Natural Resources Committee on Dec. 7th, 2006

[Dr. David Keith]

Yes.

I'm a liberal university professor. I've talked to a bunch of CEOs of the biggest companies in Calgary, and it is clear that a bunch of Calgary companies are moving pieces around the table that are already making in some cases major investments today to prepare to operate under a carbon-constrained world. Some of them are now publically calling for regulatory clarity, so I don't think this is a radical view at this point.

[Dr. Angus Bruneau]

Put the plan on the table and engage in discussion the way they did for the sulphur and gasoline, and sulphur and diesel. It's a good model. It works, and you get the intellectual capital of industry working for you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. St. Amand.

Welcome, Mr. Lussier, who is going to I think speak now for the Bloc.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Chairman, before I give Mr. Lussier the floor, I would like a small clarification.

I have 30 years experience as a solar energy expert, and I can say that we are quite familiar with passive solar energy. We don't need to do additional research.

We need to use this form of energy, and it will not be more costly, it will not cost 10 times more than any other type of energy. In fact, this type of energy costs the same as energy we don't use. When you talk about solar energy, you need to specify whether it is active or passive solar energy. We all know how passive solar energy works. In my opinion, you don't really know what is happening, when you say that.

[Dr. David Keith]

For the record, I'm actually retrofitting my house in Calgary with one of the more serious passive solar systems of any house in Calgary, and in every case I've got a cost plus contractor for my personal house. I'm doing the exact numbers, comparing the real cost in dollars per tonne carbon, and I care enough about it to put my own money on the line to do it. But the claim that it is cost-effective today, in my view, is not a real claim.

[The Chair, Conservative, Lee Richardson]

What about solar thermal energy?

[Dr. David Keith]

Solar thermal is much less expensive than PV, but it's not there yet.

[Dr. Angus Bruneau]

The real issue, and we speak to it surprisingly in this report on technology.... The final recommendation is that we get serious about social science, because in things like this, passive solar and so many other consumer-related choices, we don't come close to what we could achieve with the technology available today. Passive solar is a perfect example. What we're saying is get some smart sociologists and others looking at the decision-making processes that leave us so far back from what we could achieve with what's available out there today. Let's find out why.

[The Chair, Conservative, Lee Richardson]

Monsieur Lussier is next. You have three minutes.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

Thank you.

Mr. Keith, I was very surprised to hear you criticize the European Union's efforts to reduce greenhouse gases. If I understand correctly, you are saying that Europe has not succeeded in reducing its greenhouse gases. Did I understand correctly?

[Dr. David Keith]

There have been reductions, but most of the reductions have happened for reasons other than policy, so whether there have big reductions below business as usual is at issue. For example, Britain has made substantial strides in reducing emissions, and those had very little to do with policy and were not plentiful. They had to do with Mrs. Thatcher's desire to confront the coal unions, the collapse of coal mining and coal-fired electricity, and the replacement of coal by cheap gas from the North Sea. That had a big impact.

Similarly, the collapse in the former East Germany has had a very big effect, but in terms of actual reduction of emissions below baseline from climate policy, results have been...not zero, but not very much yet.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

My reference point was England, which has had good results in the past. I am referring to the British delegation that appeared before the Standing Committee on the Environment and Sustainable Development. It shared very concrete results with us.

I come back to the issue of investment in intellectual capital, which Mr. Bruneau referred to. What is your reaction when you hear that some types of technology could cut gas consumption by cars by 60%? Such technology has disappeared, been hidden or withheld by scientists or by the oil and gas industry.

Are we talking about real solutions? Few people talk about energy efficiency. Should smart investments also be made in the area of energy efficiency?

[Dr. Angus Bruneau]

Let the economics engender the savings. Efficiency is a two-edged sword. If somebody invented a light-emitting diode, you'd get this bright light and almost no energy. What are we using here? It didn't displace very many lights, but every billboard in the airport is a sheet of these things, which uses a lot of energy because there are a lot of LEDs. Why are there a lot of them? They are so cheap, and each one uses so little.

The way you make automobile engines more efficient is you make them bigger and run them faster. That's how you can make them more efficient. That's what you do. Look at the size of engines in vehicles today. You look at the efficiency of just the vehicle system and you're maybe around 20%, but now you want to move a single body that weighs 150 pounds, and that's only one-thirtieth of the mass of the total vehicle, so now you're down to an overall efficiency of three-quarters of a percent. The efficiency is how much energy it takes to move me from where I am to where I want to go. If the vehicle weighs one-half, you've doubled the efficiency of the actual system.

Anyway, those are just two examples. Efficiency is a two-edged sword.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Bruneau.

I'm sorry, Mr. Lussier. We'll give you a chance to start next time. We're going to have to move on to Monsieur Paradis.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you, Mr. Chairman.

Mr. Keith, let's clarify something. In your presentation, you said that the Kyoto protocol had serious flaws and that its implementation could put us in an impasse. You made a connection to concrete actions that need to be taken. Did I properly understand the connection? Are the flaws you mentioned related to the fact that we need to go beyond incentives and truly implement energy sources such as wind energy or coil coupled with sequestration devices? You also talked about carbon.

I would like you to expand on this in order to ensure that I have understood you correctly.

[Dr. David Keith]

I may not fully understand you. I think those are pretty separate questions.

The Kyoto Protocol leaves lots of room for countries to figure out inside their borders how they want to regulate emissions. In fact, sometimes people's claims about how you need it made in Canada as opposed to Kyoto aren't really fair, because you can make your own rules under Kyoto quite substantially. There's no big collision with intensity-based targets that I'm aware of.

I think there are many weaknesses of Kyoto, but one of them is the inclusion of the clean development mechanism credits, which are facility-based credits where you get a credit for the difference between what your emissions were at some facility, say, in China and what you say they would have been had you not got some lump of money in a certificate 10 or 15 years down the road. The fact is that is fundamentally private information, and I don't believe we can build an accounting system that is able to manage that. I think letting that into the protocol represents letting in a kind of fuzzy math accounting that will not serve us well in the long run.

The framework convention, the overarching convention on which Kyoto was negotiated, is more likely to stand the long-run test of time. But currently—maybe it's because I don't focus myself on the international negotiations that much—I don't think it matters that much. I think what matters is what we actually do, and what we do for ourselves in North America, because of the importance of the U.S.

I think the U.S. is quite likely to act very seriously in regulating carbon dioxide, probably more seriously than Canada or Europe. The U.S. has been the leader in most environmental regulations since the Second World War, and if you go to Washington today—I was there yesterday—you can smell that it is close to a deal on this topic, a deal that will probably make what we're doing look not so serious. And the U.S. will not rejoin Kyoto. If I'm right and the U.S. ends up regulating carbon dioxide emissions and doing it outside Kyoto, then Kyoto will have simply become not very relevant to the problem.

The problem will go on, international negotiations will go on, but whether the Kyoto Protocol ends up being an important tool for harmonizing international action on this is, I think, an open question. There are other tools out there, such as the WTO.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Thank you.

Mr. Bruneau, this morning I had the opportunity to visit the Canada Centre for Mineral and Energy Technology here in Ottawa. Your presentation was very real to me because I saw what you were talking about, such as energy loss and some other matters. We talked about analyzing district energy systems. In short, I saw a whole series of examples, and I found your reference to them extremely interesting.

For the committee's purposes, I want to ask the following question; perhaps you have an opinion on this matter. With regard to science and technology, what should be our government's priority in relation to supporting tar sands extractions? How do you see this situation?

[Dr. Angus Bruneau]

That was one of the questions we were asked to address when we did the panel activity that resulted in this report. We make many suggestions in many areas, but there are four areas we identified that we think should be priorities for the government, where the government has an important role to play—different in each of the four.

The first of them was gasification technologies, and we talked about that. This has to do with creating those intermediate materials that we can reassemble to more efficiently use all the energy in the tar sands. But we can use the same kind of technology on wood wastes—three million tonnes a year created around the fringes in rural Canada. It can be applied there. We need to have technologies that we can package in the appropriate sizes to function commercially.

That's one, gasification technologies. There are many different applications, and if we really invest in that area, there will be ideas come out of it that we can't imagine today.

The second thing is sequestration. Government has to take that on as a priority, because there is no economic framework to handle CO2 today. We have to create one, and it's going to have to be done with government participation in one way or another—encouragement, participation in the research. CANMET, the lab out in Alberta, will in particular be involved in that.

That is another priority, because we are moving towards more large, central sources of CO2 emissions, and it's the central sources that we can capture. Use the natural gas out there in the diffuse ones.

The third is that we have to find a way to break through the provincial walls in our electricity system. It is utter madness. This is a system that at best is suboptimized within provinces. We have incredible resources which, if you sat down today and said what an optimal electrical power system would look like in this country, if we could design it today with the resources we have....

I'll give you one example, close to home. I was a director of Churchill Falls. Churchill Falls is the best peaking plant on this continent. It can store in its reservoir three and a half months of full plant capacity of 5,500 megawatts—a single plant—and it is run as a baseload plant at an 80% load factor. As we start talking about a system with a lot more wind or even solar—intermittent supplies, not centrally controlled—the value of having stored electrical power sitting there is greatly increased.

There is not a country endowed with the same set of resources as we have in this country, when we add in our nuclear, and we could build the most elegant system. But the system today has been under-invested in, almost everywhere across the country. We didn't design the systems to accommodate intermittent, dispersed, diffuse generation. There is a lot of control technology, optimization technology, redesign of this system needed, and if we really decided we were going to get at this, everybody could be a winner.

All of these new constraints are being imposed on that system at the very time that everybody wants a better electricity product: better voltage control, better wave form. Why? Well, I got a number from somebody. He told me the largest single load on the electric power system in Calgary, by end use, is the microprocessor. By the time the electricity is actually used in the central storage unit in that computer, it is a highly refined product, and we've discarded a whole lot of energy along the way to get it to that refined form.

When you have somebody looking at your eyes and the person does laser eye surgery, the energy coming out there represents about a 1% efficiency from what started inside a steam plant with the boiler. To get to the control and the fine feature of what we have--and we want more and more of what we do to be finely controlled--we're loading up the system, and have to find a way to rationally rebuild our electric power system in looking to the future.

Finally, address the social sciences. Why do we as a country fall so far short, based on the decisions of consumers, in making wise energy choices--be it in our houses, our vehicles, or anywhere? Why do we fall as far short as technology would allow us to go today?

Those are the four subjects--the four major ones. David talked about the basic science to do with.... I'm not going to go into the list, but there are many others. It's a long story.

[The Chair, Conservative, Lee Richardson]

If we didn't think you two had to get back and find solutions for us, we could stay all night.

We're going to wrap up with Mr. Tonks today.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you very much for being here.

Dr. Bruneau, I'm sure the committee enjoyed your metaphor with respect to this extraordinary layer cake that our geological character is made up of in this country, consisting of coal, bitumen, oil, and gas, and your clarion call of whether we can have our cake and eat it too. I think that is really the mission statement with respect to sustainable development, and the lens through which this committee is attempting to make decisions with respect to the sustainability of our energy vis-à-vis the various available technologies that would be part of an overall strategic plan. All of you have helped us here.

My question is very specific, and it's to you, Dr. Bruneau. You had said--and I wrote this down--that there's a tremendous opportunity to store carbon in the basin--I assume you're talking about the Athabasca Basin--that it's a Canadian opportunity, and that we are to stand back and determine how we can optimize use of products while using technologies that would focus on the byproducts that are created.

I wonder if you could give us some examples of those byproducts and the technologies. You talked about the interface. It appears to me to be a huge challenge that this committee is attempting to deal with.

[Dr. Angus Bruneau]

There's been a lot of talk about what energy sources are used in the tar sands. We've talked about the fact that there is coke, which comes out as a byproduct of the system. That byproduct is relatively stable and can be stored. It doesn't go off into the atmosphere very quickly. I'm sure some does diffuse, but very little. It's relatively stable, but it's also an important energy source.

What we're saying is that there are gasification technologies that would allow you to start with that coke and water and produce hydrogen, carbon monoxide, and some carbon dioxide. The hydrogen and carbon monoxide you can use again as fuels. The hydrogen is particularly useful. You get some heat out of that process, but what you need is the ability to filter the carbon dioxide out of this hot gas stream coming out of the gasification process, and then collect it, transmit it, compress it, and put it underground in a safe, well-regulated, monitored way.

To be able to do that sort of thing, we need regulatory frameworks. We need to set up experimental programs in which we test diffusion of the underground reservoirs in the western Canadian basin. We have hardly started that. As David said, at one point we had a lead because we were actually starting to do some of it, but others have taken over, and we've sat passively.

I don't know whether that answers your question.

[Alan Tonks, Liberal, York South—Weston, ON]

It does, and it's a very good illustration.

My simple response is, would part of your dissertation or does the advisory report deal with the interface between technology and the commercialization that uses those byproducts?

For example, when we were in Fort McMurray, we saw the sulphur that was being stacked in pyramid fashion. What is going to be the use with respect to the sulphur? It's very market-related, and so on. I think the committee would be interested in illustrations where technology is being commercialized that focuses on those byproducts that are, in fact, problematic for the future development of the sands.

[Dr. Angus Bruneau]

Let me say that we did not do that in a detailed way. We had six months, literally, from the time we were first convened until we last met. So we had to get very focused, early on, on the main themes that we felt we had to address. But what we did address, because we were asked as well to talk about the processes to assure, or to encourage if not assure, was commercialization.

One of the things that have marked the federal support system is that it tends to be organized in vertical silos. You start with NSERC—basic research, universities. Then you move to NRC, the PILP and IRAP programs, and you start to attempt some demonstrations. Then you start looking for a little private money and fall into a ditch usually. Then if you've been able to demonstrate something in the laboratory, you might get as far as to put together a proposal that SDTC, Sustainable Development Technology Canada, will help fund to do a demonstration. But you have to have brought together a group of people, including those who have the ability and are interested in commercializing it, taking it right into the market.

So you have to sing one song to NSERC, and then you have to develop new music for NRC, and on it goes. What we're saying is, if a technology is a priority, ensure that the support is available in that priority area, from beginning to end, from a single source. We're not saying to do everything that way. We need to cast the net broadly. But if you have a priority, restructure this so that in fact the control of the people making the decisions follows right along with the natural processes that go from the science to commercial application.

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you.

[Wayne Henuset]

Can I talk a little bit here?