Transport Committee on May 1st, 2012

[Russell Davies]

That doesn't make a lot of sense to me either.

[Ed Holder, Conservative, London West, ON]

In my own city of London—maybe they're wiser in Calgary, I hope not—that's the kind of thing you would hear. They would keep the buses running on a twenty-four-hour basis. So that's not true?

[David Pascoe]

I think it's a myth, but it may have stemmed from when trucks are left idling all night. They do that to generate energy for the sleeper cab.

[Ed Holder, Conservative, London West, ON]

It's for the heat.

[David Pascoe]

Yes. But it makes no sense to run a bus 24-7.

[Russell Davies]

Sometimes a bus will be run or left idling for a long time, particularly in cold weather, because starting it is an issue. That's all. Just firing them up in the morning can sometimes be problematic, and then sending them straight down to service as cold buses. So sometimes they need to be left idling. As far as that being more efficient, I can't say.

[Ed Holder, Conservative, London West, ON]

I think I heard you say it would not be untypical for the vehicles' motors to be running 50% of the time during the day.

[Russell Davies]

That's just stopped at traffic lights and transfer points, and those kinds of things.

[Ed Holder, Conservative, London West, ON]

One of the things we heard in previous testimony from AUTO21 is that one of the biggest factors in energy consumption, particularly with directives, was the size of the vehicle and obviously the weight. The weight is reduced very dramatically, as in by half.

For buses, what's the history of that from a weight standpoint? I appreciate size is what it is. We hear about the elongated ones and we even have those in London, Ontario, if you can imagine. They'll put on the little attachment, believe it or not. It's true. Has weight been one of the considerations, and how dramatic is that?

[Russell Davies]

The biggest issue with weight on a CNG bus is simply the fuel tank, as I'm sure you can imagine. You've seen the tanks. They're the full length of a 40-foot bus, more or less.

The technology in the construction of those fuel tanks has been improving significantly over the years, to the stage where now the tank is double-walled, but it is made of materials that are considerably lighter than those that were used probably even five years ago.

The overall weight of a 40-foot bus probably increases by about 1,000 pounds or so with a fully loaded fuel tank, compared to a fully loaded diesel bus. There are some weight penalties, but they're offset in terms of the efficiency of the engine and those kinds of things.

[Ed Holder, Conservative, London West, ON]

I think we've made it clear that you may have some provincial options if you're looking for loans and the like, if that's part of your direction. That certainly is your call.

One of the considerations we have is from a legislative standpoint. Not unlike the question asked of Mr. Pascoe, is there anything from the federal legislation standpoint that we might do to support the bus industry in this country? Are there impediments that you see?

[Russell Davies]

I'm not really aware of any impediments right now. It's more a lack of guidelines as much as anything else. I sound like a broken record, but there could be more incentives to be able to transition. It is an expensive deal to operate a fleet of 1,000 diesel buses, and to try to transition over is an expensive proposition.

[Ed Holder, Conservative, London West, ON]

I'm glad to say there are some options there as well.

[The Chair, Conservative, Merv Tweed]

I have to interrupt there.

Mr. Poilievre.

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

On the issue of incentives, the incentive would seem to be the price advantage that you described.

If there is a business case for this transformation, why would taxpayers need to help? If there is no business case, why would taxpayers want to help? Those are the questions I ask myself. I think we went through that debate in my first round of questioning.

I want to move on to the issue of the guidelines. The guidelines you're seeking for building codes and so on, they must be provincial or municipal, or are there federal rules that you need clarified?

[Russell Davies]

I think on the basis of an earlier discussion it sounds as though they may be provincial guidelines that we're looking for.

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

Okay.

The next question I have relates to electric vehicles. I'll quickly note that in Alberta, electric vehicles might actually be a less environmentally friendly option because of the mix of electrical sources. I don't know the exact numbers, but I know that a very large portion of Alberta's electricity is still coal fired. You'd have to burn coal in order to power the vehicle, which is much dirtier than burning natural gas.

On electric-powered vehicles generally, Israeli CEO Shai Agassi stated at the World Economic Forum that he wanted to create one country that didn't rely on oil for anything. He chose Israel.

He said that the solution for electric vehicles was to have battery swap stations. That is to say, even though there is not a lot of range with electrical vehicles, a car could pull into one of these swap stations and the battery could be changed in under two minutes and then be on its way. In effect, no one would actually own a battery; they would just pay for the use of batteries that they would swap in and out at these stations. Is that a viable option?

[David Pascoe]

I'm aware of his idea. I think one of the reasons he's looking at Israel is that the geographic size is a little more reasonable. That's why, if you were to take up the challenge, it might be an appropriate location.

With regard to swap stations, I don't think it has a good chance at all. The reason is that if you go to buy a car, the pile of parts on the floor for a smallish car is maybe $10,000. If it's electric, now the battery costs probably $10,000 to $12,000. So the cost to the car company, which they have to pass on, is now double. If you want to have battery swap stations, now you have to make a third battery to go to the swap station in case you need to make a swap, or at least a certain number of additional.

That capital cost, whether you own the battery or not, ultimately has to pass on to the consumer, because Shai Agassi is not in business to lose money, and neither are the car companies. You're going to end up paying for a car plus two batteries instead of a car plus one battery, if you have a recharging system. From an economic perspective, I can't see it working.

There's another thing with regard to deployment of batteries to swapping stations. On Super Bowl Sunday, for example, when everybody's moving from one part of the country to another, the first 40 guys come in and pick up their batteries, but the rest of the guys moving along in their electric cars, instead of being able to use their front-row Super Bowl tickets, were sitting in the swap stations, and now have to watch it on television. There were no extra batteries at the battery swap station.

Those types of things will cause problems, right?

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

On the home fuelling stations, are there any regulations that need to be changed? I suspect there aren't any regulations period, because it's a new concept. But is there anything at a federal level that we need to clarify on your behalf in order to allow an enterprise like yours, Magna, to construct and ultimately wholesale these home systems?

[David Pascoe]

I don't think there are impediments today, because there are, I believe, companies out there selling home fuelling systems today. You can buy them today. We're just looking at potentially entering that business.

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

How much do they cost?

[David Pascoe]

Today they're around $6,000. We see a route to getting it to one half to one quarter of that. Because the volume's low, ultimately it's—

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

Does that include installation?

[David Pascoe]

I'm not sure about that. I think probably not.

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

Are they mobile? If someone moves, can they bring their compressor with them to the next home they purchase?