Evidence of meeting #11 for Environment and Sustainable Development in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was production.
A video is available from Parliament.
Senior Policy Analyst, Macdonald-Laurier Institute
The only subsidies I think we should get rid of are subsidies. We should have a much stricter definition of that.
Things that promote the burning of fossil fuels, not things that promote eliminating greenhouse gases.... I think we're missing the forest for the trees in some of the public discussion we've had and that I heard in the last panel.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Thank you very much.
Mr. Gooderham, you talked about oil and gas and that we only account for 15% of emissions, and you say 85% of those are downstream tailpipe. Are you suggesting that when we calculate emissions in Canada, we should include those tailpipe emissions?
As an Individual
That's just an accounting. You could do it, and it could be in the official numbers.
The whole point of my submission is that the fact that we don't count the downstream emissions is not a reason to not pay careful attention to the implications of our increasing oil production. For every 15 units of emissions, if you will, that we generate in Canada in the production process and might collect through the CCUS, there are 85 units that are being released somewhere else, like in Shanghai or Detroit.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Should we not export oil? Should Canada stop all oil exports?
As an Individual
First of all, what I'm saying is you have to weigh the downstream emissions when making the policy decisions about what Canada does with increasing production. I would say that the answer is we should stop increasing production, because those downstream emissions are going to cause immense suffering, whether we're counting them or not, so we should take them into account.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Wouldn't that oil production be picked up from somewhere else in the world? You talk about how it's global.
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
Canada is trying to use things like carbon capture, utilization and storage with these kinds of tax credits to lower the amount. Why would we not want to give that and say that other countries produce oil, so it's their responsibility to try to take out some of that carbon? We're not going to produce it, and hope that someone does a better job.
As an Individual
First of all, if we eliminated, say, half of our upstream emissions, we'd be eliminating 7% of the emissions that we're putting into the atmosphere from oil production. That is negligible, given the crisis we're facing.
As to the point about carbon leakage, you're saying if we don't do it, somebody else will—
Conservative
As an Individual
Give me a minute.
Twenty years ago, we might have said, “Let's not do anything until we get an agreement with many other countries, so we'll all agree to reduce our oil at the rate that is necessary to avoid at a catastrophic outcome”, but we didn't do that.
Now, my point in my opening was that we have nine years left to very sharply turn the curve down on global emissions. We're a big contributor to that. Saying, “We'd better not do this, because if we do it, somebody else will produce it” is essentially a suicide march. What I'm saying to you—
Conservative
Kyle Seeback Conservative Dufferin—Caledon, ON
No, what we're saying is that we should invest in things that are going to lower the oil and gas emissions here in Canada. The demand for oil is there. If we're not producing it, someone else will. Why don't we produce it in a way that's going to reduce the actual emissions from producing it—
Conservative
Liberal
Liberal
Terry Duguid Liberal Winnipeg South, MB
Thank you, Mr. Chair.
Thank you to our witnesses. It's a great discussion this evening.
I would just put it on the record that in the Liberal platform, which I'm sure you memorized, Mr. Chair, on the campaign trail, there is reference in the document to EDC being refocused to be the largest clean-technology financier in Canada.
I'm fascinated with this discussion on CCUS. We have ENGOs like the Pembina Institute that are actually partnering with oil and gas to support CCUS. We have other ENGOs that are seemingly quite opposed.
My question is for you, Ms. Exner-Pirot. By the way, I'm a fellow University of Calgary graduate, and lived in that community for some years. I think in your view, CCUS is a work-in-progress and can be viewed as investing in R and D, research and development, with some promise to make industries like blue hydrogen possible. Without carbon capture and underground storage, blue hydrogen would not be possible, to my understanding.
I wonder if you would comment on the 45Q tax credit in the U.S., how it is driving CCUS, and whether it has been successful south of the border.
Senior Policy Analyst, Macdonald-Laurier Institute
We heard in the last panel that the time has already passed for CCUS. I think that couldn't be further from the truth. But if Canada is a laggard in anything, it's in investing in carbon capture. We've already seen Norway investing in carbon capture. In fact, they're providing a straight-out subsidy paying for two-thirds of the cost of a carbon capture and utilization strategy, with industry paying only one-third of the cost, because Norway is so committed to reducing those greenhouse gas emissions.
In the United States, as you mentioned, the section 45Q tax credit was introduced back in 2008 and reformed in 2018, so they have a lot of experience with it. It has jump-started numerous CCUS projects. It now even has bipartisan support to be expanded, and we know how hard it is to get bipartisan support for anything in Washington. The major difference with the 45Q tax credit is that it also supports tax credits for enhanced oil recovery. That's obviously the most economic and, from an industry perspective, the most attractive tax credit.
If anything, I would say that Canada's and the Liberals' plan to introduce this tax credit for CCUS, although good, doesn't go far enough. If we're really concerned about the emissions, as the last MP noted, someone else is producing it if Canada isn't producing it, so let's make it as clean as possible in Canada. When you also do—
Liberal
Terry Duguid Liberal Winnipeg South, MB
Perhaps I could squeeze in one more question, because I'm sharing my time with Ms. May.
As the price on pollution goes up to $170 a tonne in 2030, it would make carbon capture and underground storage even more competitive. Would you agree with that statement?
Senior Policy Analyst, Macdonald-Laurier Institute
Enhanced oil recovery is already competitive, because what it does....
Mr. Chair, I'm getting a bit of feedback. I don't know if it's me.
Liberal
Terry Duguid Liberal Winnipeg South, MB
I'm not talking about for extraction purposes. I'm talking about for storing carbon.
Senior Policy Analyst, Macdonald-Laurier Institute
Yes. Actually, Canada has tremendous geological potential for storage. We're blessed with so many natural resources. We're also blessed with the ability to store carbon effectively.
Elizabeth May Green Saanich—Gulf Islands, BC
Thank you so much, Mr. Chair, and thank you particularly to Terry Duguid.
My questions are for you, Mr. Gooderham. I know what you're talking about when you say that we have nine years, but I'm not sure we have a shared fact set around the table about why you say nine years. I'm just going to run through some numbers and ask you to speak to the question of opportunity costs when I finish this.
It's the IPCC October 2018 special report on 1.5°C that specifically says there's only one way that we hold to 1.5°C, and that's deep cuts this decade on the order of 50% below 2010 levels by 2030. That's a quite unforgiving number. The IPCC has said that if we fail, the window will close permanently. If we get to net zero by 2050, it will be too little, too late. We will have exceeded potentially 2°C, 3°C and so on.
My question to you is in terms of carbon budgets and the unforgiving nature of the physics of the atmosphere. If we put our money into fossil fuel subsidies, what do you see as an opportunity cost, particularly if it's a technology like carbon capture and storage, which has failed to meet its targets in countries around the world? What does it do to our chances of being able to survive on the planet into the next half of the century?
