Natural Resources Committee on March 5th, 2009

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

That goes back to my initial comments about government doing one thing and then pulling back. The government announces in this recent budget a whole bunch of green environmental energy aspects. Then it cuts the wind subsidy out from under a lot of projects that were hoping to get off the ground.

I have a question around the feed-in tariffs. We've seen that this has been very successful in Europe. We've talked about best practices, where communities were able to go to the bank with a feed-in guarantee from the utility in hand, borrow the money, and then own, as a municipality, some of its own power production, oftentimes green power production. Why do we not do that in Canada?

[Joanne McKenna]

I think that might be a question for all of you.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Ah, good; I'm glad.

Is it not a utility's decision to allow that exclusively?

[Joanne McKenna]

If you regulate it, it's challenging.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Is it simply from the provincial government, then?

[The Vice-Chair, Liberal, Alan Tonks]

Mr. Cullen, Mr. Ydreos would like to address that.

[Mel Ydreos]

If you look at the green energy bill, which was just introduced by Minister Smitherman a couple of weeks ago, it does actually envision that system. The Ontario Power Authority right now is looking at what will be the price signal, what will be the guarantee. So Ontario is definitely moving that way.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

To go back to my friends from Hydro, we have a lot of folks poking around northwestern British Columbia, where I live--you've mentioned Bella Coola and Haida Gwaii--looking for hydrocarbons. If you want to drill, the federal government's been highly supportive of the contentious idea of drilling in the Hecate Strait, which is the windiest and waviest place pretty much on the planet. Has any effort been made by Hydro or the province to map out the green energy of Canada? We have lots of maps all over the place about where coal, gas, and oil exist. Have we mapped our green potential?

[Joanne McKenna]

That's a great question.

I know we have this in B.C. We actually undertook, I think in 2002, to make a map of all the green or renewable resources in B.C. We did talk to the federal government. I think they were very interested, particularly Natural Resources Canada, in looking at that across the country. For one, it could help enable development. If people knew where some of the resources were, they could focus some of their attentions there.

The danger is that this mapping is done at a very high level. It's not like putting in a pin that shows this is where the resource is. We need to balance that and manage the expectations with the development, but I think it's a useful tool.

[Douglas Stout]

Perhaps I could add to that.

On the green resources mapping, I know we tend to focus on electricity, and looking for opportunities to generate electricity is slightly different. But if we look at these systems, when we talk about these things we're talking about integrating them with solar, with geo-exchange. Every piece of ground has some green potential to it.

I think that's the idea behind this. The whole country has those capabilities to various degrees, right across the board. You can map that together with opportunities that require electric generation. That is a slightly different piece of it, but it's about knitting them all together to come up with a solution.

You mentioned the oil sands. When you look at the full cycle of greenhouse gas emissions, from production to end use, and start measuring things that way and looking across, then you start to optimize the decisions, I believe.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

That's very interesting.

Thank you.

[The Vice-Chair, Liberal, Alan Tonks]

Thank you, Mr. Stout, and thank you, Mr. Cullen.

We will go to Mr. Trost now.

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

Thank you, Mr. Chair. It's good to see you up there.

[An hon. member]

It suits him, doesn't it?

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

It does. He looks good up there. If the other chair continues to skip out, maybe we could consider a permanent replacement here.

[Some hon. members]

Oh, oh!

[An hon. member]

Flattery will get you everywhere.

[An hon. member]

You're on the record, Mr. Trost.

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

I'm on the record. What can I say?

We compliment the other chair on his hair more often, though, so.... That's an inside joke.

To the witnesses, thank you for being here today.

I'm going to change a little bit of the orientation of the questions and move to some of the other things. I don't get quite as overjoyed or excited as some of my colleagues do when people talk about reduction of greenhouse gases and things of that nature. There have been jokes that the only thing green I've ever had when I've come to committee has sometimes been my tie, and even that has been fairly rare. I tend to be a little bit more concerned about the bottom line, good capitalist that I am.

My underlying question--I'm playing the devil's advocate a little bit here--is that if this is such a good idea, all the integration and so forth, why would we as a federal government even need to push it? Shouldn't it be self-evident on a bottom-line basis for municipalities, developers, etc., to do an integrated energy system? Yes, it may take a little bit more capital, but at the end of the day, wouldn't it be more profitable for them? In terms of price signals, they'll take it from the market and go from there. Why should we give it a little more push?

As well, can you demonstrate to me that this is financially the best use of resources?

Both groups can take it away from there.

[Douglas Stout]

I'll go ahead and leap into the fray and see what happens.

The projects that I noted in here, including others we have, were done with private developers. Their concern was looking at how they could take this development over time, sell it to someone who's going to live and work and own a business there, and make it economic. These things do stack up with the cost of other energy forms. When you look at the cost of using natural gas or electricity stand-alone, and look at these integrated systems, they are economic--although not on every scale; there will be spots that make sense and some that don't in terms of pure economics.

We found that most people would like green, providing it doesn't cost more than the other options out there. There's no doubt about that. But we do see, when we look at this through the Quest initiative, that there are other spots that make sense. They don't make sense everywhere. They're not all perfect. You have to look at this not as a bright-line test of economics; there's a range of guessing on where the world will be 20 years from now in terms of the cost of energy.

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

These are private sector people looking at it and crunching the numbers. Do you find it as much when municipalities are involved? We have a few examples here. If I'm a municipal politician, there's a bit of a risk with this. At the end of the day, if I can keep taxes low.... Incumbents get re-elected at a higher rate in municipal politics than in our business here. It's easier to do. Do they demonstrate, on that broader municipal level, that integration as well, that return of value to taxpayer dollars?

[Joanne McKenna]

I'll take this on to a certain degree. I want to make a couple of comments.

One, in my personal view--I won't speak for B.C. Hydro on this--the federal government's job is to enable. Part of enabling, I think, is to be strategic on how you use your funds. That means it might not be for every technology.

I think we have to look at what technologies are closer to commercialization than others. There is a spectrum. I know it might depend on who you talk to, but generally speaking, there is a recognition that solar will tend to be further out, as will fuel cells, but some of the biofuels and biodiesels and district energy systems are not that expensive.

I think one challenge is the payback. Developers and municipalities--in particular, municipalities--have a five- to seven-year payback period. They're bound by that. If they go to seven years, they have to have a referendum. Or they do in British Columbia; I don't know if that's true everywhere.

So that's a constraint. That's a barrier. For agricultural land, to develop a greenhouse and have a generator to capture the carbon dioxide and put it into the greenhouse, it means you have to change the agricultural land reserve zoning in B.C., and maybe in other jurisdictions. I think it highlights some of the barriers. Some of it is funding, and we do need some money, but I think it has to be strategically oriented. It is going to be different across the province. You can't give it to wind and think it's going to work everywhere, because it won't.

Again, I would re-emphasize that it's not one size fits all. It requires a longer-term view. I know that's challenging when you're in a four-year--

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

What four years are you talking about?

[Some hon. members]

Oh, oh!

[Joanne McKenna]

Yeah, well...12 months.