Thank you, Mr. Chair.
Members of the standing committee, ladies and gentlemen, thank you for the opportunity to address you here today.
I'm here on behalf of the Canadian Chamber of Commerce, Canada's largest industry association. We speak for 450 local chambers and boards of trade and represent 200,000 Canadian businesses on matters of federal and, in this case, national importance. My testimony will be more of a qualitative nature than a quantitative nature.
On the topic of market diversification in the energy sector, we believe that there are three primary issues at play that are helpful to understanding the situation in which we find ourselves.
The first is that we as a country don't know what it means to be an energy nation in the 21st century. There's a need to foster a real dialogue that can better inform our project and policy choices both at the federal and the provincial level.
The second is that we find ourselves too reliant on a single consumer for virtually all of our oil and gas exports. This impacts government revenues and consequently each and every Canadian citizen.
The third is that we have an opportunity as a western energy exporter to demonstrate leadership on the global stage when it comes to the way we extract, process, and export energy products and to balance that responsibility with appropriate regulation.
The Canadian Chamber of Commerce is of the view that the absence of reliable tidewater access for Canadian energy is among the primary competitiveness barriers facing our economy. Raising awareness of this issue among Canadians is at the forefront of our priorities for 2013.
Most Canadians would be surprised to learn about the 110,000 kilometres of transmission pipeline currently operating in this country and doubly so about their safety record of delivering in excess of 99.999% of their product to its intended destination. Most probably don't realize that the Line 9 originally ran from west to east or that we move hundreds of thousands of barrels of oil every day by train.
The energy renaissance currently under way in the United States has profound implications for North American dynamics because, while we as a nation are refocusing west towards Asia, we find ourselves constrained by infrastructure that points south. This disconnect between opportunity and ability has significant implications for our economy.
Our inability to service overseas markets is slowing investment and development in our resource sectors. Global energy demand is set to rise by one-third by 2035 with as much as 90% of this new demand being driven by non-OECD nations, particularly in Asia. Even Asian countries such as Japan have made policy choices that place our natural resources squarely in their sights.
This is not an argument against increasing our energy exports to the United States, but simply provides an indication of why being a supplier to Asia is a top strategic priority for the Canadian energy sector. That is why a fact-based national conversation about energy is vital at this point in time.
Oil and gas represent over half of the global energy supply and power virtually 100% of transportation. This sector is responsible for nearly a fifth of world GDP and is prominently involved in every other type of economic activity.
This consideration takes on heightened importance if we examine the world's proven reserves of oil and how they are controlled. Roughly four of every five barrels of oil is under the management of a state-owned enterprise. The largest of these firms, Saudi Aramco, is estimated to be worth four times as much as ExxonMobil and the rest of the top 10 publicly traded global energy companies combined.
With so much of the world's energy supply under the control of state governments, Canada's role as a market-driven, energy exporting nation can be used to our advantage.
An equally important consideration is to ensure an environmentally aware population of the safety provisions of modern day ships operating off the coast of British Columbia. Most are likely unaware that these ships have been redesigned with safety in mind, that they are dual-piloted and guided by local captains when they come into port and depart under the watchful eye of multiple tethered tugboats.
Obviously no system is perfect or without risk, but we believe this system is safer than many others that we rely on every day.
Canadians should have a better appreciation for both sides of this discussion. I believe we have a responsibility to examine each of the market diversification options that are on the table at this time on the basis of its merits, with an informed evaluation of their risks and respectful of any regulatory review.
Better information will enable us to elevate the dialogue on energy issues in this country. We need a discourse that properly balances risk with the scope of the issue. Canadians need to appreciate that whether or not another foot of pipeline is ever laid in Canada, global suppliers will ensure that hydrocarbons are made available to satisfy that demand.
A CIBC report issued earlier this month stated that Canada lost $25 billion in 2012 due to oil price differentials. A barrel of oil from western Canada has the same greenhouse gas emission profile regardless of the price it fetches on the global market. In a time when governments at all levels are being asked to do more with less, leaving $25 billion on the table makes us all poorer.
It becomes easier to act in our own self-interest when we can point to the great efforts we are making to become one of the world's most responsible producers of energy. We have an opportunity to leverage our resource endowment and to properly invest the proceeds in initiatives that elevate our status as a nation. One need only look to the Norwegian sovereign wealth fund or to the work being done by Masdar in the United Arab Emirates for an appreciation of the benefits that can accrue to countries with well-articulated resource strategies.
We want Canada to make investments that properly leverage our resource endowment while respecting the environment. Smart climate policy helps our natural resource sectors to thrive. It encourages efficiency, it breeds competition, and it lends legitimacy to the pursuit of profit. It also expresses the will of the people, satisfies their need for social license to operate, and to grow. Just as our firms have a fiduciary responsibility to maximize profit, our leaders have an ethical responsibility to future generations.
Properly sited infrastructure can address the former and continuing to raise the bar in addressing climate change can address the latter.
Thank you.