Natural Resources Committee on Sept. 20th, 2023

[The Chair, Liberal, John Aldag]

We're half a minute over, so I'll stop us there. Thank you.

We're going to go next to Mr. Sorbara, who will have five minutes on the clock.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Thank you to the witnesses here today. The testimony has been very insightful.

I want to go to the gentleman from the World Resources Institute, Dr. Daniel Lashof.

The United States' IRA, CHIPS Act and infrastructure act.... I like to think that the IRA was a catch-up from our biggest trading partner and closest ally in terms of coming to the clean energy table and in terms of decarbonization. For many years, we here in Canada have put forward policies in terms of decarbonizing our economy, growing our economy and growing new sectors.

You spoke about the five pillars of transformation. I found it quite insightful. I just want to get your take. What is the update on how the IRA is decarbonizing the U.S. economy along with the other bills? If you could just keep it to 30 seconds, that would be great because I do have a couple of follow-up questions.

[Dr. Daniel Lashof]

Sure. Thank you.

I think it's incredibly successful so far. It's only a year in, but as I said, it's over $200 billion of investment in a 12-month period from July 2022 to July 2023, so we're seeing a rapid acceleration. There are some hiccups. Wind has been mentioned. There has been a slowdown in wind. I think that's mostly due to higher interest rates, and I believe that will be temporary. However, in the meantime, we've seen record installations of solar, which is now the cheapest source of energy anywhere in the United States and in most places in the world.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

My second question is on, I believe, the fifth pillar of the transformation, where you spoke about the natural and technological ability to remove carbon from the remaining greenhouse gas emissions. I take it that you would think that CCUS or carbon-capture sequestration would be one of those strategies?

[Dr. Daniel Lashof]

In pillar five, I'm really talking about carbon removal, so that would involve carbon sequestration underground after carbon that's already in the atmosphere is removed, for example, through direct air capture.

I do want to emphasize that I agree that this should be a secondary strategy, that at least 80% to 90% of the effort to decarbonize needs to be emissions reductions from sources. In fact, California has passed a law requiring that 85% of the reductions come from emissions reductions from sources, using carbon removal only for the remaining 15%.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

In your view, what is the role of natural gas in this transition?

[Dr. Daniel Lashof]

Natural gas is a fossil fuel. It has both carbon dioxide emissions and very significant leakage of methane. We need to phase it out as quickly as possible, along with other fossil fuels. It will play a role in balancing the electricity grid over the next decade or so because it is flexible, but we will need to replace natural gas with other clean firm generation sources that can serve that purpose in order to achieve 100% clean electricity by 2035.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, sir.

I am going to move to the Alberta Federation of Labour.

Mr. McGowan, thank you for your testimony, and also thank you for your work in everything from pension reform to minimum wage and improving the benefits and the labour code with regard to employment standards, all stuff that I know Canadians across the board and, of course, here in Alberta are quite proud of.

The role of renewable power in Alberta has been discussed considerably. Alberta is blessed with a lot of sun and a lot of flat land, if I can use that term, to put in renewable power. Just how disappointing was it to see the pause, if it was an actual pause, on the renewable power contracts and projects that were going to occur?

[Gil McGowan]

It was devastating. I think the moratorium has to be put in context. Alberta was leading the country in terms of attracting investment in the renewable sector. In fact, there was no other province that was keeping up with us on a proportionate basis. We were attracting more investment. We were creating more jobs and more new generation from renewables. That's all been put in question.

Our politicians talk about an Alberta advantage. We had an advantage and we're giving it away.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. McGowan.

There has been a lot done in Alberta. TransAlta and a number of the companies there have removed coal production and decarbonized, so there is some great work being done in the province of Alberta.

[The Chair, Liberal, John Aldag]

We're at the end of the five minutes now.

We have next up Mr. Simard, who will have two and a half minutes on the clock.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Raphaël Gaudreault, from Arianne Phosphate, we've spoken before. I am not lying if I say that the phosphate found in the deposits in Saguenay is special because it has purity that is not found elsewhere, which makes it possible to avoid an operation to clean it up and perhaps use it in batteries, among other things.

I understand that, for a phosphate project to get off the ground and become part of the battery sector, phosphate would first have to be on the list of critical minerals. Is that correct?

[Raphaël Gaudreault]

Yes, that's correct. What this inclusion on the critical minerals list represents is access to research and development grant programs and support for infrastructure development programs to support the development of the mining project. It could also speed up the approval process for certain components of the project. In addition, it would be undeniable proof that the government recognizes the strategic importance of the mineral in question, which can be very important in attracting investors.

A number of other witnesses have talked about the ability to produce energy. The lithium-iron-phosphate battery is ideally suited to store the energy produced by wind farms and solar panels to meet energy needs during off-peak periods, as it is able to support multiple charge-discharge cycles while generating very little residual heat. So it is important for Canada to position itself and to be able to produce these batteries.

[Mario Simard, Bloc, Jonquière, QC]

Since I don't have much time left, I just want to emphasize another point. Right now, since phosphate is not on the critical minerals list, you do not have access to the critical minerals research, development and demonstration program, which means that you are being slowed down even more. That's my understanding.

[Raphaël Gaudreault]

That is indeed the case.

[Mario Simard, Bloc, Jonquière, QC]

I finished right on time.

[The Chair, Liberal, John Aldag]

That's perfect. Thank you.

We'll now go to Mr. Angus, who also will have two and a half minutes for his round of questions.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you very much.

Thank you, Mr. Lashof, for joining us. I heard you speak at the NATO conference recently in Washington, and I was really interested in having your expertise.

My office has paid very close attention to the proposal for the IRA, the haggling that went on and the negotiations. Something I've always found in my many years of public service—I had dark hair when I first came here—is that when you bring forth legislation it's like pushing a mountain. If the mountain moves two inches or a foot, you think you've exceeded all expectations, yet within 12 months of the IRA the numbers we're seeing are staggering. You mentioned something over $200 billion in private sector investment. We've talked a bit about offshore wind, but the offshore wind projects that are already up in Martha's Vineyard and Rhode Island will be powering 600,000-plus homes.

How important do you think the IRA is in terms of driving a new economy, creating new jobs and addressing the climate catastrophe that is unfolding all around us as we speak?

[Dr. Daniel Lashof]

Thank you for the invitation.

It's absolutely essential. I think we were playing catch-up. We were behind, and I think we've leapfrogged a bit. We're hoping that everyone else will join the race to the top.

As you say, it didn't achieve everything we wanted. There were some important provisions, such as a clean electricity standard, that were dropped in the legislative process. That happens, but nonetheless, it is transformative and it is really fantastic that the U.S. now has a solid climate policy in place.

I also had much less grey hair when I started working on climate policy.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Just quickly, last week the International Energy Agency stated that the end of the era of fossil fuels is imminent. Part of that was due to the IRA and the other part was from huge investments in Europe.

Have you read the IEA report on the need to transition quickly, because, otherwise, there are going to be huge climate and financial risks to those who stick with traditional oil and gas?

[Dr. Daniel Lashof]

Yes, I'm familiar with that report. Also, the World Resources Institute has a systems change lab that's tracking 40 indicators of the transformation. None of them are going fast enough. Everything needs to accelerate.

[The Chair, Liberal, John Aldag]

That's great. Thank you.

We'll now move to Mr. Falk, who will have five minutes for his questions.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to all of our witnesses today. Your comments have all been interesting. I'd like to ask all of you lots of questions.

I will start with Mr. Saik.

In your presentation, you indicated that we have a significant need, in order to meet our climate aspirations, to increase crop yields, both for fuel stock but also from a food perspective. This NDP-Liberal government has placed a moratorium on fertilizer, which hampers the production of cropping. How can we increase our yields in that scenario?

[Robert Saik]

There's not an absolute moratorium. It's more like an altruistic goal to reduce nitrous oxide emissions by 30%, which we can achieve in a variety of ways. However, it is short-sighted to think that you can implement policies that handcuff farmers' ability to grow crops while at the same time asking farmers to grow crops, contribute to greenhouse gas emission reduction and help reduce climate change. Just in context, 50% of the protein in every man, woman and child on planet Earth comes from nitrogen fertilizer.

Now, we need to improve the efficiency of nitrogen fertilizer. Farmers should be given credit to do so and, rather than with sticks, we should be encouraging them to adopt new technologies with carrots.

[Ted Falk, Conservative, Provencher, MB]

I'll move my questions now to Mr. Gaudreault.

You indicated that you have a phosphate resource that you would like to develop. Recently, this government gave close to $20 billion to two automakers to invest in production plants here in Canada. One of the targets they're pursuing is the production of batteries for the electric vehicle market. You need critical minerals to do that, and you have access to a phosphate resource. In addition to that, you have something that Mr. Saik needs, which is fertilizer for his crops.

Can you tell me how Bill C-69 has impacted your ability to open that resource, to exploit it and to actually contribute to meeting some of the climate aspirations these governments have?