Natural Resources Committee on April 8th, 2014

[The Chair, Conservative, Leon Benoit]

Who wants to start on that?

Mr. Streeper, go ahead.

[Bill Streeper]

Well, I could name two of them right off the bat, and those are Alberta and British Columbia.

And then there are Saskatchewan and Manitoba.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

I'll name the other two, which are Saskatchewan and Newfoundland and Labrador.

And the common theme among these four provinces would be what?

[Bill Streeper]

Well, between British Columbia and Alberta, it is energy.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Absolutely, and that's the point I'm trying to make. It's the same for Saskatchewan as well. Mr. Trost is here. He's a Saskatchewan MP. Newfoundland and Labrador is now a “have” province as well, according to that. There are a lot of folks around this table whose political views might be different from mine. Some of them even have difficulty filling up seven minutes with positive questions about the oil and gas industry, but eventually they come around and are able to do that.

I want to ask you what the significant benefit would be to furthering gas exploration insofar as being able to provide liquefied natural gas to the Asian marketplace goes and what that would do. I know I have lots of constituents in my community who have actually worked in northern B.C. to help with that natural gas exploration. Have there been any studies done for northern British Columbia about what the future might hold should LNG shipping off the west coast become a reality?

[Bill Streeper]

We have, as a municipality, already done a study regarding taking the population from 6,800 up to 15,000. We have done engineering on water supply, sewer supply, roads, access, power to be supplied, and the complete subdivision developments in terms of proper zoning. We have also looked at infrastructure for industrial subdivisions to supply land for the service sector people in the oil and gas industry. We are preparing ourselves right now for the whole LNG industry if—or rather when—it goes ahead. We will also gain in taxation benefits from all of the plants and the pipelines involved in this.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

That's fantastic.

Mr. Turner, I'll turn to you for a moment. You talked about the moratorium on gas exploration. The moratorium is actually on hydraulic fracturing, is that correct?

[Peter Turner]

No, it's actually on any oil and gas exploration within the Whitehorse Trough, which is a geographical region that extends to the southeast of the city of Whitehorse. That's a five-year moratorium.

As was alluded to earlier, a portion of the population is pressing for an absolute moratorium on hydraulic fracking across the Yukon.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Okay, that's obviously not based on anything scientific, because we've had massive amounts of hydraulic fracturing. I've worked on the rigs in Alberta. In deep wells, it's not an issue. Saline water down deep doesn't even come close to mixing with surface water. It's unfortunate that it's done that.

Can you tell this committee, as a result of this moratorium and the inability now of Yukoners to use their own local energy resources, what subsidies are needed in order to provide a reasonable cost of energy to Yukoners at this particular point in time?

[Peter Turner]

Well, I can't speak to the actual dollars associated with it. But obviously every diesel generator that generates electricity here in the Yukon is getting its oil sourced from, I believe, your province as a matter of fact—

[Blaine Calkins, Conservative, Wetaskiwin, AB]

You're welcome.

[Peter Turner]

—so we're delighted to be creating a source of employment and revenue for your province. We're a little more disconcerted that we have to truck it 2,000 kilometres to get it here, both of which would be arguments for trying to have an indigenous production capability.

We'd be even more desirous of that in terms of natural gas, because we see that as being a cleaner source of electrical generation up here, and we already have some proven reserves of natural gas here in the Yukon, which currently I believe are being piped down to Fort Nelson, in that direction.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Calkins.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, witnesses.

[The Chair, Conservative, Leon Benoit]

Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Mr. Turner, in 2012 the Prime Minister of Canada signed a historical resource revenue-sharing agreement with the Government of Yukon. Can you talk about how that might be realized or what sort of benefits the Yukon would realize with a developed LNG and oil and gas sector with the resource revenue-sharing agreement that was signed, particularly when you consider that $890 million of the $1.3 billion territorial budget comes directly from federal transfers right now?

[Peter Turner]

Exactly.

In broad strokes there would be an additional stream of revenue coming from a resource industry to the peoples of the Yukon including, in particular, the first nations. You've hit on a very salient point for the Yukon, which is that more than half of our territorial budget is coming from transfer payments. Thank you very much again, Alberta and B.C. We in the chamber would like to actually be standing on our own two feet. We believe it would be healthier for the economy if more of our revenues were being self-generated in terms of employment and opportunity.

[Ryan Leef, Conservative, Yukon, YT]

You touched on the first nations benefits. Currently there are several first nations that have signed impact benefit agreements in different extractive sectors. Could you touch on any anticipated IBAs and how that growth has been positive for first nations, and where they might go with enhanced oil and gas or energy sector development?

[Peter Turner]

I do know that several first nations are looking into striking partnerships in the transportation of liquid natural gas to generating facilities being planned or anticipated here in the Yukon, both in terms of the Yukon electrical generators here in Whitehorse and future mining sites that will be powered by liquid natural gas generation.

I should note that already there are liquid natural gas trucks transporting liquid natural gas all the way through the Yukon up to Inuvik which has just converted over to a natural gas powered electrical generation facility. So we already have a significant amount of LNG being transported through the territory all the way up to Inuvik. We would anticipate further transportation opportunities for first nations trucking companies and all the peripheral employment, were there to be further use of natural gas generation facilities both for electrical power here in the territory on the grid, and for the mining sites.

[Ryan Leef, Conservative, Yukon, YT]

I think for the record it would be important to note that the Government of Canada has teamed with the Government of the Yukon and regional municipalities to invest directly in biomass energy generation. As a great example, Haines Junction received half a million dollars from the federal government to explore biomass potential there. Forest inventory and geothermal wind in Kluane First Nation.... Pellet boilers are a great example. We're getting pellets from Fort St. John to help heat the correctional facilities. Of course the $71 million in the Mayo B hydroelectric facility is right from the Government of Canada. Those have all been great and they're helping very small regional exploration of energy development. But on a much bigger scale in terms of the energy consumption that you highlighted, in terms of hydroelectric capacity and the realities of how much influence wind energy biomass can actually have considering the development needs we have....

Could you touch on some of the agreements or necessary conditions that the Government of the Yukon has in terms of development with first nations corporations when they engage in contracting of particular infrastructure projects? What is the Government of the Yukon obligated to do in terms of working with Yukon first nations corporations?

[Linda Duncan, NDP, Edmonton Strathcona, AB]

This is all very interesting, but what does what the Government of the Yukon is doing have to do with this federal parliamentary committee?

[The Chair, Conservative, Leon Benoit]

Mr. Leef has connected his questions with the economic benefits of the oil and gas sector, which is what this study is about.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

At the territorial level....

[The Chair, Conservative, Leon Benoit]

It doesn't matter what level.

Go ahead please, Mr. Leef.

[Ryan Leef, Conservative, Yukon, YT]

Mr. Turner, I think, was going to answer that.