Transport Committee on March 6th, 2012

[The Chair, Conservative, Merv Tweed]

Do the manufacturers have a problem with the add-on kits that they would install? Think about that.

Go ahead, Mr. Toet.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair, and my thanks to our guests today.

Actually, the chair led into what I wanted to talk about. You saw quite a few vehicles converted in the eighties and nineties. I had friends who had converted, and one of the challenges was a loss of power. What is the industry doing to work through that attitude shift? I come from the print industry. We went through a lot of innovation over the last 20 years, and it wasn't somebody else's responsibility to bring that innovation forward. It was my responsibility to bring that to the consumer.

What are the industries doing to bring forward what your industry is offering as an alternative fuel source that will benefit consumers?

[Jim Facette]

The first thing the industry did was form the Canadian Propane Association. We're a new industry association based in Ottawa, with offices across Canada. It's education; it really boils down to industry getting out there and telling individuals like yourselves about the options and technology available today.

The United States has a funded education research council called the Propane Education and Research Council, or PERC. There is a small federal levy on the propane sold in the U.S. It goes directly into research and development and advocates for the use of propane in various utilities and transportation modes. In fact, there's a conference going on right now down in Orlando looking at propane in transportation, especially in heavy vehicles, so industry is trying to get out there in forums like this to talk about the new technology. Governments can work with us in doing that.

[Dr. Sam Shaw]

I had said, with regard to education, that we put on summits here in Ottawa to make people aware of natural gas for transportation. We've led by example with our own fleet, particularly with our rig operations and our collaboration with OEMs. We have been working with the OEMs to come out with product. I'm pleased that yesterday's Globe and Mail talked about that.

Going back to the home refuelling, we're also working with our colleagues in the U.S. We put out an RFI to 42 companies in eight countries around the world, and we're trying to get a response to bringing the cost of home refuelling down. We also support a lot of research in universities across Canada, as well as in the U.S. From a company standpoint, what with community investment and working with other companies on natural gas, we're doing a lot.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

All right.

It just strikes me as a little ironic, Jim, that we're seeing a shrinkage of the infrastructure for propane at a time when we should be looking to expand that infrastructure. What's the propane industry doing to change that?

If there are regulation issues, have there been ongoing conversations with the different authorities to work through those processes? You talked about the European example of tanking, and I am familiar with it. That technology was actually developed in my riding. In Winnipeg there's a company that has developed a technology for dispensing those fuels and is selling it all over the world, except in Canada.

Has there been ongoing work? Have there been conversations with the regulating authorities? I would also encourage you, as Mr. Poilievre indicated, to give us those regulations that are of concern.

[Jim Facette]

We will go through the regulations and we'll give you our response right down to the paragraph as well as we possibly can.

The short answer to your question is yes. Those conversations have begun, and they probably only began in the last couple of years. They take time.

We'll acknowledge that part of our challenge in the industry is to address the image issue that your colleague over here referred to. It's not just about propane, but about fuels in general, and it's to have a comfort level in handling the fuel by yourself. There's a comfort level in going to a gasoline station and fuelling your own vehicle. We have to get to the point where there's a comfort level in fuelling your own vehicle with propane as well.

Yes, the conversations are going on, but it's going to take some time and a lot of hard work.

[The Chair, Conservative, Merv Tweed]

I'll have to stop you there. We're going to do one last round, although I do see lights flashing. I'm not sure if anybody is aware of what that is, but I'm going to do a last....

[A voice]

It's your medication.

[Voices]

Oh, oh!

[The Chair, Conservative, Merv Tweed]

I set myself up for that, didn't I?

I'm going to do a last round of three minutes each, and then we can deal with Ms. Chow's motion, subject to.... I see the lights just went out.

Mr. Sullivan, you have three minutes.

[Mike Sullivan, NDP, York South—Weston, ON]

I'm going to go back to what Mr. Poilievre was talking about earlier, and that's the price of natural gas.

It is at a historic low, or close to a historic low. It's difficult to convince consumers that we should convert our personal passenger vehicles to natural gas because the price is low when it can only go up. His question was on the payback time of eight years on the basis of.... Given the life of most vehicles, the historically low price of natural gas is not going to convince a lot of consumers. If we were looking at large fleet operations and large engine operations, that would perhaps be a better way to go for the natural gas industry.

Do you have a comment on how long we are going to have these low prices? What's the result?

[Dr. Sam Shaw]

Whatever I say, please take it as a caution if you're going to invest in or are an investor in Encana.

However, I will say that the supply side is very high. Globally we now have Germany, Poland, offshore Israel, and Australia all making major natural gas finds, so this is not a phenomenon in just North America. It is global in terms of the supply side of natural gas and in terms of keeping the price lower for the foreseeable future.

[Mike Sullivan, NDP, York South—Weston, ON]

The other question I have is on the ultimate cost of the fuel. Do we have figures on how much energy it requires to compress it?

In other words, we have natural gas that appears freely or is fracked to become available to consumers, and then we've got to squeeze it down into a much smaller piece of energy in order to be able to carry it around. How much does that cost in terms of the overall price of the fuel? Is that part of the calculation?

[Dr. Sam Shaw]

One of the graphs I'll show you in the handout shows the cost of the energy it takes for home refuelling and so forth, and the pricing it will give you. It will give you a graph for that.

[Mike Sullivan, NDP, York South—Weston, ON]

There was a peak in the use of public transit vehicles on natural gas, and it seems to have fallen off. Do you have an explanation for why the municipalities are giving up?

[Dr. Sam Shaw]

I think the technology was not appropriate. There's new technology; look at Flyer, with its natural gas transit buses. Calgary has made a commitment for 200 natural gas buses. The biggest difference between Canada and the U.S. is the Clean Air Act in the U.S. L.A., for example, got rid of its last diesel in January of 2011. It operates on CNG completely. Companies like Flyer are producing really great product because the technology of the engines has changed dramatically.

[Mike Sullivan, NDP, York South—Weston, ON]

We need a Clean Air Act in Canada, then.

[Dr. Sam Shaw]

You might say that; I can't.

[The Chair, Conservative, Merv Tweed]

Thank you, and I'll put in a plug for Flyer, which is based in Winnipeg, Manitoba.

Monsieur Coderre is next.

[Denis Coderre, Liberal, Bourassa, QC]

It will all end in Montreal anyway, so it's okay. We'll talk there.

What's your relationship with the department? How do you manage? You spoke about the road map and you want to be part of it. From the natural gas perspective as seen through your company, how do you manage? How do you work with them?

As well, there are a lot of issues regarding R and D, so what's your relationship with the conseil de recherches? It's not just, “Take our resource.” How do you work with them?

As a final question, what's your relationship with the provinces and municipalities? How do you manage that?

[Dr. Sam Shaw]

With regard to how we manage it, we have an Encana Corporation person on the implementation committee of NRCan, we have one on the standards committee, and we have one on the education committee. We work with

Gaz Métro, in Quebec.

They are a great partner and ally in natural gas. We worked with the Province of B.C. to help them with a policy bringing in an incentive for natural gas vehicles. We're working with Alberta, and Alberta may be looking at an election soon. We do work with the provinces. We're working with Ontario.

The four big provinces are B.C., Alberta, Quebec, and Ontario right now. We are trying to do some work, at least on an educational basis, in New Brunskwick.

[Jim Facette]

Chair, thank you very much for the question.

Our relationship with the municipalities is actually pretty good in many areas across the country. We have an awful lot of people at the local level working with the municipalities on their various regulations and on implementation. Could it use some improvement and awareness? The answer is probably yes.

With the provinces, we're coming along quite nicely as a new association. We've met with 7 of the 10 jurisdictions. We've had established relationships in the industry going back on a technical level, and when you get beyond that, it's quite good. I was just in Quebec about two weeks ago meeting with the Ministry of Natural Resources there.

Our relationship with Natural Resources Canada, I would say, is in its infancy, to be honest. We need to do more work there. Our exclusion from the transportation road map may be a symbol of that. That said, it's also an opportunity.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you.

[The Chair, Conservative, Merv Tweed]

Please go ahead, Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you. I have a question for perhaps Mr. Poilièvre, if we can squeeze it in.

Mr. Shaw, you talked about payback in response to Mr. Poilièvre and Mr. Sullivan. That cost presumed, did it not, that there was a home pumping station? If one didn't have that and went to the downtown natural gas station—