Natural Resources Committee on Dec. 11th, 2012

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thanks for that good news story.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Calkins.

Ms. Liu, go ahead for up to five minutes.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chair.

Mr. Letellier, thank you for joining us. I have had the opportunity to visit Longueuil on a number of occasions and I know that you have a very fine community.

In your text, you write: “We advocate a level playing field for all energy development in Canada.” What would make a level playing field, in your view?

[Michel Letellier]

As I was trying to explain, our product generates no greenhouse gases. We are committed to having no environmental footprint, and we stick to that commitment. Our projects result in no net loss of habitat. If we use a portion of a river, we create habitat to make up for the impact. Usually, we create more habitat of better quality. For us…

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

I am sorry to interrupt you, but you made three recommendations in your presentation and I would like you to talk about them.

[Michel Letellier]

If there are no longer any long-term incentives for renewable energy, we find it hard to accept that they exist for fossil fuels. We would like to go back to the federal ecoENERGY program. That provided 1¢ per kWh for 10 years. The sum of $1.5 billion was set aside for the program and now it has expired. We benefited from the program, as did a number of Canadian producers. It was a very noble way to support companies starting up in renewable energy. We would certainly like to see a similar program again.

We have seen the government support Newfoundland and Labrador by providing loan guarantees for a major hydroelectric project. That could be very useful for small, independent producers who are forced to borrow on the financial markets at a risk premium difference of 300 to 400 basis points compared with normal Government of Canada rates. Actually, a loan guarantee could be a very innovative solution that would help independent producers.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

What is your recommendation about government subsidies for fossil fuel energy?

[Michel Letellier]

I am sorry, I did not understand.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

What is your recommendation about government subsidies for fossil fuel energy?

[Michel Letellier]

I find them hard to accept, even if the energy is very profitable in the short term. Canadian experience at least shows that there is a pile of money to make with fossil fuel energy. As I have explained, renewable energy is very capital-intensive to start with. We find it hard to see why some energy is subsidized but that renewable energy do not get many subsidies at all.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you.

We have heard a lot about the changes to the SR&ED program.

Is that a subsidy that your industry takes advantage of? If so, what are the consequences of the change on research and development in your field?

[Michel Letellier]

When research projects are being developed, it is important for us, because ultimately we buy the technologies in order to get them working. If a program helps to develop a technology and make it competitive, it helps us to be competitive in turn when we are looking for long-term energy contracts. We do not just want subsidies on the production side. If subsidies and a research program allow technologies to become more competitive, producers benefit. They become better at competing with natural gas, coal or other forms of energy from fossil fuels.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

One company, Écotech Québec, appeared before this committee and suggested a tax credit to help bring things to market.

Do you think that could help the renewable energy sector?

[Michel Letellier]

Certainly. If Quebec or Canada were able to export technology, it could be available here at a lower price. The challenge for those companies is to get to a point, in terms of economies of scale, where they can be more competitive. Any program that would include the possibility of commercialization and international trade would increase sales volume and would reduce production costs. That would be good news for us too.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Liu.

We'll go finally to Mr. Anderson and Monsieur Galipeau.

Go ahead, Monsieur Galipeau.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you, Mr. Chair.

I would like to thank the witnesses. Their testimony was very enlightening.

I know that I learned from them.

I would especially like to thank Mr. Letellier for being with us, albeit virtually.

The questions I have today are for Mr. Woods. They're questions of semantics, so instead of taking the time of the committee, I will meet with you after the meeting is over.

Thank you, sir.

I am done, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

Okay.

Mr. Anderson, did you have some questions?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Yes, absolutely. Thank you, Mr. Chair.

I want to express my appreciation to the witnesses for being here today. I think we've had a very interesting session. I do have some questions.

Mr. Letellier, I appreciated your balance today in your presentation on renewables. You mentioned energy storage innovation at one point, but I'm wondering if you can tell us a little bit about where you see the innovation there. You mentioned electrical, compressed air, and hydrogen. Where are those technologies at in terms of storing energy? How do you see the innovation taking place there in the next few years?

[Michel Letellier]

I'm quite pleased to see that the automobile industry is meeting the challenge of making better batteries. This is, in my view, the future of advanced energy storage. Given the big market for the car, these batteries have been pushed past the limit we have known in the past.

As an example, there's a B.C. company that develops new technology for batteries. By putting them into a big container you can have as much as a five-megawatt capacity in two containers, and that's very interesting. This is big, and it's just the beginning. This sector has great potential, because it can be imported or exported to the car industries and bring value to Canadian companies.

On hydrogen, we've looked at mixing wind and hydrogen, and this is also a very interesting aspect. Right now the process is not super efficient. It uses the old electrical components to create hydrogen, but there is promising technology that seems to improve the global efficiency of the life cycle. Especially for remote communities, this can be a very good solution for displacing diesel-producing energy.

Compressed air is a technology that is fairly simple and it works. This also has good potential for smaller capacities. I even saw some cars running on compressed air, and it works.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

Mr. Scott, you talked about sharing technology. How far is COSIA going on that? Is it the environmental protection technology? Are you actually sharing production technology? Will it have any impact on competitiveness? What are the limits of that agreement?

[Glenn Scott]

When we formed COSIA, we thought very carefully, and we consulted with competition, regulators, and the Government of Canada. The collective view was that we'd be on safe ground if we stuck to environmental technologies, greenhouse gas emissions, water, tailings, and land, without turning to extraction-based technologies. So that's where we've concentrated our efforts. But there is a load of opportunity in those areas to improve our footprint.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Can you tell us about the partnership? Do you have a partnership with academics, or is it strictly among the companies?

[Glenn Scott]

The actual members of COSIA are the producers, the oil and gas companies, but the aim is to involve academia and government and share all of our information with both so that their knowledge and insights can help us.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Is the time cycle of innovation accelerating, or is it staying the same as it's been in the past?

[Glenn Scott]

I believe it's accelerating. The cooperation is groundbreaking.