Natural Resources Committee on April 29th, 2014

[Ted Opitz, Conservative, Etobicoke Centre, ON]

I'm sorry to be curt. I only have a couple of minutes left, I think.

I want to direct that question then to Poland because I think they might have a different view simply because Poland has done quite well in comparison to Ukraine in the same period of time. It is coming up to the 25th anniversary of their first free election. Poland's economy has grown four times that of Ukraine because of, I think quite frankly, better governance and the absence of the type of corruption that you've seen in Ukraine.

In Poland, what would your view be about Canada's ability to supply safe, stable, well-priced energy products from Canada, and clearly our ability to produce and transport it across the country safely?

[Anna Barbarzak]

I will try to detach the two parts of the question because, first, you're right about the issue of the pace of the dynamics of the developments in Ukraine and in Poland in the energy sector. When you compare Poland and the Ukraine 20 years ago, we were moving from comparable situations. We were also highly inefficient with infrastructure that needed to be modernized and we were ahead of the entire system of multilateral changes and reforms that were quite painful, especially for some participants of the energy sector. There are challenges ahead of us, but certainly we have made significant progress, especially when you look at the two countries.

I would say that the conviction that you can make a change and the appropriate management of the entire reform process is key to the success of this exercise, of this effort, and this is what we have to look very carefully at in the case of Ukraine so that we can assist Ukraine in supporting these reforms and the modernization challenge. I'm rather certain and I'm quite optimistic about the role of Canada in ensuring and enhancing the energy security of Ukraine and of Europe, and should I have any more time I'll probably develop this topic. We are very optimistic about it.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

Thank you, Mr. Opitz.

We go now to Ms. Duncan for up to five minutes.

Go ahead, please.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair.

This is a very interesting discussion. I want to thank you in advance, if I don't get a chance after, for all of you appearing, especially those out west in Alberta because it's earlier for you.

Having heard the testimony from the Polish delegation, I'm wondering if I can go back to our Canadian industry sector. I'm wondering, Mr. Langrish, in the Canada Europe Round Table for Business, do any of your members include the energy efficiency renewable power sector or is it only fossil fuels?

[Jason Langrish]

No, and very few companies are only in fossil fuels anyway. They tend to have diversified portfolios that also have renewable energy arms. Our members are across the board so they range from everything. We would have companies that provide turbines, companies that are involved in building LNG facilities, companies that build wind farms, and companies that build bridges—you name it—so it's across the board; it's all forms of energy production.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So you do have a good number of the members of the corporations in the wind. Do you have members in the solar sector or energy efficiency sector?

[Jason Langrish]

They would have solar. They would have subsidiaries that would be involved in the development of solar power, yes.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

The independent corporations are focusing on that.

[Jason Langrish]

But the thing is....

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I'm just curious because this is news to us. We weren't aware that there was a delegation of business people who went with the government over to address these issues. I'm just kind of curious.

Mr. Sorensen, you spoke about being part of a delegation to Germany that also met with their leader Merkel. It's my understanding, from a lot of presentations by German delegation, that they're actually being very successful and they've decided to get off fossil fuels and move majorly to wind and solar.

I'm wondering if, in your delegation, it included Canadians who are experts on energy efficiency, and not just more efficient extraction but also efficient use, either by industries, small business, or housing.

[Alfred Sorensen]

I never selected the people who went. I think there was a variety. There were only 25 or so people, and they were from manufacturers in the auto industry and aeronautics—quite a broad range of individuals. I think I might have been the only energy person who was there, to be honest. I don't quite remember. I do think that the principal reason I was invited was that we had already done the significant transaction with Germany and, if you look at the value of the transaction we put together, it's roughly $45 billion, so it is a fairly large transaction.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you. I'm simply following up on that because clear interests were expressed by our delegation in Poland, recognizing that that that is something that Europe is pursuing and that we certainly have fantastic enterprises in Canada that could also offer that expertise.

I would like to go back to our Polish witnesses. I understand that you are close to completing your LNG facility and that you do have a contract already, I think with Qatar, but that you were also looking for additional suppliers. Have you already signed additional contracts? Are you pursuing them? Can you give us a vague idea if you are getting close to completion of a supply channel from other sources?

[Anna Barbarzak]

I will let Mr. Cios give you a little bit more details on that. We have a contract with Qatar, which I will let Mr. Cios speak about.

[Dr. Stanislaw Cios]

The contract with Qatar is for roughly 1.5 bcm annually for 20 years.

Currently the Polish companies do not having any contracts for supplying LNG in the coming year or so.

The terminal itself will be finalized as regards the construction by the end of this year. It will probably become operational after the preliminary tests sometime in the spring next year.

Of course, the companies that are interested in distributing natural gas on the market will make a detailed analysis of the market with a view to buying gas from suppliers other than Russia or Qatar in the future. But since the import possibilities from Canada or the United States right now are limited by the fact there are no facilities that can export LNG right now, no decision has been made yet regarding the future supply of LNG to Poland.

Thank you.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you very much.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Duncan. Your time is up.

We go now to the parliamentary secretary to the Minister of Natural Resources, Ms. Block, for up to five minutes. Go ahead please.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much, Mr. Chair.

I join my colleagues in welcoming all of you to this committee and this study that we are doing. It has been an excellent morning and I've appreciated all of your testimony.

Our government understands the importance of diversifying our markets. I believe this is demonstrated through our responsible resource development plan that fosters a stable investment climate by implementing fixed timelines for project reviews and streamlining the regulatory process to reduce duplication.

We have also made significant investments to ensure that we will continue to benefit from Canada's vast natural resource endowment. All of this I believe positions us very well to take advantage of international market diversification opportunities. I note that both Ms. Barbarzak and Mr. Langrish have highlighted the opportunities that we have to diversify our markets. You've done very well in putting into context all that's been put into place in our relationship with the EU. Ms. Barbarzak, you've also alluded a couple of times to your desire to be able to speak a little bit more to the opportunities, the optimism, and certainly what you think should happen in the short term to address energy security for the EU.

I'm wondering if both Mr. Langrish and you, Ms. Barbarzak, could comment on that.

[The Chair, Conservative, Leon Benoit]

Maybe we'll start with Mr. Langrish.

Go ahead, please.

[Jason Langrish]

Just as I said earlier, it depends on the energy source you're talking about. As an example, some economies in Europe are using a lot of renewables, but the baseline energy, the baseload, could very well be coal power or nuclear energy being fed in from France. So, there are a million different ways in which you can provide energy. That's the first point.

The second one is that the commercial relationships, the ties, and the architecture are there to facilitate this. The infrastructure is probably not in place, but the architecture, the investment rules, and the abilities to move skilled people back and forth and to protect intellectual property—all of those kinds of things stimulate business between the two sides.

However, the energy security piece is still unclear to me. I really don't know where it's going to happen. It seems as though it's going to be very challenging to help Ukraine directly with its energy security, especially considering that the economic climate seems to be going in the opposite direction right now. But let's say there's a possibility there. Certainly Canadians are well placed to do it, but it's just a question of what kind of environment is in place.

The other piece, in terms of feeding into western Europe, is that it's a question of their outlook on our energy, for one thing.

The other thing is that I was part of the business group that was over in Europe with the Prime Minister. For instance, when talking with the Germans about their relationship with Russia as an energy supplier, I didn't get the sense that they're overly concerned about it. They have a stable long-term relationship. I think the real issue they have is that because western Europe is so reliant, to a degree, on Russian resources, they're limited in how they can respond to other geopolitical issues. So, that's their conundrum.

But if you're looking directly at the energy security piece, I don't see alarm bells there. There's no concern that Russia is not going to live up to its terms. So this energy security piece is really more an issue of concern for eastern Europe and Ukraine—

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

[Jason Langrish]

—and I'm not really sure how we get there.

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you.

Ms. Barbarzak.

[Anna Barbarzak]

I'm not sure if I understood your question right, but when we're talking about energy security, we are at the stage now in the European Union that the situation in Ukraine has stimulated internal EU discussion on how we can be more effective in achieving the goal of energy security when we have almost 30 nations altogether with different energy mixes, which all reserve the right to create their own energy policies.

Following recent developments, our prime minister has proposed a set of suggestions and recommendations on how we can build upon the energy and on our cooperation so far and how we can strengthen our efforts to build energy markets in Europe.

If you are interested, there are six points in this proposal that was introduced by our prime minister. I can present it to you, but I'm not sure if that's the question.

I'm a little bit confused here.

[The Chair, Conservative, Leon Benoit]

Okay, your time is up, Ms. Block. Thank you for your questions.

If you'd be willing to email the committee the six points, that would be appreciated.

[Anna Barbarzak]

Absolutely, yes I will.