Oil Tanker Moratorium Act

An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast

Sponsor

Marc Garneau  Liberal

Status

Second reading (Senate), as of June 5, 2018

Subscribe to a feed (what's a feed?) of speeches and votes in the House related to Bill C-48.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment enacts the Oil Tanker Moratorium Act, which prohibits oil tankers that are carrying more than 12 500 metric tons of crude oil or persistent oil as cargo from stopping, or unloading crude oil or persistent oil, at ports or marine installations located along British Columbia’s north coast from the northern tip of Vancouver Island to the Alaska border. The Act prohibits loading if it would result in the oil tanker carrying more than 12 500 metric tons of those oils as cargo.

The Act also prohibits vessels and persons from transporting crude oil or persistent oil between oil tankers and those ports or marine installations for the purpose of aiding the oil tanker to circumvent the prohibitions on oil tankers.

Finally, the Act establishes an administration and enforcement regime that includes requirements to provide information and to follow directions and that provides for penalties of up to a maximum of five million dollars.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

May 8, 2018 Passed 3rd reading and adoption of Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast
May 1, 2018 Passed Concurrence at report stage of Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast
May 1, 2018 Failed Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast (report stage amendment)
Oct. 4, 2017 Passed 2nd reading of Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast
Oct. 4, 2017 Passed Time allocation for Bill C-48, An Act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast

October 31st, 2017 / 4:20 p.m.
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Liberal

Angelo Iacono Liberal Alfred-Pellan, QC

Now I have a question for the West Coast Environmental Law Association representative.

In an open letter, your organization expressed support for Bill C-48. You also, however, questioned the 12,500-tonne threshold.

Could you comment on that and provide any recommendations you have?

October 31st, 2017 / 4:15 p.m.
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Campaigns Director, Sierra Club of British Columbia

Caitlyn Vernon

I can speak to that again.

The Great Bear Rainforest is the world's largest intact coastal temperate rainforest. The agreements that have been formed between first nations, industry, government, and environmental groups have been recognized globally. We don't need industrial sacrifices to support our economy; we can find ways for communities to thrive and prosper within ecological limits. All of these agreements that have been recognized, that have been signed, depend on a healthy marine environment. The salmon literally provides food for the trees. The bears depend on the salmon. The edge between land and sea is permeated; it's not a firm boundary. Everything depends on everything else, and so the integrity of the ecosystems of the Great Bear Rainforest, which is truly a global treasure, depend on a healthy ocean and depend on bills such as Bill C-48, and I would argue even more strongly, on prohibiting refined oils and articulated tug barges like the Nathan E. Stewart which also have an impact on the rainforest.

I don't know if either of you wants to say something else.

October 31st, 2017 / 3:50 p.m.
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Gavin Smith Staff Counsel, West Coast Environmental Law Association

Thank you, Madam Chair. Thank you for the opportunity to speak before the committee.

The West Coast Environmental Law Association also strongly supports Bill C-48, the oil tanker moratorium act. We've prepared a written brief, which I understand has yet to be translated. In that brief, we make a number of points, but I'm going to focus particularly on one of those right now, which is the clause 6 exemption provision that allows the minister to exempt oil tankers from the bill's prohibitions.

However, I will note that in our written brief we also address issues such as a recommendation to create a regulation-making power for appropriate public disclosure of monitoring enforcement information under the bill, as well as a recommendation about seeking further information from Transport Canada on the 12,500-tonne threshold when the oil supply study that Ms. Vernon mentioned indicated that supplies to communities are currently in the amount of approximately 3,200 tonnes.

I'm happy to answer questions on those, but I will focus on clause 6 and in particular recommend three amendments to clause 6, which we say would preserve its sensible purpose of allowing for the provision of necessary oil supplies during dire emergencies while adding three crucial safeguards to protect the purpose of the bill and the public's access to information, each of which I'll address in turn.

First, we recommend that clause 6 explicitly limit the use of the exemption provision to circumstances that, in the opinion of the minister, constitute an emergency. Currently under clause 6, the minister may issue oil tanker exemptions for any reason that the minister believes to be in the public interest or essential for community and industry resupply. The exemption provision is not limited to emergencies, and it could be used to grant oil tanker exemptions for other purposes, including those potentially contrary to the purpose of the bill.

Minister Garneau has been very clear before this committee and in the House that the purpose of the exemption provision is solely and exclusively to respond to dire emergencies. We say that the clause 6 exemption provisions should reflect that in order to ensure that the provision is not used for other purposes.

Second, we recommend imposing an expiry period for oil tanker exemption orders under clause 6 with ministerial authority to order extensions as necessary. We propose an expiry period of one year for oil tanker exemption orders and orders to extend them, although we note there's no magic in that number provided there is an expiry period of a relatively short term.

Currently under clause 6, the minister may order oil tanker exemptions for any period of time without restriction, including potentially long-term or even indefinite exemptions. We say that setting a default term for oil tanker exemption orders would greatly curtail potential use of the exemption provision for long-term objectives that are incompatible with the bill's purpose, and also reflect the reality that, in general, emergencies are not likely to require long-term oil tanker exemptions. At the same time, the ability to order extensions of those orders would provide flexibility to maintain exemptions for longer periods where required.

Third, we recommend adding a simple requirement that oil tanker exemption orders be published in the Canada Gazette. Currently, legal requirements for public notice of access to exemption orders are explicitly removed by subclause 6(2) of Bill C-48. That is because the Statutory Instruments Act and its regulations generally require publication of statutory instruments in the Canada Gazette and provide for public access to and the right to copy statutory instruments.

However, those provisions would not apply to an oil tanker exemption order under the bill, because subclause 6(2) says the Statutory Instruments Act does not apply. The apparent rationale is to ensure that exemption orders can enter into effect quickly with a minimum of procedural requirements during an emergency. We don't propose disturbing that approach. Rather, we simply recommend adding a requirement to publish the orders in the Canada Gazette to ensure that the public has proper notice of such exemptions.

In summary, the clause 6 exemption provision could, if used to its full extent as currently drafted, allow wide-ranging and long-term exemptions from the bill's oil tanker prohibitions to be ordered behind closed doors without appropriate public review, potentially gutting the very purpose of the oil tanker moratorium act. We fully understand that this is not the minister's intention. He has been very clear on that point. However, given that, as the minister stated to this committee, the purpose of the bill is to preserve the pristine north coast for posterity, we say, then, that the bill's provisions must stand the test of time. This requires firm prohibitions that cannot be easily circumvented in future through the use of a broad exemption power.

The three amendments that we propose to section 6 would achieve this goal, providing ample flexibility for oil tanker exemptions when necessary, during emergencies, while eliminating uncertainty about whether the exemption provision could, in future, be used for purposes other than that, and potentially those contrary to the spirit of the bill.

Thank you.

October 31st, 2017 / 3:45 p.m.
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Caitlyn Vernon Campaigns Director, Sierra Club of British Columbia

Thank you for the opportunity to speak to Bill C-48.

Sierra Club BC strongly supports this oil tanker moratorium act. However, to truly protect the coast and all who depend on it, we believe the bill needs to be strengthened in four key ways, outlined in our written brief, which I am told you will be getting very shortly: limiting the ministerial exemption to emergency circumstances; including refined oil under the scope of the bill; decreasing the tonnage threshold to 3,200 tonnes, which, according to a recent Transport Canada report, is the maximum needed for community fuel supply; and expanding the geographic scope to prohibit vessels above 3,200 tonnes from transporting crude or refined oil through Hecate Strait, Dixon Entrance, and Queen Charlotte Sound.

We believe these amendments are necessary, because oil spill cleanup is effectively impossible, and because B.C.'s north coast, the Great Bear Rainforest, is a unique and special place, truly a global treasure worth protecting.

Some years ago, I was invited to a feast at the Gitga’at Nation in Hartley Bay. The table in the big house was loaded with food from the ocean, food you can't find in a grocery store: smoked eulachon, sea cucumbers, and sea lion. The seaweed was particularly good, so I asked around to see if I could buy some to take home. The next morning, a woman came up to me and gifted me a big bag of seaweed; she wouldn't let me pay. In return, she said, I could help them stop the tankers.

It's difficult to overemphasize how the narrow waterways of the north coast are the breadbasket, livelihood, and culture to coastal communities. This is a place where you can watch a spirit bear catch a salmon, catch a whiff of a sea lion colony, and come eye to eye with the coastal wolves that eat seafood. Even on land, the globally recognized Great Bear Rainforest depends on a healthy ocean. The bears eat barnacles, and the trees actually grow bigger in years with good salmon runs. There is nowhere else on earth like it, so we commend the government for introducing Bill C-48.

This bill is an important step in preventing oil spills. In the case of a spill, what industry considers a success—10% to 15% recovery in accessible locations in good weather—is really a disaster for the communities and ecosystems left behind. While improving our spill response capacity is a good thing, having a bigger mop doesn't actually prevent the spills from happening in the first place.

In October of last year, the Nathan E. Stewart ran aground in Heiltsuk territory. This was an articulated tug barge that transported petroleum products between Washington state and Alaska. Fortunately, the fuel barge was empty. Even so, the sinking of the tug spilled over 100,000 litres of diesel, contaminating important harvesting and cultural sites. The response was slow, uncoordinated, and completely ineffectual for the conditions. Booms broke, and waves crashed over the booms. Fisheries are still closed. The Nathan E. Stewart provides a sobering reminder of the challenges of spill response in remote locations, and that social, economic, and environmental impacts can be very severe from even a relatively small spill of refined oil products. Note that I am not talking about just crude oil or persistent oil, but also the impacts of refined oil spills.

There are two refineries undergoing environmental assessment in northern B.C. that would result in supertankers carrying refined oil. These non-persistent oils are acutely toxic to marine organisms. The risk of an oil spill was a key motivating factor in why so many municipalities, first nations, unions, regional districts, businesses, and individuals over the years spoke out against Enbridge's Northern Gateway proposal, and why coastal first nations have declared a ban on tankers in their territories.

This government has broad-based public support for a tanker ban. However, the expectation is that the bill prohibit all tankers, not just some tankers. As I have outlined, this can be done through amendments that continue to allow for community fuel supply while prohibiting articulated tug barges, as well as tankers, from carrying refined oil.

While Bill C-48 focuses on the north coast, it must be mentioned that oil tankers also pose a huge risk to the communities, the economy, and the wildlife on the south coast of B.C., and that LNG tankers are a safety hazard. True coastal protection would ban oil and gas tankers, both north and south. Then, instead of investing in spill response, we could support the wild salmon economy and expand renewable energy production that could generate jobs without damaging our climate or putting our coast at risk of spills.

Thank you.

October 31st, 2017 / 3:40 p.m.
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Liberal

The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)) Liberal Judy Sgro

I bring to order the meeting of the Standing Committee on Transport, Infrastructure and Communities in this 42nd Parliament. Pursuant to the order of reference of Wednesday, October 4, 2017, we are looking at Bill C-48, an act respecting the regulation of vessels that transport crude oil or persistent oil to or from ports or marine installations located along British Columbia's north coast—its beautiful north coast.

Thank you very much to our witnesses.

We will start with Friends of Wild Salmon.

Mr. Nobels.

October 26th, 2017 / 5:20 p.m.
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Conservative

Ben Lobb Conservative Huron—Bruce, ON

I know it's your position that you would be outside the schedule and therefore exempt from Bill C-48, so maybe you don't want to say this right now, but inside the bill, is there any issue with how you would actually prove that you shouldn't be put in the schedule?

I know the minister made comments back in February when you made this announcement, that they were still working on the criteria regarding how that would be done. Has there been any discussion since February on how you would be able to prove out this product so you wouldn't find yourself on the schedule?

October 26th, 2017 / 5:15 p.m.
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Liberal

Vance Badawey Liberal Niagara Centre, ON

Thank you, Madam Chair.

First, I want to give some clarification to some comments that Mr. Chong made earlier with respect to Bill C-48 and dealing with disputed marine borders. Bill C-48, just to be clear, does not deal with disputed marine borders. It's a land-based moratorium. I think that was made clear at the last meeting.

I do want to congratulate CN for taking a forward-looking approach, for looking at not just the moratorium we're dealing with and, of course, the possibility of it then moving forward, but also at taking it steps further than that and coming up with new products and new approaches to the impact of this moratorium.

October 26th, 2017 / 5 p.m.
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Conservative

Michael Chong Conservative Wellington—Halton Hills, ON

Thank you, Madam Chair.

If you will permit, I'd like to split my time with Madam Block. I have a comment. I don't have a question.

My comment concerns the international aspect of this bill, which I don't think any of our witnesses have talked about, so I want to put this on the record. Bill C-48 concerns boundary waters for which we are in dispute with the United States. It involves the disputed waters around the Alaska Panhandle and also the waters around the Dixon Entrance, as well as issues concerning innocent passage, freedom of navigation, and the like.

The United States is not a party to UNCLOS, the UN Convention on the Law of the Sea, and it's also a global maritime policing power, through the U.S. Navy, that has always been very clear about its determination to protect flag rights. Since the 1890s Canada has claimed these waters, both Dixon Entrance and Hecate Strait, believing they're internal to Canada. That's a position I support, but the U.S. doesn't recognize our sovereignty here.

As I understand it, the Government of Canada's foreign policy priority right now is protecting NAFTA, and I believe the Government of Canada should have a whole-of-government approach in ensuring that every resource of the Government of Canada is used to fighting for and protecting NAFTA, which is so vital to the approximately one-fifth of the Canadian economy that relies on trade exports to the United States. One of the things I have a concern about with this legislation is that it potentially will provoke the Trump administration while at the same time we're trying to get their attention and their support for the protection of Canadian jobs and Canadian interests in NAFTA. In that context, I think it's important for us, as members of Parliament, to put this on the record.

I think this is not well timed, and I don't believe it fits into what I believe should be a whole-of-government strategy to focusing every aspect, every department, every minister, and every part of the Government of Canada on the single biggest need, which is to protect our interests in NAFTA and to ensure that we can convince the Trump administration to come around to our point of view.

October 26th, 2017 / 4:55 p.m.
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Greg D'Avignon President and Chief Executive Officer, Business Council of British Columbia

Thank you, Madam Chair.

Thank you, standing committee, for the invitation to present today.

My name is Greg D'Avignon, and I am the CEO of the Business Council of British Columbia. We are in our 51st year. We are an organization of 260 firms that have assets and operations in the province, including leading firms in every sector of the economy, including our post-secondary institutions.

My comments today are really reflective of two key areas. One is related to the context of global and domestic energy demand and innovation and the role that Canada can play in meeting our obligations from an environmental and marine protection perspective. The other has to do with seizing the opportunity to export Canadian products to the benefit of the economy and the peoples of British Columbia and Canada.

These objectives were articulated in a submission in September 2016, but they bear repeating for the committee today. As the committee is aware, the International Energy Agency in its latest report showed that the global demand for hydrocarbons continues to grow and is projected to grow by one-third until 2040. Energy demand will be satisfied by a global mix of energy products, including renewables, but for decades to come it will involve primarily energy sources based on fossil fuels.

Canada, in our view, can choose to shut itself off from this demand and these market realities and forgo the benefits, including investment, taxes, jobs, and innovation that flow from our energy sector, which comprises today 10% of our GDP and most recently up to 25% of the capital investment in Canada as a whole, or we can choose to participate by contributing lower-greenhouse-intensive oil and natural gas products based on our baseline approach and innovations, as you heard about a moment ago, and drive change globally through a Canadian impact.

This is a unique proposition, particularly in British Columbia where we have the ability and today are integrating electrification in the upstream and downstream natural gas and oil production. These efforts are reducing by as much as half the carbon intensity of a barrel of oil, compared with the average in the U.S. The irony is that Canada today imports over 400,000 barrels of U.S. oil, while landlocking our Canadian product.

Canada's high environmental standards play a role in this, and Bill C-48 helps to strengthen it. Frankly, however, we have concerns with respect to our ability as the fourth-largest oil producer in the world, and given the innovations in electrification taking place in the market, to actually take advantage of the opportunities we have. The legislation in its persistence levels and schedule preclude both the innovations around the CanaPux, which we heard about earlier, and the opportunities that will arise out of natural gas production, which will include the production of light tight oil, condensate, and methane.

The British Columbia Business Council's concern is that the public narrative has not actually captured the voices of all indigenous peoples either. While many indigenous communities have the right to oppose the ability to ship, particularly diluted bitumen, from their traditional territories, the committee has heard from a great number who would like to seize those opportunities in environmental, traditional, and sustainable manners. This includes the supply chain through British Columbia, Alberta, and Saskatchewan.

Ironically, the oil industry and the energy sector in Canada is among the highest employers of indigenous peoples, creating self-determination, financial independence, and jobs for the future of those communities.

The opportunity for us in Canada is to seize these markets, to build on our innovation, to drive down the carbon intensity of our products, and, most importantly, to make sure that we create economic and cultural opportunities for all Canadians through the energy abundance we enjoy in Canada.

I'll conclude with some suggestions. While we are not in support of Bill C-48, we recognize the government's interest in moving forward with the legislation. Therefore, we would suggest the following. First, despite our views on the potential negative and unintended consequences of the legislation, permitting the export of products of less concern and less persistence than diluted bitumen through our northern deepwater ports must be recognized. Initially, the conversation on this legislation started around diluted bitumen, and, unfortunately, it has captured a much broader array of products and opportunities than was originally envisaged.

Second, reviews within the next 12 months of the legislation being passed and seeking royal assent should focus on the persistence level of products aimed at increasing the precision of in-out definitions, particularly given the Canadian Energy Pipeline Association's independent study on this topic, which is targeted for completion in 2018.

Third, the technology developments and other response capabilities should be reviewed within 24 months of royal assent of the legislation, particularly through the oceans protection plan and some innovations we heard about earlier, such as the CanaPux, to see whether the legislation continues to remain relevant.

October 26th, 2017 / 4:45 p.m.
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President and Chief Executive Officer, Ocean Networks Canada

Kathryn Moran

My main point is that Bill C-48 doesn't change anything that's now existing in terms of our tanker traffic on the coast. It doesn't impact the small communities in terms of needing oil, but we do see significant traffic of car carriers and cargo. Those are the ones that are most at risk.

October 26th, 2017 / 4:40 p.m.
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President and Chief Executive Officer, Ocean Networks Canada

Kathryn Moran

I thought I'd bring the ocean to you since you're talking about the ocean.

I'm appearing today representing Ocean Networks Canada. I'm the president and CEO. I've been in this position for five years. Prior to coming to Victoria, I served for two years in the U.S. as an assistant director in the White House Office of Science and Technology Policy, serving under President Obama's science adviser, John Holdren. During my secondment there, I was selected to be on Secretary of Energy Steven Chu's eight-member science team that oversaw shutting down the flow of oil from the Deepwater Horizon.

At Ocean Networks Canada, I lead an exceptional team that operates the world's leading ocean observing systems. Ocean Networks Canada delivers the Internet-connected ocean by observing and monitoring primarily the west coast but also assets on the east coast and in the Arctic. These are observatories that continuously gather data in real time for scientific research, but they are also important in helping communities and managers make decisions and, for example, in informing decisions such as those you're making today with regard to Bill C-48. These decisions are really important to protecting the ocean now and in the future.

The locations, as you know well, that would be most impacted by an oil spill accident are our oceans and coastlines. At best, coastal oil spill cleanup tools recover less than 10%, sometimes up to 15%, of the oil spilled, which everyone agrees is a pretty dismal record. These facts alone provide support for the intention of Bill C-48.

Seven years ago, the blowout in BP's Deepwater Horizon opened up that spouting spigot of oil into the Gulf of Mexico, marking the beginning of the world's second-largest oil spill. We all watched oil spew from the spigot on 24-7 cable news. I was watching it as we were trying to shut it down. That lasted for months, with feelings of both aversion and shame. After months of work, the spigot was shut, but not before almost five million gallons were spilled. Now, this is totally different from what we're talking about here in terms of tankers, but just bear with me as I talk about these other accidents.

Over 20 years earlier, the Exxon Valdez spilled 42 million litres of crude oil in offshore Alaska, which remains today one of the most devastating spills because of its remote location, the type of oil spilled, and the negative impact on the area's rich biodiversity. Most coastal waters in B.C. resemble those in Alaska where the Exxon Valdez spill occurred. They are remote, the waters are relatively cold, slowing down the breakdown of crude oil, and they consist of many narrow inlets and channels characterized by large tidal ranges and strong tidal currents. These waters are similar to those in B.C. that are home to seabirds; salmon, and other harvestable fish species; sea otters; seals; and resident migrating whales, most notably gray, humpback that are increasing in numbers, and both orca and transient orca whales.

To pause there for a moment, in response to the Exxon Valdez, the tanker industry has done considerable work in reducing accidents with tanker spills, which I'm sure you've heard from other people appearing before you. There were many lessons learned from the Exxon Valdez, which have reduced the risk of tankers going aground in these kinds of waters.

Let me talk about, most recently, the tug Nathan. E. Stewart, which foundered and sank along the rocky coast of B.C. Although the fuel barge it was powering was empty, the tug itself carried 220,000 litres of diesel fuel, and thousands of litres of petroleum-based lubricants. The result is that the pristine coastline and the Heiltsuk First Nation have been negatively impacted, and that impact is still being assessed. We don't know the full impact of that, but certainly the first nation is claiming that there was a significant negative impact.

How could these accidents have happened? When I worked on the BP accident, I was stunned at how the oil industry assured us—as they do today—that their technology advances allowed for safe development and transportation of oil and gas even in the most challenging environments. The simple answer is that each of these disasters was caused by a combination of human error, weak regulations, and a paucity of oversight that relies on robust monitoring.

I think Bill C-48 begins to strengthen the regulation gap and is a positive move forward. It supports, perhaps for the first time, Canada's use of the precautionary principle outlined in the London 1996 protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter.

Ocean Networks Canada recently completed—

October 26th, 2017 / 4:35 p.m.
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Janet Drysdale Vice-President, Corporate Development and Sustainability, Canadian National Railway Company

Good afternoon.

My name is Janet Drysdale, and I am vice-president of corporate development and sustainability at CN. I am making this opening statement on behalf of both CN and our research partner InnoTech Alberta, which is represented via teleconference by managing director Ross Chow. We appreciate the opportunity to appear today to add our perspective to your study of Bill C-48.

CN is the only railway that services the ports on the north coast of British Columbia. The Port of Prince Rupert is an important and rapidly growing part of CN's network, and over the past 10 years it has become a key gateway for Asian goods moving to the North American market. In addition, we serve the port of Kitimat, also on the B.C. north coast.

CN currently moves intermodal traffic, coal, grain, wood pellets, and lumber through terminals at Prince Rupert, and we are in active discussions with customers interested in moving a variety of other export products through the port. We also operate a rail barge service out of Prince Rupert, which serves the Alaska Panhandle. CN does not currently move any product to the B.C. north coast for export that would be affected by the provisions of Bill C-48.

For the past three years CN has been working with InnoTech Alberta to develop a process to solidify bitumen. InnoTech is part of the Province of Alberta's research and innovation effort and is an industry-leading expert in the fields of energy and the environment. Together, CN and InnoTech looked at many different ways to solidify the entire barrel of bitumen, with no refining involved. Frankly, nothing worked.

However, in reviewing the numerous methods we tested, we realized that if we combined several processes, we could create the solid, transportable product we were seeking. Through this research, we have now developed a patent-pending process to successfully solidify bitumen.

The process involves adding polymers to the bitumen to form a stable core and then creating a polymer shell around the bitumen-polymer blend, enabling us to create something that loosely resembles a hockey puck. Importantly, the bitumen-polymer blend is easily separated back into its bitumen and polymer components. The process does not degrade the bitumen, and the separated polymer can be subsequently recycled or reused in the solidification process. We have named the product “CanaPux”.

The key point for this committee is that CanaPux will not require tank cars for movement by rail, and the product will not move in ocean tankers to end markets. CanaPux will be transported much as are any other dry bulk products, such as coal and potash, in gondola cars on the railway and in the hull of general bulk cargo ships. At ports, CanaPux could be transported to ships utilizing existing bulk-loading infrastructure.

From a safety and economic point of view, CanaPux do not require diluent in order to be moved. As I am sure you are aware, diluent—or condensate, as it was referred to earlier—is a lighter, more volatile petroleum product used to dilute bitumen in order to make it easier to move in pipelines.

Unlike pure bitumen, the inclusion of the polymer ensures that CanaPux float in water, making recovery in the case of a marine spill straightforward. I do have a sample with me, if anyone is interested in looking.

To date, we have successfully proven the chemistry and the concept of CanaPux. In addition, we continue to work with InnoTech on scientifically confirming the environmental aspects, including its fate in the environment, as well as the GHG life cycle.

Of course, we also need to demonstrate the commercial viability. In other words, we need to show that we can create CanaPux at high speed and high volume. This is essentially a straightforward manufacturing question, and CN is currently leading the development of a pilot project that will answer that question. The pilot will allow us to demonstrate the technology to interested producers and global refiners. It will also allow us to quantify the actual costs involved and will create scalable engineering work that can be used to commercialize the technology.

We believe the pilot will demonstrate that CanaPux is a safe and competitive way to move bitumen from western Canada to offshore markets.

We briefed various officials from numerous departments in the federal, Alberta, and British Columbia governments before moving forward with the patent process.

Given that CanaPux would move in freighters rather than tankers, it is our understanding that the movement would be permissible under Bill C-48, thereby allowing the safe movement of bitumen while extending market options for Canadian producers. We believe that, given the environmental properties of CanaPux, this is appropriate.

Environmental protection of our coastlines is extremely important. Market access for Canada's rich natural resources, which provide economic opportunity for all Canadians, needs to be balanced with that protection.

CN and InnoTech are very proud to have taken the lead in the development of CanaPux. We believe that the safety and environmental benefits of the product will be of great benefit to Canadians.

We thank you for the opportunity to comment.

October 26th, 2017 / 4:30 p.m.
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Liberal

The Chair Liberal Judy Sgro

Thank you very much, Ms. Block.

To our witnesses, thank you very much for helping us out today as we continue on with our study of Bill C-48.

We will suspend while we switch our video conference folks around and our witnesses.

October 26th, 2017 / 4:25 p.m.
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Conservative

Kelly Block Conservative Carlton Trail—Eagle Creek, SK

Thank you very much, Madam Chair.

I'd like to thank all of our witnesses for joining us today.

I don't have as much time as my other colleagues did, so I'll get right to the point. Given that this bill, Bill C-48, as was discussed in our last meeting and confirmed by departmental officials, does nothing to change the voluntary agreement that was put in place in 1985, and given that this current government has killed the northern gateway pipeline project, do you believe there is a pressing need for Bill C-48 today?

This is to either Ms. Brown or Mr. Bloomer.

October 26th, 2017 / 3:40 p.m.
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Chris Bloomer President and Chief Executive Officer, Canadian Energy Pipeline Association

Good afternoon. Thanks very much for the opportunity to speak with you today.

I'm Chris Bloomer, president and CEO of CEPA, the Canadian Energy Pipeline Association. We represent Canada's 11 major transmission pipeline companies. We transport 97% of Canada's natural gas and crude oil production. Our members have delivered oil and gas products with a 99.99% safety record for over a decade, a record we consistently improve through collaborative initiatives such as our integrity first program.

Our members are committed to public accountability, environmental stewardship, transparency, and continuous operational improvements through the application of management systems and evidence-based practices. We're global leaders in pipeline operations, technology, and innovation.

Although the approval of two pipelines by the federal government was a positive step for Canada, the cumulative effects of the many policy and legislative changes that directly and indirectly impact our industry are of deep concern and will determine whether or not we will be competitive in the future. This includes, but is not limited to, the potential for a complete overhaul of the system regulating and assessing major projects for interprovincial pipelines, the extent of proposed methane emissions reductions regulations, ambiguity about how indigenous people will be included within regulatory frameworks, and the fact that even recently approved pipelines are subject to further reviews and additional consultation requirements.

The proposed oil tanker moratorium act, Bill C-48, is yet another change that will compound uncertainty and negatively impact investor confidence in Canada. In his mandate letter, the Minister of Natural Resources was directed by the Prime Minister to introduce “new, fair processes” that will ensure that decisions for energy projects “are based on science, facts, and evidence, and serve the public’s interest”. This is the foundation from which we reasonably expect the government to legislate on critical matters of national importance like market access.

If passed, Bill C-48 will ban the shipping of crude oil to or from ports located on the northern British Columbia coast, restricting market access for one of Canada's high-value resources. This is perplexing given that Canada currently imports approximately 400,000 barrels a day of foreign oil into our eastern ports. CEPA strongly believes that, given the profound impact of this bill, more thought must be given to scientific analysis and achieving a broader consensus. Currently, Bill C-48 does not do this, despite claims to the contrary. Bill C-48 appears rushed, and CEPA is concerned about its content and disregard of Canada's world leadership on maritime safety.

For example, the low-carbon condensate from the Duvernay and Montney plays are of great economic and environmental significance and contribute to the government's strategic goals for wealth and job creation. However, Bill C-48 is unclear on whether they could be included in the definitions for banned oil products. The lack of clarity on this is alarming, especially given the inherent global opportunities that condensate represents for Canada.

Canada's history with marine oil transportation also contradicts the need for this bill. A 2014 Transport Canada report noted that, between 1988 and 2011, significant work by the government had improved the protection of marine safety. Since the mid-1990s, Canada has not experienced a single major spill from oil tankers or other vessels in national waters on either coast.

Additionally, this government has announced $1.5 billion in funding for a national oceans protection plan to strengthen Canada's leadership as a world leader in marine safety. It is fair to ask the question: what are the safety gaps this moratorium is supposed to restore?

In conclusion, the consequences of potentially drastic policy changes for future energy projects have instilled uncertainty within the regulatory system, adding additional risks, costs, and delays for a sector that the Prime Minister publicly acknowledged has built Canada's prosperity and directly employs more than 270,000 Canadians.

The approach to policy-making represented by the development of Bill C-48 contributes to this uncertainty and erodes Canada's competitiveness.

Thank you.