Evidence of meeting #8 for Environment and Sustainable Development in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cema.
A recording is available from Parliament.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Mr. Stringer, are first nation consultations obligations now being delivered through the MPMO?
Director General, Petroleum Resources Branch, Department of Natural Resources
No, in fact the MPMO is similar in some ways to what Steve has outlined for CEAA. Its responsibility is to coordinate responsibilities across the federal system. There are a large number of federal players, and on the major projects you do want to make sure you have the players in the same room to talk about these issues. So it is mechanism to get together on these issues the people who have an interest in the file.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Okay, that's fine. I'm suitably confused.
Mr. Matheson, I'm curious to know if you've been engaged in the process with the Government of Alberta, which I am advised is pursuing the possibility of resolving the mounting tar ponds by processing the water and draining it into the Athabasca River.
Have you raised concerns with the Government of Alberta about this proposed process?
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
That's not an issue with respect to fish and fish habitat.
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
It is. You're correct.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
It would be Environment Canada's responsibility, I understand that. But you are here speaking for Fisheries. It could potentially impact the health of the fishery.
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
You're correct. There is a section in the Fisheries Act that regulates the deposition of deleterious substances, which is what we're talking about. But DFO has delegated that responsibility to Environment Canada, because it's the department that deals with pollution.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
I'm sorry to interrupt you there, but I am just trying to fully understand your water management framework. So is the water management framework completely separate from any consideration of the concentration of pollutants in the river as well?
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
Yes.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
So you are looking only at how much water is there, not the quality of the water?
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
That's correct. This is a model that looks at volume and flow.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Is it not true that if the water levels go down, pollutants might become more concentrated?
Director General, Habitat Management Directorate, Department of Fisheries and Oceans
It's not my area of expertise, but—
Ginny Flood National Director, Environmental Assessments and Major Projects, Oceans and Habitat Sector, Department of Fisheries and Oceans
I think what's.... On phase two of the water management framework, there are other elements being considered. That science will probably help inform some of where we're going on phase two to better define some of those indicators.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Do you think it would wise to perhaps not approve any more—
Liberal
The Vice-Chair Liberal Francis Scarpaleggia
Well, pretty much, yes. In a couple of seconds, I would say so.
Liberal
Conservative
Mark Warawa Conservative Langley, BC
Thank you, Chair.
Mr. Stringer, I read your testimony when you were at the committee here less than a year ago, in June of last year. Welcome back.
When I read this, I thought of how the world has changed since then. You started to touch on the forecasts. I'm going to be asking you to elaborate a little bit on the forecasts, because.... What is the production? You've said the investment is going to be cut in half, from $20 billion down to $10 billion. Do we have now a new forecast graph that would show what would be happening?
I have another question, and it might be for Ms. Kasperski, regarding having carbon capture and storage. We're using water as a very important part of the process. Most of it, using the in situ technology, is recycled. I think we're up to 90% recycled now. But as we're using carbon capture and storage, that technology of using carbon reinjected, it will help old reserves that are no longer producing start to produce again. If we're using the carbon capture and storage, will that also lower the need to use water?
Those are the two questions. How is that going to play into the impacts on water? And starting off with Mr. Stringer, what's going to be happening with the forecasts and the ultimate total greenhouse gas emissions, maybe the importance of...? We will likely, with the slowdown, have the total greenhouse gas emissions drop, but we are also providing more efficient use per unit of production.
Could you elaborate on both of those? Thank you.
Director General, Petroleum Resources Branch, Department of Natural Resources
Certainly. I'll start off by taking the opportunity to say that in 2007, 38 megatonnes of GHG came from the oil sands, and that was between 4% and 5% of the Canadian total. That was in response to a previous question.
On the economics and the current forecast, we have provided, in the slides--I think it was slide seven--a sense of where we think it's going.
There are two or three things to keep in mind when we're thinking about forecasts. First of all, to be candid, when you're talking to people in Calgary who are making these decisions, their views seem to change from week to week. It really is a moving target at the moment.
What we are confident about are two or three things. One is that there is a slowdown. There's no question that we think there's going to be less spending in the future than there has been in the past. How long that is, we don't know. If you look at the announcements that have been made by the major companies that have investments and that had announced major expansions, they're not saying they're not doing it; they're saying they're delaying it, and they're saying they're delaying it for up to 18 months, or for a certain period of time. You should know that with the environmental assessment for the construction phase, it takes six years, or in that range, to go from planning to application to approvals to construction. So it may be some time before we see some of these things come back and see significant growth in the oil sands. That's one point.
A second point I would make is that what we are seeing is a significant decrease now--and this is just recently--in input costs. I might have said, and probably should have said back when I was here in May or June, that the input costs for steel or engineering work, for labour, were.... “Overheated” is a word that was often used; that word is no longer being used. We are still seeing significant employment in the oil sands. We're not seeing production cuts, but we are seeing the input costs come down and come down significantly. Whether they will come down to where the price of oil is at is a challenge, and that will determine how much new investment there's going to be.
The final thing I would say is that whether it's a delay of two years or whether it's a delay of six years, if we look at the requirement for oil in the world and where it's going to come from, this will be a very important resource, whether it's, again, a decade from now or two decades from now. There is a view, even within the patch, that it's much more sustainable now in terms of the pace of growth and that there's an opportunity to work on some of the issues we're talking about today.
Those are some of the comments I would make. What we have provided to the committee is an early sense of what that growth pattern might look like. We're watching it very closely, and I think those three points are what I would say in terms of the growth forecast.
Dr. Kim Kasperski Manager, Water Management, Department of Natural Resources
With regard to the impact of carbon capture and storage on the potential reduction of water intensity in oil sands development, there are three different types of oil in the ground: there are the oil sands, there's heavy oil, and there are conventional reserves.
This is just stuff I've read, so I'd have to confirm what I'm going to say now, but carbon dioxide has been piloted as a way to improve the recovery of heavy oil and the tertiary recovery of conventional reserves, but it has not been targeted at in situ recovery of the oil sands. So I don't think it will have a role in reducing water intensity in oil sands recovery.
Director General, Petroleum Resources Branch, Department of Natural Resources
Can I just add to that? I think the sense is, again, that the slowdown in the growth of the oil sands we're experiencing right now--and we'll see how it goes--will no doubt have an effect on cumulative water use and on cumulative air emissions.
As the members of the committee will know, the federal government and the Alberta government and Saskatchewan and others are working to move the technology on carbon capture and storage quickly with demonstration projects over the next number of years, which we think will be important in the oil sands as well as in other areas, such as in coal-fired generating plants, and so on.