Natural Resources Committee on April 3rd, 2014

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Thank you very much, Mr. Chair.

I have a few questions for Mr. Mousseau.

How would the oil and gas industry benefit from a comprehensive energy strategy that took all types of energy into account? And by that, I mean a balanced and cohesive strategy that is mindful of climate change.

[Normand Mousseau]

I think Ms. Kennedy partly answered that question when she said that Suncor is already factoring climate change-related elements in its long-range pricing. So it is definitely in the interest of any international oil company to show they represent a country that is sensitive to climate change. To my mind, that is one practical aspect that's being overlooked right now.

British Petroleum, now called Beyond Petroleum, exemplifies another issue I think is important. What we are seeing are efforts being made to implement technologies that could be used by the same companies in the long term. Lastly, I would say that renewable energy research is also important to Canada's long-range positioning in terms of the entire industry.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

How would a comprehensive strategy that takes all types of energy into account, one that reflects a pan-Canadian vision for energy development, directly benefit oil companies?

[Normand Mousseau]

It would increase the benefits for the energy sector country-wide. As I said, it would also allow the oil industry to position itself. Many oil companies around the world are involved in different energy systems and are endeavouring to expand their activities to position themselves for the future, with growing investments in renewable energy.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Might there also be a strategic advantage in utilizing our energy systems more effectively? What I mean is achieving the right balance between renewable green energy sources and non-renewable sources, taking into account an eventual shortage globally.

[Normand Mousseau]

We shouldn't experience a shortage of fossil fuels in the next few decades. So that shouldn't dictate how we position ourselves. Instead, that positioning should centre on pricing in the world market, where the pressures and repetitive effects of global warming are very real.

Governments need to act. And fossil fuel prices would therefore be affected. It would rebalance things and steer the competition towards renewable energy. Canada must have a presence in that sector if it wants to compete internationally.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

What is your take on oil companies that decide to incorporate green energies in their portfolios in order to benefit from both energy sources? Do you think that's a good vision, a good strategy?

[Normand Mousseau]

I do indeed think it's a good strategy. These companies usually have a lot of money, with oil being an extremely profitable business these days. And putting a bit of that wealth towards diversification is certainly strategic for the long term.

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

I had a chance to skim through one of your books, Au bout du pétrole.

Are you able to explain to me why gas prices at the pump continue to rise even though we are producing more and more oil?

How could we take better advantage of our resources?

[Normand Mousseau]

A number of countries subsidize the cost of gas domestically to make it less expensive for people. But that isn't a good idea. Governments need to accept the market price of gas, even add taxes, in order to reduce our dependence on it and become more effective and efficient energy-wise.

A number of prices come into play. The international market determines the price of crude oil, and the fact that the process of extracting oil today is more expensive than it was 20 years ago has an effect on that price. Environmental impacts also have to be taken into account, and taxes are a way to address them. That's the government's job, as Mr. Leach was saying earlier.

[The Chair, Conservative, Leon Benoit]

Merci, Ms. Moore.

Continuing the five-minute round, we go now to Mr. Leef, followed by Ms. Charlton, and then Mr. Calkins.

Go ahead, please, Mr. Leef, for up to five minutes.

[Ryan Leef, Conservative, Yukon, YT]

Thank you to all our witnesses.

The reason we undertook this study to find, obviously, the cross-country benefits is partly that there just seems to be a permeating sense that Alberta is the only province that benefits from energy development, oil sands development. It's easy to villainize something when you don't appreciate the benefits in your own backyard from something. The discussion—and we see it here today—has been couched in terms of we aren't realizing any benefits versus couching it as though it would be nice to maximize the benefits.

The other way it's couched—and Mr. Leach sort of leaned to this—is that we've presented this either/or discussion. Certainly I think we as a government have been trying to make sure that we've been promoting the responsible resource development angle, which means we aren't proposing an either/or scenario. We understand that care and concern for the environment and natural resource extraction aren't mutually exclusive things.

Ms. Kennedy, I have a couple of direct questions for you just to get it on the record. Would you agree with the characterization that the oil sands is dirty oil?

[Heather Kennedy]

No.

[Ryan Leef, Conservative, Yukon, YT]

Would you agree with the characterization that you enjoy the benefits of an unregulated development?

[Heather Kennedy]

I think we enjoy the benefits of one of the strongest regulatory regimes in the world, and I think we try to be a good corporate citizen within that.

[Ryan Leef, Conservative, Yukon, YT]

Would you agree with the characterization that no money from the oil sands flows into important social programs, in infrastructure development, a wide range of public transit, housing needs, all kinds of other government-based programs and social delivery services?

[Heather Kennedy]

No, we're a strong contributor to Canada. We're proud Canadians.

[Ryan Leef, Conservative, Yukon, YT]

Part of the challenge when we get into this, the way things are couched and the public discussion around this, and to maximize realizing the benefits, starts I think with public leadership.

I won't expect you to weigh in on a partisan comment, but it's interesting that we have as an example an NDP candidate in the Trinity—Spadina riding, Joe Cressy, who is stepping out and saying these things about oil sands development. It's no wonder we face a challenge in helping people across Canada realize the benefits when the people in charge of, or looking to be in charge of, public policy and looking to lead this nation on this kind of discussion are starting out with rhetoric like that.

How challenging is it for companies like yours to help articulate the benefits that we are realizing, not just the maximization of it, when there's that kind of rhetoric and then just some challenges with the couching of the discussion in general?

[Heather Kennedy]

It can be very challenging. I would say one of the things that we have learned over the years is that the approach to ask every Canadian to be as technologically up to date on the oil sands as some of the engineers who work for us is a bad approach. We tried that at first. It's a very complicated business, so explaining it in graphic detail doesn't work.

As an oil sands company, I can say we recognize there are major detractors for the industry. There are those who will never think that extracting the oil sands can be done responsibly. We don't believe that, and we don't believe that the majority of Canadians think that. We know that the majority of Canadians actually would like us to make sure that we collaborate, work with policy developers, and so on, to actually do it as responsibly as we can. That involves, of course, academia. It involves think tanks, industry, and certainly government. A fulsome look at the policy to make sure that as we tackle some of the impacts, we're doing it in a way that makes sure we see the right benefit to the environment or the right social program, we think is an important approach.

We think it's also important that we tell our story about the benefits across Canada. We're all over the country. People own those Petro-Canada gas stations, and they work in them and their children work in them. We bring in students from every university across the country. We've actually initiated a program called whatyescando.com. I certainly encourage anyone here to look at that. It's our way of trying to make sure that the story is told in a way that is fact based and allows people to have a look and say, “Wait a minute. This isn't all about this particular issue. There's more to be told.” We think it's worth people examining and understanding.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Leef.

We go now to Ms. Charlton, for up to five minutes.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Thank you very much to all the witnesses.

Unfortunately, I only have five minutes. Being from Hamilton, I have to start with steel.

My first questions are for you, Mr. Watkins. We had the Canadian Manufacturers & Exporters here before committee on Tuesday. I don't know if you heard the testimony at that point.

[Ron Watkins]

I did, yes.

[Chris Charlton, NDP, Hamilton Mountain, ON]

We heard that for every dollar invested in the oil sands, there's a 20% return to the manufacturing sector.

Do you know what the return is to the steel sector in those percentage terms?

[Ron Watkins]

I don't think I could give that to you this morning. I could come back to you on that, if you wish.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Is it probably somewhere in that ball park, do you think? It's a pretty high return.