Natural Resources Committee on June 6th, 2006

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chairman. I'll try to be as brief as possible.

Thank you, panel, for being here today. Certainly energy is at a point in Canadian economic development where we're making some very broad and significant choices. That leads me to my first question, which I'll put out to you.

You talk about critical variables in making decisions about energy, and you mentioned an energy framework. Does this group believe we need a national energy strategy that can drive the industry in the correct directions with the correct values being attached to the directions we take?

That plays back in so many fashions. It can play back in energy efficiency, of course.

I went through the numbers you had given, and I thought 10% was a little bit conservative, considering that you were anticipating that the best-case scenario for energy efficiency was a reduction of almost 1,000 units out of 6,300. That's more like 16%. That was curious, but I do think there is a lot in energy efficiency.

If you look at the Japanese and the Swedish in terms of the efficiency of using fossil fuels for generating electricity, you'll see that their percentages are considerably higher than ours. If we're retooling into our production of electricity from these sources, we should be putting those values of efficiency very high, and it certainly could play there in making it energy efficient in that regard.

I want to touch on the natural gas industry, because of course the figures that the National Energy Board put in projection of supply and demand for natural gas show us in a crisis in natural gas by 2015 to 2020 in Canada, bearing in mind that we have some obligations under NAFTA. So we'll be in a crisis of supply, whether we bring in liquefied natural gas, whether we bring coalbed methane on board, or whether we use all the alternatives that we have available, if we don't have a massive program of energy efficiency using natural gas.

Then we go to liquefied natural gas, and when you attach it to values, say, at the heart of the modern economy, which is central to economic development and productivity, we're talking about importing another source of fossil fuel. We're importing gas and exporting our economy. In terms of our fundamental security and well-being, we're taking on another imported energy source, and that's certainly not providing security to Canadians critical to environmental management. We're transferring the greenhouse gas emissions that are required for the production and distribution of a liquefied form of natural gas over to another country. So when you look at it in terms of your values, this is something we have to take very seriously, this new energy form that we're considering for Canada and that you've promoted a number of times in your document.

Oil sands policy is another very important issue right now. It relates back to the production of hydrogen, interestingly enough, because, of course, Fort McMurray is the largest producer and user of hydrogen in the world. A partial problem we have with the oil sands is that we're using natural gas to produce hydrogen, where there may by renewable or more acceptable forms of production of hydrogen that we could look at.

However, we have taken a hands-off policy since 1995. The Chrétien government, in conjunction with the Alberta government at that time, instituted some very large tax and royalty breaks to these companies--when of course oil was at $12 a barrel; we're now at $70. Perhaps this is causing an imbalance in our energy mix right now in Canada and the direction in which we're going, because we've favoured one energy industry over others. It may have been appropriate in the 1990s, but obviously there's some question about its appropriateness now.

I am sure another one you talked about deals with coal, sequestration of carbon dioxide. A very good MIT study looks at the nuclear or the wind industry as being cost-competitive today with any potential sequestration of carbon dioxide. Are you suggesting we should wait 15 or 20 years in moving on our coal industry when we have more viable options right now in the renewables or in the nuclear industry, which are cost-competitive right now with the projections they have from sequestering coal from combined-cycled plants?

Those are a number of questions, and I'll leave it at that.

[Hans Konow]

Thank you for those questions. I will invite my colleagues to address a number of them.

The first one was framework versus a national energy strategy with set or determined values embedded in it. Our view, which runs through the presentation, is that the track record of the former national energy policy as a value-determined strategy speaks for itself. It's not some place we want to go back to. We think markets do a much better job of allocating resources appropriately. No, we do not see a framework in the sense of a deterministic strategy. We see a framework in terms of an articulated set of government policies, and understanding those and then fine-tuning them to optimize investment conditions to ensure that markets are allowed to work well.

In terms of the last question--and I want to link it to markets, coal sequestration and its cost structure--about why we would do that when we think wind, for instance, or other alternatives would be cost-competitive with those projected costs, again, I think if you let markets work, they will either select for or against a clean coal strategy in future. If other alternatives are more economic and more attractive, they will emerge as the winners and those that are more expensive will not tend to flourish.

In our view, we in Canada think we have an abundant coal resource. If we are to use it, we have to make it environmentally compatible with our future commitments and expectations. There are technologies that would allow us to do that. If they are cost-competitive and can be made reliable and cost-competitive, we should use them. If we cannot get to that point, then we won't use them. It's that simple.

Efficiency based on Europe and Japan--when prices in Canada reflect those in Europe and Japan, we will see the same technologies deployed here. It's only economically rational that the technologies deployed address energy in the same way as other inputs. We optimize toward more or less energy depending on the price and the price of the technology choice you have. The trend is certainly toward a standardization in products and equipment that is more globally consistent, so European and Japanese products and equipment standards for efficiency will increasingly be interchangeable with ours in North America. I see that as closing the gap. At one time, we had huge differentials in energy prices.

Today those prices are coming together and technology is developed globally. All the manufacturing, the big equipment, most of the motors that drive manufacturing and industry come from a limited number of global technology sources. When you map technology you find you're going back to core technologies, and generally we see a closing of that gap through international standardization, another thing we are adopting in Canada. I sit on the board of the Standards Council of Canada. One of the things we do a lot of is adopting international standards for equipment; we see more and more of that.

I will pass on the natural gas crisis question---the LNG, the oil sands, and the oil subsidies questions---to my colleagues who are more directly involved.

[Brian Maynard]

I'll take the natural gas supply and oil sands policy and leave liquefied natural gas to Mr. MacInnis.

The numbers you referred to on natural gas are a reference from the National Energy Board about natural gas reserves. Natural gas reserves are what are technically and economically achievable today, and you're right, it represents today's reserves. Identified reserves that we can book represent 10 years' production.

But our resource base is far more significant than that. There is in excess of a couple of hundred trillion cubic feet in the western Canadian sedimentary bases covering British Columbia, Alberta, and Saskatchewan; we're producing six trillion cubic feet annually. A chart I'm looking at right now shows the remaining resource base as 538 trillion cubic feet, which represents close to 90 years of annual production.

We have to take into account that we are moving into more non-traditional areas. Coalbed methane represents a significant resource. We have drilled only a small number of wells and produced very little in terms of coalbed methane in western Canada. Our trend is to spend a lot of time, money, and technology on coalbed methane, and we expect coalbed methane to represent a significant growth area in the future.

Similarly, we have gas in the north, we have gas offshore on the east coast, and we have gas, we're fairly positive, offshore on the west coast. There are tremendous sources of gas remaining in the country that we need to be able to access and that we can produce.

Every chart we have seen produced otherwise shows that we do not see continued growth in natural gas production, but we do see a flattening and a long continued production profile, so please rest assured that we are not running out of natural gas any time soon.

With respect to oil sands policy, you're absolutely right. Governments of the day put in place a fiscal and regulatory regime that was very, very successful. Today we're seeing in excess of a million barrels a day come out of the oil sands. We see projections showing that it may possibly quadruple by 2020 and certainly double within the next 10 years.

Interestingly enough, this growth in supply by Canada is happening at a time when the global economy worldwide is screaming out for additional oil resources, and Canada is in the unique position of being able to meet that demand. We will add another two and a half million barrels of supply to the world supply over the next 10 to 15 years.

At the same time, we are challenged with consumers pressing us with respect to high prices. Prices are a function of demand and supply. We see the world supply situation; we see demand continuing at a fairly significant pace; if we don't bring on supply to address that basic demand, prices are going to go up and consumers are going to be that much more impacted by the very challenges we see--and those debates, we all know, are occurring.

So yes, we're a victim of our own success. We've put in place very successful policies that have led to tremendous growth rates. We are providing a supply the world is calling for in increasing numbers. Canada is in the unique position of generating tremendous wealth, generating supply for its own consumption, and generating supply for export, which leads to a situation such as Hans mentioned earlier. In 2004 the oil and gas industry contributed $18 billion to governments; in 2005 we contributed $27 billion to governments. From job impacts to the amount of taxes and royalties we pay, the oil and gas industry makes significant contributions to the Canadian economy.

A good sound policy has led to success, has led to increase of supply, and has helped dampen prices overall. I don't see any problem with it whatsoever.

[The Chair, Conservative, Lee Richardson]

I'd give you a comment, but we have now gone to 15 minutes on that last five-minute question. I've allowed considerable latitude today in the first round for all of our questioners, simply because it's such a broad topic and you have brought so much to the table. There were very good questions, they deserve the kind of answer you're providing, and I appreciate that, but it simply cuts into the next round, so your colleagues will have to bear with the length of the questions that have been asked.

I'm not complaining about the answers. I think the questions were such that you needed to give that much time in response.

I will, though, have to move to Mr. Paradis for his round.

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

With regard to climate change, from listening to Mr. Elston’s comments, I gather that the group thinks we are in a transition period. I find that very interesting. In the past, climate change was not given the same importance as it is today. Demographic and economic growth have necessarily given rise to an increase in greenhouse gases. Did we used to have the technology required? In any case, the standards set were not met.

Given that this problem is currently in the spotlight, do we have all the technologies required to assess the situation better, considering that there will necessarily be demographic and economic growth? No one is against economic growth.

I am referring more particularly to page 28, where it talks about the scenarios envisaged. According to the group, what would be a realistic scenario?

Second, on page 34, it says that public support is needed so that everything can run smoothly for everyone involved, with regard to the environment, energy efficiency, energy producers, etc. I feel that industry is ready. In fact, you write that industry is prepared to fall into step and do its part. I think that it is making efforts now. I would like some clarifications in this connection.

As for the government’s leadership role in getting the message across, as you say, what do you expect in concrete terms? Earlier someone mentioned data-gathering by Statistics Canada, but some points remain a bit vague in my mind. I would like to know your opinion on this, since this is a sensitive matter in the public opinion. I think that your observations might be very useful in this regard.

Thank you.

[Hans Konow]

Thank you for your question.

There are a number of questions embedded in it, so I think we will work our way through it.

You mentioned Mr. Elston's comment about being in a transitions period. Murray, did you want to pick up on that?

[Murray Elston]

Sure.

I think it goes back to technology. Going back to Mr. Bevington's observation about sequestration with coal, I think we really have to be very concerned, very strong-minded, about taking stock of all of the resources we have at our disposal in Canada, and we shouldn't let any of them fall by the wayside without our moving very strongly to make sure we have the technologies to prevent problems with our atmospheric releases.

So sequestration is a response to carbon dioxide. I think the experimentation that has occurred in Saskatchewan has shown some success early on. It's certainly well touted by the United States as they look at their coal industry moving forward. There are huge amounts of money coming out of the U.S. government, by the way, to move towards the clean coal technology.

The same thing, by the way, is also happening in China, where there are huge amounts of money being invested in technology to clean up coal. In that jurisdiction, obviously, they have a huge amount of coal being used for energy generation.

In our situation, with the nuclear industry we are likewise moving to become.... Well, we can't eliminate too much more of our carbon dioxide, obviously, because we don't emit any as we go through the reactions and generate electricity, but we are looking at becoming much more efficient on the use of our fuel. The new ACR being designed at AECL, Atomic Energy of Canada Limited, will use less fuel and produce smaller amounts of expended fuel for the amount of electricity generated.

At the end of the day, that's just electricity. But nuclear, along with wind and some other renewables, can be used to generate hydrogen, which will permit us, with new technologies and with the building of infrastructure for those new technologies, to transition ourselves into other types of economies.

I'm really quite keen to say that there is not yet enough being done. In Canada we are comparatively low in investments at the government level. For instance, in the United States there's a $280 million program out of the Department of Energy that assists the first building of new nuclear units in that jurisdiction. So there are lots of things happening there, lots of things on clean coal. There are smaller responses here in Canada.

I think the big issue--and I've heard it discussed with respect to coal technology--is that with such huge amounts of money being invested internationally, can Canada go on its own way in some of those technologies? I think not, but I think maybe we could become part of the international consortia to look at how we become more efficient. We are not the only jurisdiction looking at that as a prospect. Canada makes great contributions. Nuclear makes great contributions in this coal technology that's being developed.

So...more in the technology.

There's a great program, by the way, at NRCan that needs a little bit more encouragement. It's run out of Graham Campbell's shop. There are a lot of new technologies being funded there, novel technologies. I think it would be a very worthwhile one to push even further. There are some reports on technology development in Canada that I think will be extremely helpful. I think a lot of time should be spent on tomorrow, as well as on dealing with yesterday's problems.

[Hans Konow]

I'll briefly try to deal with the other two elements in your question, energy efficiency and public support.

In the area of energy efficiency, both gas and electric utilities have been involved in pursuing energy efficiency with their customers for decades now, so there's a long history of lessons learned. Some of them were painful, quite frankly, and some of them very useful in pointing ways to the future.

We see that commitment areas, such as building envelope efficiency to the efficiency of machinery for the manufacturing process...for instance, electric motors are used in every manufacturing process in virtually every part of our economy, and in aggregate, the amount of load they take off the system is extremely substantial. If you can increase the efficiency through variable speed drives and various technologies that are quite well known and continually upgrade that...again, that's why the industrial sector is showing some of the best results in terms of energy efficiency. On our industrial processes, including those that the energy industry uses, we have to continue to upgrade and render those more efficient, and we have programs to do that.

There are areas in commercial and residential that are challenging, particularly where energy is a relatively small part of the cost of doing business. Managers don't tend to focus on it very much, but in aggregate, if there's an awful lot of them, there's still a significant potential there that could be addressed. Similarly, in rented accommodation, in condos and whatnot, anywhere in which people aren't paying the actual energy bill, the message isn't getting through to them to conserve and do things wisely. So there are structural opportunities to address in different parts of the economy.

Again, there's no one area in energy consumption that lends itself to a quick fix. But all areas are being addressed through comprehensive programs. For instance, Power Smart is a well-known branded program used in British Columbia and some other parts of the country from time to time. There's a lot of learning behind how to shape behavioural response to energy prices, as well as the technological base that underpins consumption.

Public support, not only for us in doing our business but for energy efficiency opportunities, informing citizens as to where their best opportunity is to act in their own self-interest to improve energy efficiency, I think is an extremely valuable strategy. The federal government has had a role in some of those programs and probably should be considering how to deploy or redeploy some of them in the future, aimed at energy efficiency as opposed to some other target that's more difficult to quantify. As we say, as a strategic element in our mix, we need the public's support as well as government support to achieve energy efficiency objectives.

[David MacInnis]

Responding directly to the question of what you need from government, you need government to recognize the capital stock turnover cycle of companies, to make sure the programs governments do develop recognize those cycles.

Secondly, leverage industry and moneys from other governments as well. This is not only a comment about the federal government; there are too many governments doing their own thing in their own stovepipe manner. There are some incredible partnership opportunities out there. There's expertise in Quebec and B.C., etc., that the federal government can utilize, and a more effective partnership approach would help in that respect.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. MacInnis, and thank you, Mr. Paradis.

Gentlemen, we're at a point where we can see we're not going to get to a third round today. We're going to have to be very strict with keeping to the five minutes for the question and answer.

Mr. Cullen, if you want to ask a four-minute question, you're going to have one minute for the answer.

We're going to Mr. Cullen, followed by Mr. Lussier, then Mr. Trost for five minutes each.

[Roy Cullen, Liberal, Etobicoke North, ON]

Thank you, Mr. Chair, and thank you to you, Hans, and your colleagues. I must say, bringing all these organizations together under one roof is very energy efficient, and I congratulate you.

I wanted to dialogue a bit with Murray on a presentation I was just at with John Ritch, the director general of the World Nuclear Association. I am not going to have time to, but he made a very compelling argument for why nuclear should be in the mix and what can be done with the waste.

I wanted to go to Mr. Maynard because I was looking forward to the trip to Calgary and to Fort McMurray. I may have to go there sooner than next fall, because it's an area that is very important and one that I'd like to learn more about.

If we're going to deal with climate change and greenhouse gas emissions, it seems to me we have to all get together, all citizens, the manufacturing sector, oil and gas, transportation, you name it--if we're going to be serious about this.

I don't want to pick on the oil sands, but we talked about certain private interests and public goods. In the context of the oil sands, it seems to me that greenhouse gas emissions are a public policy question. Protecting our water resources is a public good. And there are some of the social problems, which I've just heard about tangentially. I wanted to go up there to have a look. They are perhaps more provincial in scope, but they are a public good and we need to be concerned about them.

I was wondering, in terms of the private interests of your member companies, if you've ever looked.... And I don't understand the economies of the oil sands. There are presumably economies of scale when you ramp up, let's say, quadrupling the volume from today. Are there not also some “dis-economies” of scale in the sense of cost pressures and just a shortage of labour, etc.? I'm wondering if your industry would be prepared to have a discussion, a dialogue, on the horrible thought of slowing the development of the oil sands down.

Let me come back to another public good issue, and that is the use of technology. We've heard some of this discussion today. I've been around long enough to know that technology in the head is one thing and getting it working on the ground is another. In terms of carbon dioxide capture and sequestration, in terms of water recycling, there might be a case to be made to say let's slow this thing down to deal with these public interest issues.

We talked about the demand for energy. Yes, but a lot of it is being exported into the U.S., where, I think you could argue, they don't have a really strong ethic in terms of conservation and energy efficiency. Maybe that's changing, but I just put that on the table.

Has your industry ever looked at it from the point of view of your own private interest, let alone the public good that I've mentioned?

[Brian Maynard]

Thank you for the question.

A lot of the answer to your question I believe is in exactly what you said. There are cost pressures. There are human resource pressures. There are supplier and contractor issues, and it is a tremendous challenge right now addressing many of those issues in the oil sands.

Our association and our members fundamentally believe in market-oriented approaches. Let these cost pressures contain the growth. Let the shortage of skilled people contain the growth.

That's not to say there are not valid and legitimate concerns around climate change issues, GHG emissions from the oil sands, about water use and things like that. Those are absolutely within the purview of governments to address on behalf of the citizens, and we are working with governments and stakeholders on those types of issues. We have members now who are recycling 90% of the water they use. It goes through and through and through again. We are looking at climate change issues, and we have been working with governments on this. We believe strongly that the solution to climate change in the long term has to be driven from a technology perspective. In the short term we need to pursue increasing efficiencies.

Earlier Mr. Bevington referred to the utilization of natural gas. We are looking at alternative energies to provide the energy required to produce the oil sands, from gasification of the bottom of the barrels and other technologies. That will have a benefit of cleaning the air but may result in higher emissions, so there are trade-offs as well that have to be realized in the whole issue.

What's important is that, yes, the discussion and the debate is taking place. Market forces will prevail to a certain extent and contain the rate of growth that we see in the oil sands, and there are legitimate debates that we all need to participate in, and are participating in, on environmental consequences. We firmly believe that it is not a “one or the other” choice, that the oil sands can be developed in an environmentally responsible manner, that we can address water challenges, and that we can address GHG emission challenges. That does require, without a doubt, contributions by my members with respect to the development of technology, working cooperatively through economies of scale, as you mentioned, and working with stakeholders to address those challenges, but it's not either/or.

[The Chair, Conservative, Lee Richardson]

Thank you.

That was pretty close guys. Six minutes!

Mr. Lussier.

[Marcel Lussier, Bloc, Brossard—La Prairie, QC]

I have a brief question for Mr. Konow.

You mentioned something that made me bolt out of my chair regarding electricity in the East, that is, we are importers. If you have any statistics on this, tell me the year in which it was so. Which provinces are involved in importing electricity?

The second part is for Mr. Elston.

Nuclear energy does not produce greenhouse gases. I would like to know the nuclear producer’s strategy concerning green energy. Do they want to categorize nuclear energy as a green energy, a renewable energy? To do this, do you want to focus on the production of hydrogen for automobile transportation, or is hydrogen going to be used rather in processing the tar sands?

[Hans Konow]

On the first question, I think you misunderstood me. What I did say, I believe--I hope I said--was that we import energy in the east, that is, oil and gas.

In terms of electricity, just so I'm clear on that, we import electricity as well, but not on a net basis. That is, we bring in electricity off peak and sell it back on peak in areas like Quebec, where we have storage reservoirs that allow us to play that role.

There may be times.... Manitoba, historically, has been the largest exporter of electricity in terms of their system. In 2003 they were a net importer due to water problems. So it is not inconceivable that even in Quebec we could have a year in which we were a net importer--I live in Quebec, so I can say “we”--on a temporary basis. But in the longer term, and in general, in the east we are net exporters of electricity.

So if I misspoke, I hope I've corrected the record.

[Murray Elston]

In relation to nuclear, we really do see ourselves as a green energy source. We have issues with managing our waste, but it's something we have managed very well and have technically discovered how to deal with. We know exactly where each fuel bundle is that has been in any of our reactors, how long it was in, and how long it's been out. So yes, that's particularly true.

We think we can have an advantage in the oil sands in terms of greenhouse gas emissions. There's no question. But that remains to be dealt with under the right business case to ensure that we can be competitive. All those other things we need are things we would like to live up to in the business challenge.

We do need some predictability. We need regulatory certainty, obviously, if we are going to go into those areas. Hydrogen has always been a favourite of ours, because nuclear plants run best and most efficiently when they're running all the time. They lug, so in the daytime, when people are using lots of energy, we're able to produce it. At night, when things generally fall off, we are still much more efficient when we're lugging at a high level. So at those times we could be used to generate hydrogen.

We're very keen to play a strong role in developing the hydrogen economy, moving forward. We provide Canada I think with an ability to participate in that new world. We have great potential in some homegrown companies in that business, and we would be seeing ourselves as a natural partner with those companies. We probably wouldn't want to focus exclusively on developing hydrogen for motive power and other things, but we would sure like to play a significant role in moving to that next technology.

I should say, by the way, that Canada has signed an international agreement. A role is being played by Natural Resources Canada to take us into the next generation of nuclear power generation. I think it's fair to say that we are very pleased in our industry that a long-term view has been taken and that we will play an increasingly important role there.

I'm somewhat concerned that we're not also still at the table with the fusion project, which is now to be located in France. But all those technologies help us to move one step beyond where we are now. I can see a very bright future for our industry, because we played a leading role in it internationally, but also because I think we helped to increase the ability of Canada to access its natural resources in a very profitable way for people right across the country.

[The Chair, Conservative, Lee Richardson]

Thank you. That was very good.

The last round will go to Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Well, I'll ask a very brief question, and again we'll see the answers.

The one thing I saw in the presentation was about the international role and the role with the United States.

We are very tied in with the American economy in our north-south power lines, pipelines, etc. American energy policy concentrates on security, and they have other things. So my question is this: how does the American energy policy and energy market directly impact the ways in which we will plan in Canada?

Each of you have specific industries that will be impacted more than others, so you're going to have different answers. How does it impact Canada? How does it impact our thinking? How does it impact our strategy? Are there specific strategies we should use to exploit the American market? Are there specific cautions that we need to be aware of as we prepare for what could cause us difficulty, caused by our relationship with the United States?

So take it away from there. I think every industry will have a slightly different spin on this one.

[Hans Konow]

I'll make a brief set of comments, first overarching and then with respect to electricity.

Clearly in energy, as with our economy as a whole, our degree of interdependence with the United States market is extraordinary. We can neither deny it nor would it be in our interest to avoid it. It presents huge opportunities and some challenges, because it is a very large market, with a very large appetite, when it comes to energy.

But we shouldn't forget our dependence on the United States for items like food stocks. If you want fresh fruit in the winter, it doesn't come from the Okanagan Valley; it comes from somewhere south of the border. We can't pick and choose in the relationship that we will only share what we don't care about with our partner and expect them to share with us, in terms of the overall optimization of a North American marketplace. So first of all, we have an embedded relationship.

Second, we'll talk more about energy. In terms of electricity, for instance, we're a net exporter of electricity, but a relatively minor one. It's something in the order of 1% of U.S. needs. What we've seen over the last 10 years is an increase in imports to Canada of electricity, some of it on a business basis, as discussed with respect to Quebec and British Columbia—and to Manitoba, to a lesser extent—since they have storage capacity, and some of it is an investment timing issue.

At one point, the electricity systems were managed on a fairly regulated and generous fashion, in terms of assuring adequate capacity. Part of being more efficient is reducing your margin of surplus to the minimum that's safe, so that you haven't over-invested in the system, but never to be short. That's always critical in these systems.

So the regional linkage of electricity markets has allowed us to tap into the resources of large binational, regional markets, which create economic opportunities in Canada, but also reliability and stability benefits. Quite frankly, when it comes to electricity in Canada, it's a relationship that's extremely positive on all counts.

I'll let others talk about the benefits of this relationship in their particular areas.

[David MacInnis]

On the benefits that we see, with the U.S. focus on energy security, getting it from a supplier like Canada provides benefits to all Canadians with respect to job creation, etc. I think there is also an opportunity if you're looking at the issue from a public policy point of view. There are obvious foreign affairs and foreign relations benefits to be had, as well as international trade opportunities to be developed. I've talked about the economic benefits from developing energy, be it the exportation of hydro, the development of natural gas, or what have you.

On the sustainable development front, as I was saying earlier, I think there's an opportunity to leverage the development of technology, for example, to improve energy efficiency and for other sustainable development measures. The Americans have put well over $1 billion into a variety of climate-change-related technology developments. There's no reason we shouldn't do some more active partnering with them.

I see benefits on a host of fronts.

[The Chair, Conservative, Lee Richardson]

Mr. Elston.

[Murray Elston]

The energy program that was passed in their energy bill, which has just come about, has actually driven a whole series of activities in the nuclear sector.

They've looked at coal and nuclear power as being helpful. As the President of the United States said, we need to wean them off their addiction to oil. They have actually put together very strong programs that could be beneficial to us.

As I said earlier, Canada has certainly signed an agreement to work on fourth-generation nuclear technology with the United States and nine other parties so that we can help to develop the new world of energy. It's an extremely exciting prospect for us in that way.

I mentioned sequestration and clean coal technology in the United States. It's not my area of expertise, but I think there is so much activity being generated around it that Canada should have some sense of the importance in playing a role there.

I think some pretty good work is being done in this country, which we should take advantage of. It's not always in terms of what we contribute, but what we can learn by being internationally engaged, particularly with our largest trading partner next door. There are some great synergies that can help Canada and the United States and our populations to become secure together in the continent.

[The Chair, Conservative, Lee Richardson]

Mr. Hornung will wrap it up.

[Dr. Robert Hornung]

Yes. I have one quick comment.

Of course, going along with the United States sometimes poses challenges as well. We need to pay attention to the policy context in the United States.

For example, the United States is quite aggressively pursuing wind energy right now. It looks like the U.S. will install about 10,000 megawatts of wind energy over the next three years. It has implications for Canada because it means we're actually in a situation where the demand for wind turbines is outstripping supply. A lot of those turbines are going to the U.S., and it's now hard for Canadian developers to get turbines in a timely fashion to meet the objectives we've set as a country.

We need to look at the policy framework in the U.S., and we need to make sure our framework is competitive to be able to ensure growth in these industries going forward.

[The Chair, Conservative, Lee Richardson]

We're going to have to wrap it up.

Murray, go ahead.