Natural Resources Committee on June 17th, 2010

[Robert McLeod]

We've done some significant research and significant analysis. We see the Mackenzie pipeline as a basin-opening project. The main benefit from the pipeline would be the increased exploration once the pipeline was going to be built because the industry would see an opportunity to drill for oil and gas and be able to transport it out if they find anything.

The pipeline project would be a $16.2 billion project. The benefits and opportunities would be tremendous. In the construction of the pipeline, there would be something in the neighbourhood of 220,000 jobs created during the construction life. In the Northwest Territories, there are only 42,000 people, so we would need to get a lot of the labour supply from outside the territories.

Our analysis is that the southern provinces would be the main beneficiaries. Ontario would see its GDP increase by $5.5 billion. Alberta would see the biggest benefit, with its GDP increasing by $9.1 billion. The federal government would collect $86 billion in taxes.

When you look at the resource potential of the Northwest Territories and the Beaufort, they're very significant. So the project would be very beneficial for not only the Northwest Territories, but for Canada, in our view.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Thank you.

I would like you to comment. I don't know if you were here for the last hour or were able to hear the previous testimony, but we had some fairly strong testimony about the confidence the contractors have in the safety regulations and the present improvements that have been made in the safety situation. He talked about the fact that they are required to have two barriers in place in the wells, but that one of them seems to have been removed in the gulf, and that may be a contributing factor to that whole exercise.

He also made the comment that there's “a lot more engagement” at the regulatory authority in Canada than they saw in other countries. I'm just wondering if you have any comment on that.

He was very strong in his presentation that the present safety situation and requirements are adequate if they're adhered to. Do you have any comment on that?

[Robert McLeod]

Very similar to what he said, not knowing fully what happened in the Gulf of Mexico, until we know that for sure... But I've been saying it myself that in Canada we have a stronger regulatory requirement to follow. We feel there is more oversight, and at least in the Beaufort we are probably the only offshore jurisdiction where there is a requirement for same-season relief well drilling, although the main challenge is the ability to do it because of the short drilling season and the ice conditions.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Anderson.

For the second round we go to Mr. Regan for up to five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chairman.

I want to say first that we on this side noted that in your role as chair you were unable to resist showing your party colours, but I will say in this instance it was funny.

[The Chair, Conservative, Leon Benoit]

Thank you. That's unusual.

[Geoff Regan, Liberal, Halifax West, NS]

It was humorous this time, other times not so much, but here it certainly was funny.

Speaking of your grade 9 science teacher, Minister and Mr. Bevington, I don't know what he or she would say, but I'm sure if my grade 9 science teacher saw me delving into scientific matters, he'd be both concerned and alarmed--and amazed. Hopefully he's out playing golf or going for a hike or something today, and in good health.

I'm going to turn to Professor Hawboldt. Let's go back to this question. You've now been appointed the chair of the National Energy Board. Congratulations. I think it's a pretty good salary.

[Dr. Kelly Hawboldt]

Thank you.

[Geoff Regan, Liberal, Halifax West, NS]

You've talked about mitigation control and countermeasures. It's not clear they're available at the moment in terms of arctic drilling. You talk about the fact that it requires research. I guess the question is, in view of the need for this sort of stuff and the lack of some of these things, now that you're chair of the NEB, wouldn't you say that drilling should be suspended until these things are worked out?

[Dr. Kelly Hawboldt]

I'd say again--and I'm not waffling here, but I don't have all that information in front of me. I don't know how much research has been done per se in oil under ice floes. I confess I haven't worked in that area. So I'm not trying to dodge the question. It's just that at NEB I'd have a bunch of information in front of me and I'd be able to assess that. I don't have that, so I don't feel I can answer the question.

Really, you're not paying me as NEB, so I don't have to answer the question today.

[Voices]

Oh, oh!

[Dr. Kelly Hawboldt]

It's really just out of ignorance more than anything else.

[Geoff Regan, Liberal, Halifax West, NS]

So much for that pay cheque, I guess.

[Dr. Kelly Hawboldt]

I don't have the information in front of me, and I'm sure a lot of documentation is available that I just haven't seen.

[Geoff Regan, Liberal, Halifax West, NS]

In the previous hour we heard from Professor Gail Fraser, who is from York University's faculty of environmental studies, about a concern with access to data. I'm wondering if this is an issue you've had. I don't know if you've sought data from either the offshore petroleum boards or from the NEB, and if it has been a problem for you. She is saying she can't get access to basic data in relation to environmental matters and in relation to what studies are done of seabirds, etc., where there are drilling areas.

Have you had to try to do any of that to get information?

[Dr. Kelly Hawboldt]

Yes, I've needed access to data sometimes, more in the produced water, so more when the platform is already producing and it's having impact on the environment.

I haven't had a problem. The oil and gas industry, at least in Newfoundland and Labrador, has a fairly good relationship with the university. It could be because of the type of data I'm looking for.

What Gail is looking at, from what I know about Gail's work, would be more biological and environmental effects monitoring data, and I honestly haven't looked for that. Any time I've been involved with the seabird side it was with Phil Montevecchi, and those are the studies they've done independently of the oil and gas companies.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

[The Chair, Conservative, Leon Benoit]

Mr. Bagnell, for one short question.

[Larry Bagnell, Liberal, Yukon, YT]

I have just one short point.

Bob, you made a great point that there are no ports or resources in the Beaufort right now for cleanup, and in fact they're using 8,000 boats in the gulf right now.

The Exxon Valdez caused a lot of damage, obviously. We just found out that the Russians are sending two tankers this fall through the Northeast Passage, and we've been asking whether there are cleanup plans if a boat has a problem in the north and we haven't had any answers. So you can rest assured that we're going to be pushing for the federal government to have a cleanup plan in that respect.

I don't know if you want to comment on that.

[Robert McLeod]

Yes, cleanup and oil spills are always a concern. We all know that the ice conditions are changing. There is likely more traffic through the Northwest Passage. We're even seeing cruise ships going up north. So certainly that is a concern.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Hiebert, you have about three minutes. Go ahead, please.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you, Mr. Chair.

My question is for Professor Hawboldt.

We've heard from other witnesses about the methods used to try to clean up the oil spill in the gulf—booms to skim the oil, burning in situ, and chemical dispersants—but few people have mentioned something that you did, even just briefly, which is the use of biological methods for cleanup. I've heard references to the use of bacteria. I'm not exactly sure of the biological or chemical process, but can you elaborate on that at all for the committee as to how that would work and what technologies are available in that area?

[Dr. Kelly Hawboldt]

Onshore, it's very well extensively done. If you're going to remediate oil-contaminated soil, or even surface water contaminated soil, you can either use the naturally occurring micro-organisms and then add nutrients, things such as nitrogen, and aerate it; just give it enough food so that the micro-organisms can grow and start breaking down the hydrocarbons. All they do is break it down to, hopefully, CO₂ and water, but usually it's a partial breakdown and then some other microbes take over. So it's a biodegradation process that usually occurs over anywhere from weeks to hours to years.

Offshore, in the saline environment, it's a little bit different because you can't contain it, or if you can, it's limited containment. There hasn't been as much research on the biological side offshore because of that fact. There is the whole natural biodegradation that occurs anyway. That's why they add the dispersants, to increase the surface area so that the microbes can attack it. The heavier the oils get, the more difficult it is for the microbes to break it down. The naturally occurring micro-organisms are going to occur anyway in the marine environment, but if you want to somehow enhance it, it's much more difficult, because if you want to add nutrients or some kind of medium to enhance the microbial growth, it's really hard to do, because you add it and it just gets dispersed into the ocean.

So there is much less study offshore, but it's quite common onshore. Does that answer your question?

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Yes, it's helpful. It's certainly informative to have that level of understanding.

What is your relationship with the oil and gas industry in Newfoundland? Through the faculty of engineering, do you work with them on projects? Are you in research? Is this an area of your expertise? I'm just trying to make the link.

[Dr. Kelly Hawboldt]

I'm not a consultant. We do research in offshore oil and gas. Sometimes the oil and gas industry is a partner in that they've put funding through PRAC or some other organization, and sometimes we just do independent research.

So some of the things we're doing on produced water is just research we're doing independently.