Thank you very much, Madam Chair, and good afternoon.
It is a pleasure to appear before you to share some of the views of the Canadian Energy Pipeline Association. I look forward to answering any questions you might have.
CEPA represents companies that transport 97% of the oil and natural gas produced and used in Canada. Our members currently operate more than 110,000 kilometres of pipeline in Canada, transporting over 3.2 million barrels of oil and 14.6 billion cubic feet of gas every day. They employ over 8,000 full-time employees.
Pipelines are the only feasible means, and the safest, of transporting large volumes of crude oil and natural gas over land.
In delivering budget 2012, Minister Flaherty acknowledged that the natural resource and energy sector is driving economic growth across the country. It is creating good jobs not only directly but also indirectly in manufacturing, clerical work, skilled trades, and financial services. Canada's resource industries offer huge potential to create even more jobs and growth, now and over the next generation.
The responsible resource development provisions of budget 2012 put in place the enabling conditions to realize these opportunities. CEPA has been a strong supporter of the objective behind regulatory reform, which is to improve the efficiency of, and the environmental outcomes from, environmental assessments. The proposed process reduces duplication, ensures timelines, and maintains or improves environmental standards by focusing assessments on major environmental concerns and on avoiding significant adverse effects.
Our recommendations for the 2013 budget speak to the next steps in this process. They fall into two intrinsically related categories: ensuring regulatory effectiveness, and pipeline safety performance.
CEPA's recommendation with respect to regulatory effectiveness is that the federal government commit sufficient resources to implement the changes set in motion and to monitor their success.
Bill C-38 changed the legislative framework for the review of major projects in Canada, but the policy and regulatory work still needs to be completed to support those changes. Continuing the regulatory reform process will ensure that through timely, efficient, and predictable processes, investments can be made with confidence. Strategic scrutiny and clear outcomes will ensure environmental protection.
Pipelines currently transport approximately $125 billion in oil and gas, at a cost of $5 billion a year. Pipeline transportation provides a value-added of approximately $120 billion to the Canadian economy. Given current plans for expansion, the industry is in a position to add even more value, provided it can get the planned infrastructure built.
Integrally related to regulatory efficiency is pipeline safety, as it is the safety performance of our industry that is a key component of maintaining our social licence to operate. Safety is the top priority for pipeline companies in all aspects of pipeline development and operation. The industry is taking a leadership role in these efforts. In 2011, CEPA members spent more than $600 million on monitoring and maintenance activities to ensure the safety of pipelines.
Extensive regulatory tools exist to support and address pipeline integrity, including construction standards, maintenance, audits, and regulatory powers to shut down and investigate. However, Canada does not currently have the means to require and enforce the physical protection of pipelines from the activities of others. Damage to pipelines from third parties is where we face the biggest risk. Experience in other countries shows that lives are saved where laws and enforcement are in place. These measures include requirements for mandatory one call in all jurisdictions and administrative penalties for the enforcement of those rules.
CEPA appreciates the efforts to date to both introduce administrative monetary penalties and to increase the number of pipeline inspections, which we believe, along with transparent enforcement tools, including escalating fines and mandatory one call, is a key part of the solution.
Canada has been fortunate in weathering the economic troubles that have challenged the rest of the world. This is due, in large part, to the role the resource and energy industry has played. The process set in motion by the government to reform the regulatory system is important to ensure that Canada can retain and attract the investment necessary to develop pipeline infrastructure. This infrastructure will support growth in the natural resource sector and the diversification of Canada's markets. Commitments made by the federal government to ensure that the regulatory reform process is effectively and fully implemented to deliver better environmental outcomes and that the regulators have the necessary tools to keep pipelines safe are important steps in making this happen.
Thank you.