Natural Resources Committee on Nov. 25th, 2010

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

Thank you, Chair.

Thank you to the witnesses.

It's interesting to see the beginning of a “consensus”, if that's the right word, about the need for this discussion at a national level around energy security, which, from your testimony today, includes the ideas of not just production of energy but also the environment and the economy writ large.

The question I have, very specific to you, Mr. Dyer, first, is that we just heard testimony from the energy groups that a 40% increase is expected and we have to expect it as a reality. We're going to need 40% more of this stuff. Then in your testimony today, you said the IEA itself says that scenario leads us to a six-degree rise in temperature globally.

Is that correct? Am I hearing you right?

[Simon Dyer]

Yes, that's correct. The IEA makes it very clear that their baseline scenario is not considered the desirable scenario and shouldn't be considered a forecast. So it is extremely irresponsible to say that the world needs a 40% increase in energy when, clearly, the IEA says governments can bring many policies in place to not need that.

The difference in numbers between the do-nothing scenario and actually introducing progressive energy policies is 20 million barrels a day. That's the difference in oil consumption for the world.

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

To Mr. Core just for a second, one of the elements of an energy security discussion is around environmental security as well, and you represent landowners. I believe you sent around to members of this committee your access to information request. Is that right?

[David Core]

Yes.

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

So this was a request to the regulator, the National Energy Board, which, when we raised concerns about what I think you called “a conflicting and competing” role they take on, the government tends to get on their hind legs and argue they're a fantastic regulator and they're excellent.

In this ATIP request you have here, I note that there are 343 blank pages.

[David Core]

That's right.

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

How is it the public, the landowners whom you represent, are meant to feel confident in a regulator that, when you ask for information, sends you hundreds upon hundreds of pages of nothing?

[David Core]

I think it made us feel very insecure that the regulator is impartial and transparent. We wanted to know who was in the room when regulations were created and developed that imposed certain aspects of responsibility and liability on us.

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

So that was your request--just to understand who was involved in the process of passing liability from abandoned pipelines onto landowners. That's the security question you were looking for?

[David Core]

That's right.

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

And what you got back was...?

[David Core]

Three hundred blank pages.

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

Three hundred blank pages.

Dr. Keith, you talked about climate security. Even though we have some decades, this is always worrisome to those of us trying to affect policy, because it can put off decisions till later. How is Canada doing right now in addressing the question of climate security in terms of government policy and government investment in the non-carbon-emitting sources of energy? How does Canada rate against the others in the OECD, for example?

[The Chair, Conservative, Leon Benoit]

Professor.

[Dr. David Keith]

It's doing very well. Overall, I'd say that over the last decade--or more--the Canadian parliaments have pretty much failed to grapple with this issue seriously. Nevertheless, some work has been done.

It's easy to imagine that the Europeans are doing much better, but in fact they're still building coal-fired power plants. In some cases there's more talk than action there as well.

But I think we need to focus on what we should do, and there's no question that we could do enormously more than we're doing, both in terms of strategic investments in clean energy and in terms of transparent regulations.

I'd say one crucial thing. Our job in this generation on this topic is both to begin to make cuts and to begin to do what economists call price discovery, trying to understand what things really cost, because most of the big cuts are going to happen after our generation. To do that, we need transparent policies that as much as possible have governments set a clear price and get out of the way.

We have the opposite of that. We have a myriad of little independent policies that incent wind here, and biomass there, and carbon capture and sequestration here, in a way that is utterly non-transparent.

So if 15 years from now our children look at what happened, they will find it extremely difficult to figure out what the real cost-effectiveness of different measures were. I think if you care about and believe in the power of free market solutions to problems--that doesn't mean the free market runs unfettered, because it doesn't do that in anything in modern democracies--then that means we should do something that looks a lot like a clean carbon tax or a clean cap and trade and get out of the way.

Right now we have a series of policies that make it essentially impossible to understand the fact that putting solar on rooftops in Ontario costs more $1,000 a tonne of carbon, whereas putting wind power in Alberta maybe costs $200, and we have so many complicated incentives we have no way to see that signal through the noise.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Cullen.

Mr. Anderson, you have up to five minutes.

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

I would like to build on that last comment.

We did some work here, a couple of years ago, on some of the alternative energy forms. We had someone from Germany on a video conference talking about their feed-in tariff program. I think one of the things we discovered from that is if we want to do something like that, we're going to have to look at a 400% or 500% or 600% increase in utility costs to the average Canadian. I'd say that's pretty much impractical.

Do you have any comments on that? Everywhere we look, these things are possible to do, it's just that the consumer is going to have to pay a massive cost to do them, and most people do not seem to be willing to do that when they're unsure of what they're hearing in terms of the science and those kinds of things.

[The Chair, Conservative, Leon Benoit]

Professor Keith.

[Dr. David Keith]

Thanks.

I would take issue with two things there.

It's certainly true that what the Germans did was extraordinarily expensive and produced little obvious benefit. There were literally tens of billions spent developing solar PV technologies in Germany, which had a minuscule impact on actually cutting emissions.

By many measures, that was an extraordinarily ineffective way even to get to cheap solar. Many observers of global energy innovation regard that German program as a real failure. Indeed, of course, Germany and other places are now backing off.

But it is not true to say, simply not remotely true by any kind of estimate from major EPC firms or major energy companies, that you would have to increase the cost to consumers by factors of anything like four.

The costs of decarbonizing the electricity supply, if you did it in a cost-effective and simple way, are...increase the busbar costs by less than a factor of two, and that means increasing the cost to consumers by something more like 20% or 30%. If you do that slowly over 20 or 30 years, that effect is quite small. It's in the order of 1% of GDP, comparable to the kinds of costs we incurred from the U.S. Clean Air Act, which had benefits that enormously exceeded costs.

So if we focused on things that were actually cost-effective in a simple way, it is simply not true that we need to make enormous, unaffordable increases in the cost of energy to solve this problem.

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

I think I need to take issue with that, because in the testimony we've heard it's been consistent that the consequences of these programs are a massive increase at the consumer level.

Just to reflect on what you said about Germany backing away from what it's been doing, we have tried as a government to avoid some of the mistakes that have been made by other governments. I think that—

[The Chair, Conservative, Leon Benoit]

You have a point of order, Madame Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I am sorry to interrupt this discussion, Mr. Chairman, but we must vote on a motion. The meeting ends at 1:00 p.m. and I must leave as I will be speaking in the House.

If the mover is in agreement, can we postpone the discussion on the amendment to Tuesday?

[The Chair, Conservative, Leon Benoit]

Mr. Anderson just has two minutes left in his questioning. We'll get right to the motion. Hopefully we can deal with it without a lot of discussion.

Let's go back to Mr. Anderson.

Just complete your questioning, please.

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

I just wanted to make the comment that we've tried to avoid some of the mistakes that other countries have made. In our biofuels programs, for example, we've tried to avoid the mistakes that the Americans have made with their two or three different runs at the biofuels industry. It's been very expensive for their treasury.

I guess I'm interested to hear you say that Germany shied away from this, because they were was presenting this as something that was very successful at the time, when we heard about it.

I want to go back to another question. From your content, from what you've presented today, you basically have to express opposition to all carbon-based energy in order to be consistent with what you've said today. Is that your position, that carbon-based energy is the problem? That seems to be what you've said here. It's not just the oil sands; you say it doesn't matter what the technology is, it's not going to help.

Is that your position, Dr. Keith, that we need to be opposed to carbon-based energy in all forms?

[Dr. David Keith]

I don't think it's a matter of position; it's a matter of basic physics and conservation of mass. We cannot put gigatonnes of carbon in the atmosphere and expect a stable climate, period.

You could still use carbon-based fuels if you put the carbon back in the ground, with carbon capture and storage. It's not clear that we have to do this immediately. There are hard value trade-offs about how much we value our grandkids versus ourselves. There's no simple answer about what to do.

But the statement that we can't keep transferring carbon from deep underground, the geosphere, to the biosphere is not a matter of opinion, it's just a matter of fact. It's a fact that's uncomfortable and a lot of us like to avoid, and the industry spends money trying to confuse, but it's a fact nonetheless.