Transport Committee on March 6th, 2012

[Olivia Chow, NDP, Trinity—Spadina, ON]

That's out of 1,600 or 2,000 trucks?

[Dr. Sam Shaw]

We don't have a very large fleet of our own because we have a lot of contractors, so I can't give you the total number of trucks we have. We have been looking at converting as many trucks as we can.

[Olivia Chow, NDP, Trinity—Spadina, ON]

What percentage do you think it would be? Give me a ballpark figure. It doesn't have to be 1,855.

[Dr. Sam Shaw]

I think we're hitting close to 30%.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Then do you have fewer than 2,000 trucks? What about your contractors?

[Dr. Sam Shaw]

We just signed a deal last year for Heckmann Water Resources. They've ordered 200 trucks that operate on LNG.

Part of the problem is the barrier in getting the engines out of Westport Innovations. There is one company in North America; it supplies those engines for Peterbilt, Kenworth, and so forth, and the list goes on, but there is one manufacturer.

[Olivia Chow, NDP, Trinity—Spadina, ON]

You have fewer than 1,000 trucks in total.

[Dr. Sam Shaw]

If you mean pickup trucks, yes.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Are there any other kinds of trucks that you're looking to convert?

[Dr. Sam Shaw]

No, we don't usually have big trucks.

[Olivia Chow, NDP, Trinity—Spadina, ON]

For the trucks you're using, which corridor do you use in order for them to refuel?

[Dr. Sam Shaw]

We typically look at our trucks that are located close to our operations, meaning Fort Nelson and Strathmore, and we're looking at Denver and Dallas. They're close to our operations.

[Olivia Chow, NDP, Trinity—Spadina, ON]

In Canada, how many trucks do you have on natural gas, and which corridor do they tend to use?

[Dr. Sam Shaw]

They don't do a corridor. They're close to operations. If our operations are in Fort Nelson, the trucks are in Fort Nelson. They don't travel, so they're typically return-to-base, out in the field. It's the same with Strathmore. They don't go through a corridor; they return to base in Strathmore.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Right.

If Toronto, for example, wants to order some natural gas buses, they would travel in a certain area that would require refuelling. It's always the refuelling that's the problem, isn't it?

[Dr. Sam Shaw]

We're working with a number of cities. Calgary is on stream for 200 transit buses. It's a case of putting the infrastructure in the barns, because it's return-to-base.

[Olivia Chow, NDP, Trinity—Spadina, ON]

What would be the combined operating cost, not just the capital cost? How much would the operating cost be to maintain the barn and then to maintain the natural gas buses? Do you have a ballpark figure?

[Dr. Sam Shaw]

I couldn't give you that. That would have to be a business case analysis, but I can tell you that there has been a lot of analysis done in California in looking at the difference between hybrid buses and natural gas vehicle buses, and typically it comes out that the total cost of ownership of natural gas transit buses is about $250,000 lower than the cost of hybrid buses.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Thank you.

Go ahead.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Currently, natural gas and propane consumers are exempt from the federal excise tax on fuel, which is 10¢ per litre. We know that an exemption from a tax is comparable to a subsidy for the industry, and treating various fuels differently can sometimes lead to distortions in the market or artificial demand for one product over another. Can you give us an indication of how demand for natural gas and propane use in the transportation sector is in any way dependent on this current tax exemption?

[Dr. Sam Shaw]

Let me start.

First of all, it's not dependent, because we don't have a product; as a result, the number of conversion vehicles in Canada, as I said, is minuscule compared to the worldwide number of natural gas vehicles.

Clearly, if you look at the jurisdictions—and I think that's one of the things NRCan will be looking at—in the U.S. you'll see state incentives and federal incentives. President Obama just brought up the fact that there will be incentives for natural gas vehicles. Also, there are incentives in Italy, and so forth. As in the U.S., that was really done to incent the conversion to natural gas for environmental reasons and to utilize domestic supply.

We don't have the excise tax drifting to consumer adoption right now. Ed was talking about how good the economics are, and that will come to the foreground once there are more OEM vehicles, so we would say you should not excise the transportation of natural gas or propane just yet, not until you get an industry.

What you're looking at trying to do is spawn a transportation industry that would spur development in manufacturing of natural gas vehicles, whether it's in Ontario or other provinces. That would be an incentive to the OEMs to start producing natural gas vehicles.

[The Chair, Conservative, Merv Tweed]

Thank you.

Just as a comment, we were recently in India. In New Delhi, the government there declared overnight that all of their small transportation vehicles would go to CNG. It gave them 30 days, and they met that requirement. It's interesting that the technology is probably there and it's just a matter of moving towards that kind of decision.

[Dr. Sam Shaw]

Mr. Chair, there are so many OEMs manufacturing transit buses now that it really has been the low-hanging fruit for a lot of jurisdictions, particularly in places like L.A.

[The Chair, Conservative, Merv Tweed]

Yes.

Go ahead, Mr. Poilievre.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Those were both great presentations.

Is home refuelling done anywhere?