might get mothballed and a uranium mine is shuttered. How are you going to deal with these tough times in the resource sector?
Duncan:Again, I think it’s playing up the advantages we do have in Saskatchewan. We’ve been fairly fortunate, despite the downturn in our resource sectors, we’re still seeing fairly strong job growth in 2016. We’re expecting a pretty good crop this year. We’re seeing promising growth in other parts of the economy. Our building permits, our retail sales, our manufacturing sales, numbers are all really helping to keep Saskatchewan in a better position relative to other provinces. Look at Alberta next door, and the problems they’re having. Not saying we don’t have our own challenges. I think we’re in a better spot than most.
On Energy and Resources, it's again reminding the markets, reminding the companies, that we are a preferred place for investment because of the resource base, because of the infrastructure, because of the people that know what they’re doing in this industry. We have to continue to be an attractive investment climate.
Capital can go wherever it wants to in the world. We want to ensure that we’re getting those capital dollars coming here in Saskatchewan.
We still have Mosaic K3 expansion underway. Our oil and gas sales are strong compared to everywhere else in Western Canada. The long-range prospects remain strong in the potash sector, and they do for the oil sector as well.
We’ve been through these. In the resource sector we’ve seen high prices, we’ve seen low prices. We’ve been through this before. Again, being positioned for when prices pick up, so we’re not playing catch-up. We’ll be ready for when that happens.
P.N.: Have you personally worked in the oilpatch when you were younger? If so, what did you do? How might that experience impact your job now?
Duncan:I grew up in Halbrite. My parents worked for a trucking company, Dempsey Laird. So we were an oil family. I have lots of family members that work in the oil sector. The year I turned 16, I worked at Newalta. That was my summer job. So I think that, growing up in the oilpatch, I was an oilpatch kid. That gives me a lot of perspective about how important the industry is to the province and to the people that aren’t just directly employed, but indirectly, because of oil.
Growing up, both of my parents’ paycheques came from the oil sector. I understand, from that perspective, how important the oil industry is to a lot of families in this province. I also understand, from other roles in government, most recently being the health minister, we spend $600,000 an hour in the health care system, 24 hours a day. A lot of the revenue for the government is generated by the energy sector. Now, I’ll get a better look at how those dollars come in.
P.N.: Premier Wall has been, arguably, the most ardent supporter of the oil industry and pipelines the Canadian political system for several years now. Has he given you any marching orders with regards to what message you should convey?
Duncan: The message I’m going to convey is the exact same message he’s been delivering all across this country. We need to get access to tidewater for our Canadian oil. It’s not just a matter of getting oil down east. If we can’t get it to the ports and out of Canada, that doesn’t help getting a better price for Saskatchewan oil.
Access to tidewater is going to be really important for Saskatchewan. We need to get the infrastructure in place now. Why wait for business to return? We know what the scramble is like when oil hits a certain price, and infrastructure gets really tight. Prices start going up when trying to get that infrastructure in the ground.
Let’s get the infrastructure in place now. For some of these project, some of the infrastructure is already there.
We know shipping oil by rail is expensive. There’s risks that come with it. Frankly, it takes away from our ability to ship other products, our ag products. We expect a pretty good crop this year. We don’t want to lose the ability to move other products that can be moved by rail.
I’ll be saying the same message Premier Wall has been delivering – the importance of delivering western oil across the country.
P.N.: Is there anything you’d like to add?
Duncan:I’m really looking forward to this. I’m an oilpatch kid. I grew up in Halbrite, in a trucking family. This was a big part of my life, growing up. Now, to be Minister of Energy and Resources, I’m really grateful for the opportunity. The oil industry is one I’ve grown up around. I’ve followed it. I respect the people that work in it. The innovation and the technology has allowed the industry not just to survive, but thrive. Those are things I really respect about the industry. To be the minister, it’s really a thrill for me.
Photo: On Aug. 22 Weyburn MLA Dustin Duncan was sworn in as the new Energy and Resources minister. From left, Paul Crozier, clerk of the Executive Council; Premier Brad Wall; Environment Minister Scott Moe and Energy and Resources Minister Duncan. Photo courtesy Government of Saskatchewan
