Bill C-30 (39th Parliament, 1st Session) Committee on Feb. 27th, 2007

[David McGuinty, Liberal, Ottawa South, ON]

So if I were to line up in this room 40 economists, Mr. Keith, how many of them would agree with your assessment? Would Dr. Jaccard agree with your assessment? Would Nancy Olewiler agree with your assessment?

[Dr. David Keith]

Dr. Jaccard would precisely agree with my assessment. I think the issue, though, is that in a theoretical sense you can prove at the level of a textbook economics paper that taxes and cap and trade can look almost the same; the issue is the details and political issues of real implementation. So, yes, Jaccard favours a tax, just as I do, but there's no question you could make cap and trade work.

Now, you also asked about international markets. I think there are really quite deep flaws in some of the international markets, especially the CDM market. I think there are reasons why we should focus particularly on cutting emissions at home in the developed countries. Only after we do that does it make sense to seriously think about, say, engaging China or India.

Essentially, we can go to all the international meetings we like, but until the rich world begins to actually cut emissions, the Chinese will just see us moving our lips. Only once we've really begun to cut emissions domestically does it make any sense to try to have a larger engagement.

Kyoto, in many senses, was an attempt to run before we were walking.

[David McGuinty, Liberal, Ottawa South, ON]

Let me go to the science, then, of carbon capture and sequestration. David Suzuki said the other day in a speech that I attended that the proponents of carbon capture and sequestration don't have the scientific basis to guarantee or to warrant....

Help Canadians understand now. I know it's always hard when one is supportive of a particular technology, but what are the real risks here? You said we have to put the steel in the ground, we're losing ground, we're behind the United States. Despite all the research we've been funding, we're falling behind.

Are Canadians supposed to believe that carbon capture and sequestration is safe?

[The Chair, Conservative, Laurie Hawn]

A short answer, please.

[Dr. David Keith]

The short answer is exactly the answer I gave. This is essentially an issue of how well you do the regulation. I think it is the clear consensus of the scientific and technical community that if you want to do this safely, you can do it extraordinarily safely at the level of other large industrial processes.

I don't think there's very much dispute about it. I don't recall.... To be clear, the IPCC process had many senior leaders from the global environmental community deeply involved in it. Not Suzuki, but many of the top people in the global environmental world were centrally involved in that report, and they signed on.

[The Chair, Conservative, Laurie Hawn]

Thank you very much.

We move on to Monsieur Bigras pour sept minutes, s'il vous plaît.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chairman.

With regard to today's subject, I think that we need to recognize that CO2 capture may very well be a solution. I think the 2005 IPCC report, the Intergovernment Panel on Climate Change, which states that it is possible to capture 85% to 95% of CO2 using this technology, should give us food for thought. I understand that there are three techniques: a post-combustion capture, a precombustion capture and an oxycombustion process, which have not yet been perfected and are not at the same level of development either.

I am concerned about the long-term safety and effectiveness of CO2 capture. Do we have any information on the ability to store CO2 in geological formations and ensure that there will be no CO2 losses over the long-term?

I have no doubt as to the short-term and the ability of this technology to capture CO2, but my concern, given the little information we have, is determining to what extent this is a long-term solution that will enable us to stabilize stored CO2.

[Dr. David Keith]

We have, actually, a lot of information. I recommend to you table 5.5 of the IPCC report, which summarizes the key lines of argument we have for understanding the long-term stability of storage. Let me just give you two of them: one engineered and one natural.

There are CO₂ accumulations underground that have been there in excess of a hundred million years. We know for certain there are--in fact, they're ubiquitous--cap rock formations that are capable of holding gases underground for in the order of a hundred million years or longer, essentially infinity on any time scale that matters to the climate problem.

Now, you might say, “Oh, that's true, but the problem is going to be that they will have leaking wells or leaking engineered structures.” We have now almost a hundred years of cumulative experience with natural gas storage, and for the IPCC report we tried to estimate what the total leakage rate was. To be clear, there have been leaks, and there have been people killed by natural gas storage accidents. None of this is zero-risk. But the overall leakage rate from natural gas storage is something less than one part in one hundred thousand a year, and that number is about one hundred times better than what you would need to have in order to do a sufficient job of managing the climate problem.

In my view, the big issue is actually local risk, not the long-term leakage.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

I have another question, and time is short. In the Dion plan or the green plan that had been proposed, it was estimated that a portion of the target could be achieved thanks to carbon sinks in our forests.

My question is for Mr. Lazar. Could you tell us whether, with regard to carbon sinks, Canadian forests are net emitters of carbon or whether they absorb instead carbon sinks? In other words, what is the current state of Canadian forests with regard to CO2 absorption?

[Avrim Lazar]

That's a good question. Thank you.

The Canadian forest is mature. It's extremely mature. In fact, most of Canada's forests are older than nature would let them be because of fire suppression. A mature forest tends to be a net emitter rather than an absorber of carbon dioxide.

That being said, to the extent that we can create new forests, for example, through aforestation of areas that are marginal agriculturally or that are otherwise being used for less valuable purposes, the creation of new forests would sequester more carbon.

The other way we could sequester more carbon would be to manage our forests in a more intensive way to grow more volume, which of course the foresters have always wanted to do. In Canada, we've been a bit reluctant because we like to sustain the natural ecosystems rather than maximize carbon storage in the forest.

A third way of sequestering is sequestering in product. When a tree grows and we process it into paper, all the carbon is still in the paper, and at the same time a second tree is growing. So through a natural process of harvesting, regeneration of the forest, and product creation, you get sequestration.

That being said, Kyoto does not recognize sequestration in products, only in living material.

In the forest industry, our basic job is carbon management. We live inside the carbon cycle. We harvest, regrow, harvest, regrow. So for us, carbon cycle management is part of life.

The bottom line is, can we reach our Kyoto targets by depending on sequestration in the forest? The answer is no. We can reach our Kyoto targets by emitting less carbon dioxide, which requires massive retooling of industry.

[Bernard Bigras, Bloc, Rosemont—La Petite-Patrie, QC]

I think my question is clear: Do you have an inventory? Are you able to tell us today whether the Canadian forest cover is a CO2 emitter or a carbon sink? We both know the process. It is often said that forests can be carbon sinks. Given that forest cover, its age... It's important because any future plan could consider this aspect to reach Kyoto targets.

In passing, this was what the Dion plan proposed. Some of the Kyoto targets could be reached using carbon sinks in forests; not most of them, naturally, but a small portion. If you're telling us that Canadian forests are net emitters, and not carbon sinks, it's clear that, in a future climate change action plan, we will not be able to count on carbon captured by forests to reduce greenhouse gas emissions.

I am not trying to trick you.

[Avrim Lazar]

I think my answer was clear: our forests are mature, and mature forests are CO2 emitters. It is not rocket science. However, there is another option. If we plant new forests, we plant trees on land that is unsuitable for agriculture, we can capture CO2.

[The Chair, Conservative, Laurie Hawn]

Thank you very much.

We'll move on to Mr. Cullen for seven minutes, please.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you, Chair.

I'll just quickly thank you, Mr. Lazar, for your refreshing presentation about the need to get on with it and what your industry has done to this point.

I don't have any questions for you this morning. It's always good to have a forester around.

[Avrim Lazar]

You haven't said that to me before.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Yes.

To Mr. Lewin, what's the cost of CO₂ emissions to the industry right now? How does it factor into your bottom line, into your budgets?

[Dr. David Lewin]

The way we reduce CO₂ emissions right now is purely through offsets.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

This is voluntary, though, isn't it?

[Dr. David Lewin]

No, actually it is not.

In the province of Alberta, we have a regulation on our Genesee 3 unit that requires us to go beyond purely the technological improvements we made by building the supercritical unit. We do that through acquiring offsets from various participants. There isn't really a mature market out there for trading, so we do bilateral arrangements, usually.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Keith has brought to the table the point that electricity generation is so much more part of the overall emissions compared with the tar sands, which get a lot of lightning rod attention.

What's the cost per tonne right now, without any enhanced oil recovery, for sequestering carbon emissions?

[Dr. David Lewin]

There's quite a wide range. I have to hesitate in mentioning a number, because that's proprietary. We have agreements with various companies that sequester carbon or destroy some of the other six.... There are six GHGs, for example.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

What's your range right now, if you had to ballpark it? I know you don't want to give away company secrets.

[Dr. David Lewin]

Well, if I mention it, then I will; that's the problem.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Maybe I'll go to somebody not in the business.

Mr. Keith, what's the average cost of carbon sequestration right now for a company in Canada?

[Dr. David Keith]

The problem is, the people in the business are the ones who know the real costs.