Natural Resources Committee on March 1st, 2011

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Anderson.

We'll go to Mr. Tonks and Mr. Hoback.

So go ahead, Mr. Tonks.

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

Mr. Lehrmann, in the drilling of the Lona O-55 exploration well, and under the stop-work authorities, were those simulations that you referred to, or were they actual incidents of the stop-work provision?

[Jeff Lehrmann]

No, in doing the work, work was stopped, reassessed, and then restarted.

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

What was the degree of severity? For example, you talked about the secondary well control systems. Were they testing the secondary response capability of that technology?

[Jeff Lehrmann]

The degree of all the stop-work authorities varied. They involved everything from an individual who was unclear about the operation to an unseen hazard. One example of stop-work authority that we instituted was with our secondary well containment system, our blow-out preventer.

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

Are those required under the C-NLOPB legislative regime, or are they technology applications that you have and Chevron has implemented?

[Jeff Lehrmann]

Following requirements from the regulator as well as our standards, we ensure that all our systems have the highest integrity and can function at any time.

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

Mr. Skinner, you've heard the concerns raised in Mr. Cullen's line of questioning. You've heard Mr. Lehrmann's response about the technology. We don't have time to pursue the in-season capability in the same-season response.

Under the C-NLOPB regime, are you and your ministry looking at expanding the provisions of the legislative regime under environmental assessment to address potential problems that might come up in an oil spill similar to what happened in the gulf?

[The Chair, Conservative, Leon Benoit]

Minister Skinner, could you give a short answer, please?

[Shawn Skinner]

I'll do my best.

The short answer is that we have concerns based upon the experience in the gulf. We believe we have adequate safety regulations and legislation now, but this is something that is fluid and we are currently reviewing it. I would expect we will continue to review to try to make sure we have the best possible legislative and regulatory environment.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Tonks.

Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you.

I must say, when I look at Newfoundland and I look at Saskatchewan, where I come from, I see two provinces that have done very well the last few years.

Mr. Skinner, you've done very well in the oil sector. In fact you have the same issues we have in finding labour and employment and skills training and everything else. It sounds like a parallel universe in some ways.

I want to talk to you about the hydro project that you're proposing and the benefits it would bring to all of Canada, not just Newfoundland. I wonder if you could highlight that for me.

[Shawn Skinner]

The project you're referring to is Muskrat Falls, or the Lower Churchill. The Lower Churchill is really two projects, Muskrat Falls and Gull Island.

We are currently proposing to do the Muskrat Falls portion. It's a $6.2 billion project. It will for the first time ever allow Newfoundland and Labrador to be connected to the North American energy grid. It will allow us to have security of supply. It will allow us to get rid of diesel generation, to help Canada, and to help the region reach its greenhouse gas emission targets. It will be a major construction project. Quebec will benefit, being right next door to Labrador. This project is occurring in the Labrador portion of our province. So Quebec workers and companies will benefit. We also believe that Ontario, because of its manufacturing base, will benefit. We know that the Atlantic region is going to benefit. There is surplus electricity that will be generated. Some 824 megawatts are being generated. Forty percent of that we need for our own purposes. Twenty percent is going to Emera down to the maritime link, and forty percent of it is available as surplus for development in Labrador, for development in the province, or to sell into the northeastern market.

Basically, we're going to create a construction project, we're going to make sure we have green energy, and we're going to get rid of what we call dirty Holyrood. Holyrood uses diesel fossil fuels and is sending thousands of tons of pollutants into the air every year, and we can get rid of that with this project. It's a great project all around—Atlantic, Quebec, Ontario—and will bring us markets in the northeastern U.S.

[Randy Hoback, Conservative, Prince Albert, SK]

I hear all those benefits. I just wonder why anybody would be opposed to it. It's kind of beyond me, I guess.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Hoback.

Thank you very much to all members for their great questions.

And for the information the witnesses have provided today, it is very much appreciated, Mr. Lehrmann from Chevron and Minister Skinner from Newfoundland and Labrador.

We will suspend the meeting just for a couple of minutes as we change to the next panel.

[The Chair, Conservative, Leon Benoit]

We will resume the meeting with our second panel.

In our second panel we have Elmer Derrick, hereditary chief, from the Gitxsan Nation. Welcome, sir. And we have John Carruthers, president of Enbridge Northern Gateway Pipelines. Welcome to you.

As I indicated before, we are continuing our study on energy security. We're looking at the west coast this time.

We will go to presentations in the order they are on the agenda.

Mr. Derrick, go ahead, please, for a presentation of up to seven minutes. We will have your presentation translated and distributed later.

Go ahead, please.

[Elmer Derrick, Hereditary Chief, Gitxsan Nation]

Thank you, Mr. Chairman.

I want to say a few words in my own official language before I speak to the presentation.

(Witness speaks in Gitxsan language)

First of all, I want to thank the committee for inviting me. It's an honour to be here to make a presentation on behalf of the chiefs, the simgigat, of the Gitxsan Nation.

I would like also to thank Nathan Cullen for taking time in our community a couple of days ago. He took the opportunity to have some dialogue on economic opportunities with a number of people in our community.

I don't want to be disrespectful of the meeting here because I was taught as a young fellow to respect those who invite you to meet on their turf, but it's important for me to be straightforward. I'll try to do that without any disrespect to the committee, and to your House, to Parliament.

What I want to do is to offer some challenges. The challenge we offer from our nation is fairly straightforward; it has to do with the honour of the crown. I know that the crown does its best, and I know the committee or Parliament holds up its role to make sure the crown lives up to expectations.

Part of what I'm going to ask all of us around this table to do is reflect a bit on what this committee is dealing with. I know the topic of energy security is important, and I know that the topic of energy security has to have a long-term focus.

I'm going to ask all of us to step back a bit and think about 50 years or 100 years down the road—the short term. I reflect back on the way this country was formed, the way this country was developed a bit more than 100 years ago. The perspective that we bring to the development of this country goes back several thousand years. It's important for us to sit back a bit and try to focus on what can be done to build a better country for all of us.

From the perspective of our people, from the perspective of the leadership at home, the country has not been kind. A lot of our people live in an impoverished state. We have a lot of suicides because a lot of young people don't see any future for them. Our member of Parliament, Mr. Cullen, knows how suicides affect most of the villages in our area. We look forward to better days, and better days can be planned for all of us if we focus on the long term.

Part of what we're looking at is to have a set of legislative objectives that firmly direct what may happen to this country over the next 50 to 100 years. If you think back to what the Supreme Court of Canada spoke about on the Delgamuukw decision, it said that the crown has to pay some attention to certain things.

The document I'll be circulating deals with title and rights. When you fall back into a position of how the crown can deal with title and rights, it has to be done through the establishment of legislative objectives. Legislative objectives set goals, such as what happened when the national policy was able to create Confederation. When you go back to that process, it's quite easy to see the process that the Fathers of Confederation looked at to create this country we live in today.

So it's important for all of us to think long-term. I know it's mighty difficult at times when you run for political office to think beyond the terms of four years, but I think it's important for us to consider setting up legislative objectives that focus on energy security. And part of that process will enable aboriginal communities to become engaged in the consultation process, which we now can't seem to get engaged in too well.

Part of the weak side of that engagement process has to do with attitudes of people within government, where a defensive approach is taken to having dialogue or the necessary consultation with the aboriginal title holders at the community level.

So it's important, first of all, for the crown to set up legislative objectives. It's also important for the crown to accept its responsibilities in recognizing the title that we have. It's also important for the crown to be ready to have meaningful dialogue with the people at the community level, which it does not do now.

Without that dialogue leading to consultation, projects like the Enbridge Northern Gateway Pipelines project cannot proceed, because no dialogue can seem to take place. There is nothing to focus on. All I'm saying is that the crown has to step up to the plate and look at legislative objectives and really come onside with what the Supreme Court of Canada and the other courts have ruled upon in terms of the title that we do have.

That is the message I wanted to give.

At the outset, the hereditary chiefs of the Gitxsan Nation do fully support any development activity that happens. We've been familiar with this particular project for quite a while, and we'll die on the hill to protect our food supply. We rely primarily on salmon that returns into our river systems. We rely on keeping the water clean to protect our food supply, and we will die on the hill to protect that food supply.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Derrick, hereditary chief from the Gitxsan Nation.

Now we go to Mr. John Carruthers, president of Enbridge Northern Gateway Pipelines.

Go ahead, please, with your presentation for up to seven minutes.

[John Carruthers, President, Enbridge Northern Gateway Pipelines]

Thank you, Mr. Chairman.

Thank you for the opportunity to appear before your committee and to contribute to the study regarding energy security in Canada.

I am pleased to be able to provide you with an update on the Northern Gateway Pipelines. It's a project that has the potential to provide a fundamental and long-lasting boost to the economies of not only B.C., Alberta, and Saskatchewan, but all across Canada. It is a project of national strategic importance and significance.

Our country enjoys both a Pacific advantage and a world-class energy resource advantage. It is time for us to translate that competitive edge into increased market diversification and security, and stronger economic growth and opportunities.

Canada has an undeniably strong history of delivering on visionary projects that improve our security and position us for growth. From canals that connected industries to key markets, to the railway that linked the east to the west, or the Trans-Canada Highway that brought communities together across the nation, we have built infrastructure that has strategically positioned our country for long-term prosperity. Now the Northern Gateway Project is set to diversify energy markets and boost Canada's economic and global stature.

As you may be aware, the National Energy Board data from 2009 shows that less than 1% of Canada's petroleum exports went to any country other than the United States. Sole reliance on one market does not, cannot, and will not effectively position our country to capitalize on our world-class energy resources. Northern Gateway provides much-needed large-volume capacity to deliver Canadian energy to our Pacific trading partners.

In terms of some background on Northern Gateway, the proposal comprises two parallel pipelines extending nearly 1,800 kilometres from Edmonton to a marine terminal at the port of Kitimat in British Columbia. The projected cost for the project is $5.5 billion.

The port of Kitimat itself offers a safe and protected harbour to grow trade with Asia. I would like to share some key facts with the committee regarding the port and traffic off the north coast.

The project would add about one tanker movement a day to the existing shipping on the north coast. Northern Gateway will install what is among the most modern and sophisticated marine safety infrastructure in the world for this project. As a result, the status of our project will be similar to that adopted by Norway, which has had an excellent safety record for more than 30 years. The stringent technical infrastructure we will install will raise the safety bar for traffic on the north coast.

Our project will increase the potential volume of trade with our Pacific partners and generate an additional $2 to $3 of benefit for Canada for every barrel produced. In other words, the port of Kitimat is a key strategic component of Canada's Pacific advantage.

Last May we filed the regulatory application for the project with the National Energy Board. The application will be reviewed by the NEB as well as the Canadian Environmental Assessment Agency. Our filing began the formal public discussion and consultation regarding the project through what is known as the joint review panel. The JRP will consult with stakeholders and study the application to address key issues, including those related to aboriginal, marine, and environmental consideration.

I want to report to you that since 2002 we have been in dialogue with every first nation community along the right-of-way of our project. I am confident that when we have had a chance to present the marine and environmental safety records of our project and the benefits to their communities and to Canada, we will gain the support of most of the first nations communities involved.

I recognize that there have been debates and discussions in the House of Commons around introducing tanker bans off the north coast of British Columbia. It is important to remember that tankers currently safely call on Canada's ports from east to west, including Kitimat, and have done so for decades.

I would also like to take the opportunity to respectfully request that the work being conducted by the NEB and CEAA, two institutions created by Parliament, not be ignored in the rush to come to judgment without the benefit of reviewing or testing the evidence on the matter.

In conclusion, I would like to thank you for the opportunity to share a brief update with you today highlighting the importance of the Northern Gateway Pipelines, a project that will build on Canada's Pacific advantage to help ensure our nation's long-term prosperity and strong global standing as a responsible, sustainable, and ethical energy superpower.

The benefits for Canada are substantial, including a $270 billion increase in gross domestic product over 30 years. And the legacy of local investment, tax revenue, and jobs for the north further supports the significant opportunities from our project.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Carruthers, president of Enbridge Northern Gateway Pipelines.

We'll now go directly to the questions and comments. We're starting with the official opposition, Monsieur Coderre, for up to seven minutes.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you, Mr. Chair. I will be splitting my time with my colleague Alan Tonks.

Mr. Derrick, do I understand that, as Mr. Carruthers just mentioned, you're not against this project, you just want to be included to discuss the future, to have your share?

[Elmer Derrick]

Our nation has been involved in trying to find a way out of our poverty for a number of decades, and that's how we got engaged in the court case known as Delgamuukw. So we have taken every opportunity to look for investment capital or investors to come into our area and help deal with economic opportunities. We track a lot of development. Fortunately, I was on the B.C. Hydro board for about six years, and with the access that I had to information at the B.C. Hydro board level I was able to look forward to different stuff, and that's how I was able to get some knowledge about this particular project.

[Denis Coderre, Liberal, Bourassa, QC]

You said rightly that we had to look ahead to the future. It's important that it's not just a punctual approach, but what will happen in the future, 20, 50 years.

You still believe in the tanker exclusion zone?

[Elmer Derrick]

There are a couple of answers to that. The Gitxsan Watershed Authorities have a working relationship with the Department of Fisheries and Oceans and with the Pacific Salmon Commission. We've developed a lot of scientific studies under contract for those two organizations. As I said earlier, we die on the hill to protect our food supply, our salmon. So we monitor what happens up and down the coast these days anyway. We monitor what happens on the Alaska coast as well as the British Columbia coast and the coast down to California. So we see a lot of tanker traffic there. We've watched a lot of tanker traffic coming in and out of Douglas Channel, and we believe that with the studies that have been done, there are ways to mitigate the traffic.

[Denis Coderre, Liberal, Bourassa, QC]

Our party believes the tanker exclusion zone should remain.

Mr. Carruthers, before I pass the mike to my friend Alan, explain something to me. If we want to expand the market, mainly Asia, how can you say we won't have more vessels? If we want to expand the market and if you want to send more oil to China, for example, you'll need more boats, no?