Natural Resources Committee on Oct. 19th, 2006

[The Chair, Conservative, Lee Richardson]

Excuse me. The only qualification is that it be submitted to the committee, through the clerk, in both official languages.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

That's what I was thinking of.

Now I'm going to make a comment before asking my question.

Earlier you said, and rightly so, that the pipelines belong to the companies. I wouldn't want new members to hear that the companies maintain them. If a pipeline pollutes and the company considers that it's not leaking very much, it won't maintain it.

The last government had to spend $10 billion under the Kyoto Protocol to repair gas pipeline leaks because the companies didn't want to do it. The pipelines aren't necessarily maintained by the companies. As Mr. Cullen said, they leave that to the federal government, which then finds itself caught in the middle and obliged to do the maintenance that the companies don't want to do. The same thing occurs when they own part of the land.

In the current state of affairs, how much energy has a barrel of oil from Alberta cost in terms of embodied energy at the time it leaves Alberta, that is to say at the time it leaves for the purpose of being used?

[Howard Brown]

I understand the question, but I don't know the answer off the top of my head.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Could you eventually give us that answer?

[Howard Brown]

Of course, yes.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

If the operation costs the equivalent of two barrels of energy to produce one barrel of petroleum, the decision won't be the same.

[Howard Brown]

I can promise you that it's much less than that.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

I know, I know.

I gave you an example.

I'd like you to give me your interpretation because you're part of EnerCan. Why, in this case, did EnerCan decide to use the expression “responsible development” instead of “sustainable development”? Was it based on a new technology that appears in a bill? Why does the Commissioner of the Environment and Sustainable Development never refer to responsible development, whereas, at EnerCan, you talk about responsible development rather than sustained development?

[Howard Brown]

If I could just complete my answer on the question about two barrels in for one barrel out, that of course is quite possible in a centrally planned economy. Indeed, there are many examples in the Soviet Union where the production in the centrally planned economy actually wound up destroying value so that the output was worth less than the inputs. But of course in a market-based system, it's not possible for that to happen.

I have no comment on the use of the term “responsible development”. I think you'd have to ask the people who have used it. The reality is that the term “sustainable development” appears in the mandate given by Parliament to the department when it was created. I think I'm fairly safe in coming to Parliament and talking about “sustainable development” until that's changed by Parliament.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Thank you. Your answers are excellent.

Earlier, you mentioned water recycling. Let's get this straight. Nearly all the water used to make steam goes away and never comes back. So we have to agree on the quantity of water that can be recycled. For example, when you make artificial snow, it's said that the water will be recycled after the fact, but there is no water because it disappears. The same is true in this respect; little water remains.

Could you tell us what quantity of water disappears and what quantity would be recyclable?

[Howard Brown]

No, I think the steam actually is recycled. Under in situ projects, the steam is formed underground and either comes out as a mix with the bitumen or is recycled underground. That's why it has to happen at a certain depth. It has to be deep underground; otherwise, as Dr. Hamza was saying, you can't contain the steam. I don't think there is enough water in the Athabasca River to run steam projects without recycling the water.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

But you don't know the percentages. A certain quantity must be lost. It's scientifically impossible not to lose water, isn't it?

[Howard Brown]

Absolutely. The figure that sticks in my mind is 90%. What I don't remember is whether 90% is the average or best practice, but we'll undertake to provide the committee with those numbers.

[Dr. Hassan Hamza]

We'll give some information, but 90% is a commonly agreed upon number by researchers, and even the company records. But it would vary, and you're right about the evaporation. If you look at the tailings ponds and the water there, there is water that evaporates, and there is also condensation from the snow and the rain, and so on. If you'd like, we would be very happy to give you some account of that.

There are definitely some losses. That's why there is a draw from the river, to compensate for these losses. That's very well known. But one thing, actually, that is important is that there is a permission for the companies to withdraw certain amounts from the river, as given to them by the Alberta government, and I don't know of any company that has exceeded or even reached its level of allowance. It's always below the level of allowance. But that doesn't mean the technology is at its optimum. There is a lot of room there, and that's an area we're working in.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Thank you, sir.

[The Chair, Conservative, Lee Richardson]

Thank you for the questions and also for the answers.

Mr. Harris.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you, Mr. Chair.

I have just one question, Mr. Brown, in regard to the explanation about natural gas usage on page 13. It would appear to me that there is a lot of natural gas being used in that process, and it's expected to double by 2015, according to your notes. What percentage of Alberta natural gas production would that roughly work out to be around 2015?

[Howard Brown]

Actually, I have an answer to an earlier question, so I'll add that to the list and provide the answer to the earlier one. We'll keep the inventory of things we have to get back to you on.

I don't know what proportion of Alberta production it would be, but it's about 1% of total North American demand. Canada produces maybe 20% or 25% of the North American supply, I would think, and Alberta would be the.... I'd have to check.

I don't know the answer on a BTU basis on the question about how much energy it takes to get a barrel of oil out. I'm quoting from the National Energy Board's Canada's Oil Sands: an Update. This was done this year. It's a million cubic feet of gas for a barrel of bitumen, currently selling for $6, or so, to produce it.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

You said a million cubic feet?

[Howard Brown]

I'm sorry, a thousand cubic feet.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Actually, I only had the one question, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

Do you want to finish off that round?

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

Thank you, Mr. Chair.

I really appreciate your presentation today, and I'm looking even more forward to going now, recognizing that we have 50 square kilometres on 140,000 square kilometres that we have developed. And I appreciate your including double the size of my home province. It gives me some context for this, as well.

It is going to be quite a challenge balancing out three things: the resource potential we have, the investment that's required, and the environmental implications we are going to be faced with.

I have a couple of questions I want clarification on. Would that 175 billion barrels be from the full 140,000 kilometres being developed? No? Is that just the usable piece?

[Howard Brown]

The 174.5 billion barrels, to be precise, is what is estimated to be economically recoverable with current technologies.

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

So it is the one-third, basically.