Good afternoon, Mr. Chair, and good afternoon, committee.
My name is Simon Dyer. I'm the policy director for the Pembina Institute in Calgary. The Pembina Institute is a sustainable energy think tank, and my policy research focus is on oil sands development.
The topic of today's hearing is energy security as it relates to the oil sands. The term “energy security” is thrown around with increasing frequency, especially with regard to the oil sands. But it's rare for those using it to actually define what energy security means. It implies, I think, the idea of energy availability, but this is a superficial and inaccurate interpretation of energy security.
I draw your attention to the International Energy Agency, which defines energy security as the “uninterrupted physical availability” of energy “at a price which is affordable, while respecting environment concerns”. Clearly, then, we need to consider economic costs versus benefits of energy and we need to consider environmental impacts of its production and consumption in any definition of energy security.
With regard to the oil sands, then, of course they hold a very large amount of oil, so physical availability is not a problem, but there are both environmental and economic impacts that undermine the extent to which we can say the oil sands contribute to Canada's, North America's, or the world's energy security.
Given Canada's abundant energy resources and relatively small population, when we're talking about energy security I think we're thinking about not so much domestic supply as our security as a supplier of energy. So how do we supply energy in a way that meets global obligations to reduce greenhouse gas emissions and at the same time protect Canadians from the environmental impacts at home?
The world is aggressively seeking cleaner sources of energy, and we should not take it for granted that our historic position as a supplier of fossil fuels will continue in the future, especially as it's increasingly evident that Canada is not doing its fair share to reduce greenhouse gas pollution and is failing to adequately enforce the law around oil sands development.
I'd like to draw the committee's attention to yesterday's editorial in this week's issue of the journal Nature, considered one of the most prestigious scientific publications in the world. It concerns the oil sands. I'll quote from it: It would be unrealistic to expect that we could harvest fossil fuels or minerals without an effect on the environment. No form of mining is clean. But the fast development of the tar sands, combined with weak regulation and a lack of effective watchdogs, have made them an environmentalist's nightmare.
This is not environmentalists saying this; this is the journal Nature. Canada's reputation as a responsible supplier of energy as related to oil sands is being damaged. It's being damaged not because the oil sands have a public relations problem; it's being damaged because development is not proceeding responsibly.
If Canada and Alberta continue to focus on public relations and neglect their responsibilities to enforce existing laws and regulations, the federal government will be exposed to continued legal challenges, the industry will be vulnerable to tougher environmental restrictions in the marketplace, and Canadians will be exposed to economic uncertainty and competitive challenges resulting from tying the value of our dollar to the price of oil.
In October, the Pembina Institute, along with the environmental organizations Environmental Defence and Équiterre, released Duty Calls: Federal responsibility in Canada's oil sands. I want to highlight some of the key findings of that report.
A key finding of the report is that government's math on carbon emissions in the oil sands simply doesn't add up. If expansion of the oil sands proceeds as planned, the oil sands industry will outspend its proportional share of Canada's carbon budget under the government's current target by a factor of 3.5 times by 2020 and by a factor of 40 times by 2050. That's even assuming a very optimist application of carbon capture and storage technology. The oil sands sector must do its fair share to reduce greenhouse gas emissions along with the federal government's commitments.
Our study also showed that we need to acknowledge and minimize negative economic impacts of oil sands development and address petro-currency impacts on Canada's manufacturing sector. We need to protect water quality by setting and enforcing environmental limits to meet the requirements of the Fisheries Act. We need to protect wildlife by enforcing the Species at Risk Act for woodland caribou and working with Alberta and Saskatchewan to create a regional network of protected areas. And we need to set binding caps on air pollution according to the Canadian Environmental Protection Act.
Until Canada acts in these areas, we cannot fulfill our role as a responsible, secure supplier of energy, and this will hinder Canada's ability to develop and market our resources. The governments of Alberta and Canada are over-promising and under-delivering environmental management in the oil sands.
I also want to talk a little bit about some of the predictions of how much oil the world needs. When discussing oil sands, Natural Resources Canada makes a habit of placing development of the oil sands in the context of future global energy demand as assessed by the International Energy Agency. We heard similar comments this morning from both Suncor and CAPP.
The department consistently misuses the IEA's analysis, including the recent testimony of Mr. Mark Corey before this committee. Mr. Corey noted that the IEA projected that global energy needs “will increase at about 1.5% per year until 2030, which would be an overall increase of about 40%”. But both NRCan and Mr. Corey based this premise on the “reference scenario” of the IEA's World Energy Outlook, which the IEA actually notes on its website is most definitely not a forecast of what will happen but a baseline picture of how global energy markets would evolve if governments made no changes to their existing policies and measures.
Furthermore, the IEA notes that the reference scenario is actually based on a scenario that takes us to greenhouse gases in the atmosphere of a concentration of 1,000 parts per million and a temperature rise of six degrees. This would almost certainly lead to massive climate change and irreparable damage to the planet. In other words, it seems that NRCan is hedging on a bleak, unlivable world that fails to deal with climate change as a place where we maximize bitumen production.
Not only is NRCan describing the reference scenario as a projection that somehow supports the case for oil sands development, but they also fail to acknowledge that the reference scenario is in direct contradiction to Canada's commitments under the Copenhagen accord, which Canada has endorsed, and which would set the objective of limiting the increase in global temperature to 2°C.
So I think it's fair to say we need to start being honest about the inconsistency between projected oil sands expansion and Canada's commitments to reduce greenhouse gases. As I've stated before, the math does not add up, and ignoring this fact does not address the looming problem. In a world where we need deep reductions in greenhouse gas pollution, there is no energy security without climate security.
I would say, though, that now I need to agree with Suncor: there's a growing consensus that there's a need for a national discussion on energy and the environment. The stakes are simply too high around oil sands development, both economically and environmentally, for development to proceed as it is in the current piecemeal fashion without a coherent vision and a plan that demonstrates how oil sands development can fit into a clean energy transition.
A U.S. journalist said to me last week--referring to the disconnect between Canada's Copenhagen target and its increasing oil sands emissions and the continued downplaying of evidence of pollution from the oil sands--that it seems like the oil sands are defying gravity up there in Fort McMurray.
I think that sums up what we need to do in terms of addressing the issues coherently.
Thanks very much for the opportunity to present today, and I look forward to your results. Thank you.