Environment Committee on Nov. 27th, 2007

[The Vice-Chair, Liberal, Geoff Regan]

Thank you.

Ms. Hayes, did anything come up in your mind in the meantime? I knew something would.

[Barbara Hayes]

Actually, yes, I do have something.

In all this conversation about leadership and credibility, the thing I keep thinking is that, to my understanding, the EU has already promised sharp reductions, and they promise to make more reductions if the rest of the world comes along. So they promised 30%. To me, that would be a real leadership model for Canada to follow, to actually be making reductions and say, “And we'll do more if you do more.”

[The Vice-Chair, Liberal, Geoff Regan]

Thank you very much.

I'm going to turn now to Mr. Allen.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair. I have a couple of quick questions.

Mr. Drexhage, you commented before about the electricity and the power and the capital stock. Also, Ms. Donnelly commented about that. What's interesting is that last week I got a chance to debate on the Donkin Coal Mine, which is a very, very good project.

Nova Scotia Power, of course, right now has four coal-burning plants, which burn about 2 million to 2.5 million tonnes of coal every year. Those plants represent about 50% of the electricity capacity in Nova Scotia, and they're relatively new. The province is making significant investments in SO₂ and that type of thing--hundreds of millions of dollars.

What kinds of suggestions would you make for us, going into these, to ensure that, number one, we react to the significant lead time to replace this capital stock, and number two, that we don't create a stranded investment that will end up costing our ratepayers inordinately high power rates in this country?

I'll start with Mr. Drexhage.

[John Drexhage]

Certainly in the discussions that are going on for the large final emitters system, one of the questions is what the default standard should be for new installations. I would say that anything more than a combined gas cycle would be unacceptable. You have to give industry the signal that at the very least we need a combined gas cycle value for new installations.

Frankly, I even prefer what B.C. has chosen to do, which is to say that the standard for all new installations is going to be carbon capture and storage. But I also want to be a bit realistic about this: at the very least, a combined gas cycle.

Secondly, in terms of looking at the stranded investment question, I was a little surprised by Aldyen's observations, and I'd like to take a look at her numbers, because if you actually look at the statement that came out from the Energy Council, which is a group of all energy associations, from the Canadian Association of Petroleum Producers to the Canadian Electricity Association to the Canadian Wind Energy Association, they say that right now we're at an incredibly critical time in terms of capital stock turnover in the electrical industry. So, again, the kinds of decisions that are being made right now are really going to have impacts for at least the next 40 years, and we have to make sure that has some staying power.

Notwithstanding all that can happen within Canada, I would also agree that far and away our attention has to be focused on what's going on in Ohio and in some of these larger states. If you look at the grid—my colleague has a map on her wall of the power stations and the emissions that come therefrom—Canada is absolutely dwarfed by what's going on in the midwest. They recently signed an agreement. We really have to coordinate very strongly with them to make sure that is addressed quickly.

[Aldyen Donnelly]

I'm forgetting. You got me there and I've forgotten what I wanted to say to your remark.

Just to put the stock turnover situation in context, it's an unusual time in Canadian history, because we've shut down only two electricity generating facilities since 1990, while 35% of our existing electricity generation capacity was built subsequent to 1992. We have two units that are scheduled for a life extension or shutdown in Saskatchewan over the next five years, and then the Ontario coal plants. That's not very many plants, but in the context of Canada, that's a lot of supply that we're looking to replace.

Every one of those plants is under 40 years old, and the utilities that are electing to shut them down are electing to shut down plants in a situation that would be considered to be a premature shutdown in the U.S.

What were you...?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Did you want to ask me a question?

[Aldyen Donnelly]

No. You asked a question that I really wanted to....

I'm going to say something. I'm going to run the risk of everybody who already hates me, hating me more.

I've been looking at the Nova Scotia inventory for four months, and the dilemma we have in Canada is this. If we implement the federal regulations as proposed, simply because of the structure of the economies, we're imposing a much larger per capita reduction obligation on the provinces of Nova Scotia and New Brunswick than on anybody else in Canada, by miles. Right now, all we're saying to the people of Nova Scotia and New Brunswick is that it's okay, they can buy offsets from Saskatchewan farmers. I think that looks like political suicide.

So the question is, what do you do? I hate to say this; I'm going to be hated forever. You've got to go to the ends of the earth to get the biggest, bloody LNG plant landed in that port as soon as possible.

[The Vice-Chair, Liberal, Geoff Regan]

Mr. Allen is delighted with that answer. Someone from Nova Scotia will—

[Aldyen Donnelly]

I can't give you any help without that LNG plant.

[The Vice-Chair, Liberal, Geoff Regan]

I'm sorry, your time is up.

I'm going to turn to Mr. McGuinty for the last couple of minutes.

I think there's probably time for one question.

[David McGuinty, Liberal, Ottawa South, ON]

I just want to get on the record....

Ms. Donnelly, you were asked by my colleague about the Montreal Protocol. As I recollect, 80% of all the product produced at the time of the negotiation of the Montreal Protocol was produced by one company, DuPont. Many of the corporations you cited were wholly owned subsidiaries of DuPont. Many of the nation states that were engaged hosted wholly owned subsidiaries of DuPont, and the real driver for DuPont to take corrective action was corporate social responsibility and shareholder activism. I know, I sat on their board.

So I think it's important to be really clear about the success of the Montreal Protocol in its entirety.

Mr. Drexhage, you made some very compelling comments. Mr. Bramley also did. He talked about how we should be allocating the reduction of greenhouse gases. Should it be on a per capita basis? On a historical basis? Per unit of GDP?

Mr. Drexhage, you also said that even though the Prime Minister says we can all go but we can only go together, you made reference to the fact that we're already negotiating a contrary position under annex one. Can you help us understand what that meant?

[John Drexhage]

I'm not clear whether this is a contrary position or not. I was simply making a statement of fact. A process currently under way was launched in Montreal that obliges annex one parties, who ratified the Kyoto Protocol, to discuss further and deeper reduction commitments for the post-2012 period. Canada has been actively participating in that forum since then, and still is, as far as I'm aware.

[The Vice-Chair, Liberal, Geoff Regan]

Thank you very much, Mr. Drexhage.

Thank you, Mr. McGuinty.

Thank you to all members of the committee and our witnesses.

The next meeting of the committee will be on Thursday of this week in room 269 in the West Block. Mr. Bigras will be chairing the meeting on Thursday. I look forward to seeing you all there.

Once again, thank you very much to all the witnesses.

Thank you very much. Good afternoon.

The meeting is adjourned.