Bill C-30 (39th Parliament, 1st Session) Committee on Feb. 20th, 2007

[The Chair, Conservative, Laurie Hawn]

Please give a short answer.

[Matthew Bramley]

The work to put it in place could begin immediately, as soon as the clear expectation of a sufficiently high carbon price is there.

[The Chair, Conservative, Laurie Hawn]

Thank you, Mr. Bramley.

Mr. Holland is next.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Thank you, Mr. Chair, and thank you to the witnesses.

My first question is to Mr. Bramley.

A question was posed around the effectiveness of Bill C-30, but you didn't get a chance to answer. Would it be fair to say at this point that Bill C-30 really represents a series of minor amendments to CEPA, and that the work of this committee, in your opinion, might be that we have to make substantive amendments if we're to put forward a real action plan for dealing with climate change?

[Matthew Bramley]

I'm certainly troubled by the fact that the federal government does not currently have a comprehensive climate change plan. It has made a series of isolated announcements that do not address all the key sources of emissions in Canada. Bill C-30, as it stands, is essentially a set of fairly technical amendments to existing legislation; it's certainly not a climate change plan.

By the way, a climate change plan would have to be much more than simply a bill. In fact, we know the government could act immediately using existing legislation, CEPA, if it wanted to move ahead immediately to put in place regulated greenhouse gas targets. Given there is this opportunity to amend Bill C-30 and make it stronger, I see that opportunity essentially as one of turning what is currently “government may” legislation into “government shall” legislation--in other words, to put in some requirements to give increased confidence to Canadians that the federal government will be obliged to put in place some of the elements one would expect to find in a credible climate change plan.

[Mark Holland, Liberal, Ajax—Pickering, ON]

You spoke to the ability of the oil sands to achieve the Kyoto targets within the Kyoto period—by 2012, that is. It certainly has been said, and I know your organization has said, that over 50% of the growth in greenhouse gas emissions would come from the oil sands on a business-as-usual model. The type of growth contemplated by the government is upwards of, say, five times the current production of the oil sands by 2015; if that kind of growth were to occur, emissions would obviously be much more severe, yet the Pembina Institute put out a recommendation of carbon neutrality by 2020. I'm wondering if you could comment on how that would be achieved.

[Matthew Bramley]

In our analysis of how that sector could become carbon neutral by 2020, we considered a number of scenarios that combined purchasing offsets—in other words, financing emission reductions elsewhere to offset the industry's emissions—with deployment of carbon capture and storage at various different levels. I don't have the exact range of results in front of me, but to achieve that target, the middle range of the numbers was in the low single figures of dollars per barrel of oil.

[Mark Holland, Liberal, Ajax—Pickering, ON]

On the clean development mechanism and international trading of credits—perhaps we could hear from all the witnesses on this—I seem to get concurrence that a preference is to reduce emissions domestically, but that all options need to be utilized.

Would you speak as well to the ability, through using the clean development mechanism or other methods of international trading credits, to promote Canadian technology and utilization of Canadian technology and to assist, perhaps, with some of our foreign aid development goals?

[Matthew Bramley]

First and foremost, investing in real emission reductions in developing countries through the CDM is a perfectly legitimate way to take responsibility for emission reductions that are not achievable, in the very immediate timeframe, within Canada. It has a positive benefit on protecting Canada from climate change, because as we understand, emission reductions protect Canada from climate change wherever they take place.

There is no doubt that it's an opportunity also to export Canadian technologies. Unfortunately, currently only about 12 projects out of some 500 registered CDM projects have any Canadian involvement. This is a consequence of the lack of sufficient progress towards putting in place regulated targets for industrial emitters in Canada.

But I would agree with you as well that we should look at the CDM as a kind of specially targeted form of foreign aid, targeting investments that help Canada's environment but that also help developing countries get access to much-needed resources to get onto a more sustainable development path.

[The Chair, Conservative, Laurie Hawn]

I would ask the other two witnesses to be really brief, if you would.

[Michael Cleland]

I agree that the CDM mechanism is a good idea and that it's an important part of the Kyoto framework, but it's a part. The transaction costs for CDM projects are high, including a lot of senior executive time to actually pull them off. Hopefully that will come down over time.

The other thing is that unless the investment is close to their core business, it's hard for a lot of businesses to say that's where they should go. Your core business is your production process, your marketing process. For some businesses it's a natural; for others it would be quite a stretch.

[Gordon Lambert]

The dilemma we have as a company is that the CDM is an important instrument, and we see it as a part of the tool box, but it's actually an easy way to go forward, as opposed to doing the heavy lifting required to develop the new technologies we've been chatting about today. It's a case of what the best long-term answer is. We believe it is going to be developing and deploying new technologies, and not using CDM as a substitute for them.

[The Chair, Conservative, Laurie Hawn]

We're going to Mr. Jean, but before we do, I'll just remind folks that the topic today is large industry, oil and gas; it's not tools. It might be argued that CDM is a tool, so we'll just try to refocus a little bit.

Mr. Jean, you have five minutes, please.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Let me make a point of order, if I could, just on that point.

It would be a tool used by oil and gas in this instance. Oil and gas was commenting on how they might use that tool to meet the reduction target, so I think it is extremely pertinent, and I was happy to hear from the industry in terms of—

[The Chair, Conservative, Laurie Hawn]

I understand. Let's just make sure that everything is related, one way or the other, to large industry, oil and gas.

[Mark Holland, Liberal, Ajax—Pickering, ON]

How is that not related?

[The Chair, Conservative, Laurie Hawn]

I'm not going to get into an argument with you, Mr. Holland. As I've done in the past, I'm trying to keep people focused on the topic of the day, knowing there is going to be some variance in it. We have been very lenient and will continue to be. This is just a reminder that the primary topic of the day is oil and gas. CDM can be part of it, but it's just a part.

Mr. Jean has five minutes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thanks, Mr. Chair.

Did Mr. Holland cut into my time at all?

[The Chair, Conservative, Laurie Hawn]

You have five minutes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Excellent.

I want to ask Mr. Lambert a couple of questions.

Mr. Lambert, your company, Suncor, started in northern Alberta in 1965. Is that correct? Was it sometime around then?

[Gordon Lambert]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

We listened to Mr. Bramley say that oil sands can't be moved to another country; that we have control of the oil sands and can't really move the production to another country. But oil is internationally traded, and the price is based on a world market. Is that correct?

[Gordon Lambert]

Yes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

What is the range in cost per barrel of the oil sands in today's dollar? What does it cost to produce a barrel of oil today?

[Gordon Lambert]

In the ballpark of $20 to $30 a barrel.