Natural Resources Committee on Dec. 7th, 2010

[Alan Tonks, Liberal, York South—Weston, ON]

Thank you for that, Mr. Potter.

My question is for Ms. Krause.

I hope you don't take exception to the notion of conspiracy, because in your paper you also point out that those organizations and foundations are also investing in what has been considered part of the strategic reaction to concerns about fossil fuels, and that is solar, wind, tidal, and so on. Those same organizations are investing in it.

Does that not somewhat ameliorate your thesis that there is such a huge balance towards the oil sands that it is in fact mitigating against the overall economic and sustainable development objectives that have, in the past, driven Canadian policy on the environment, recognizing that there are huge issues with the tailings ponds and the use of water and the leaching into the aquifer, and all of those things?

Given what you have heard and what you have experienced with so many different organizations that are attempting to be part of that sustainable development equation--and there are many variables in that equation--does it not somewhat ameliorate your thesis that rather than a conspiracy, it's a search for balance, and it's a very democratic and objective-driven pursuit, and that activists and all have a role to play?

[The Chair, Conservative, Leon Benoit]

You have about a minute to answer that, Ms. Krause. Go ahead.

[Vivian Krause]

I agree that activists have a role to play. They keep government and industry on their toes, and rightly so. I have more than a decade of working in the United Nations and funding activists. I've been one myself.

I think, though, that on all sides of the equation--in government, industry, and activism--the ethics are really important. We need activism that's grounded in transparency and in truthfulness. Sometimes I think that when criticisms are levied against our industries, and when they're fair, and when they're true, then we need to say so. We also need to say when things that are said are untrue.

I don't think issues should be raised that are fronts for other issues. In this particular case, I think what we're seeing is that there are multiple issues. There is more than one interest at play here.

It's very simple to raise wild salmon as a concern or to raise environmental issues as a concern, but we need to realize that there's more to it than that. I think we need to think outside of the port, too, and think of the global ramifications.

Banning exports in the name of marine conservation is not going to go unnoticed. If it's about marine conservation, then there are many places in the world where money could be spent. It raises questions for me that hundreds of millions of dollars are being spent here, and far less is being spent in other parts of the world.

[The Chair, Conservative, Leon Benoit]

Thank you.

Thank you, Mr. Tonks.

We go now to the Bloc Québécois. Monsieur Pomerleau, you have up to seven minutes.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you, Mr. Chair.

Thank you everyone. I concur with my colleague. We have heard some excellent presentations today from individuals who come from very diverse backgrounds.

Mr. Potter, you said the time had come to ask some solid questions about innovation. I quite enjoy the name of your organization, Alberta Innovates - Technology Futures. As far as the name goes, it's quite extraordinary. You talk about the long term. You say that we should avoid thinking about the next election and focus instead on the many other elections to come if we truly want to consider Canada's energy security.

Much has been said here about oil in all its various forms. This country has vast oil resources, but it also has other forms of energy derived from wind power, tidal power, geothermal power, which is widely used in Iceland, and solar power. I was in Gibraltar recently and saw fields covered with solar panels generating electricity for homes. So then, there are other types of energy.

Do you not feel that aside from energy produced from oil, there is not a great deal of research being done at this time on other forms of energy that could be used, such as CO2?

[Ian Potter]

Thank you for the question.

I'm in Alberta. I obviously work in oil sands. I work in oil, but I do a lot of work in renewables. To me, it's not necessarily about the source. I need an end product. I need electricity. I need something to run my car. Where do I get it from? Where am I? I'm a fan of investing in all forms, depending on where you are and what you actually need.

I think wind is a very good source. There are some limitations with regard to when the wind blows. Where the wind actually is strong, for example, in the province of Alberta, is down in the southwest. It's not practical to have long-grid transmission losses to actually get the wind energy up to the oil sands, for example, because it fluctuates. There are problems with the grid and the way the grid is managed and the harmonics injected into the grid.

If I look at Canada as a whole, I can't think of one energy form we have that can't be used effectively. So I agree. I look at the International Energy Agency's statistics on energy investments by the governments of Canada, federal and provincial, and I look at how they have morphed over the last 30-odd years. You can see swings. Different groups have different reasons. They'll say we're going to have bioenergy as a topic today and oil as a topic for tomorrow, and you can see the swings. Nuclear is there as well.

My only concern is that we don't do what I would call “flavour of the month” research. Research has a long-term agenda, normally. If I take it cradle to grave, from an idea in a university to effective field implementation, if you want, in oil sands, you know, it takes 15 years. You need that long-term agenda. If I switch it on and off every three years, I'll never get to the actual mission and the actual end prize of actually doing it. You do need consistency.

So I come back to the provincial groups. I come back to groups such as the National Research Council that can weather the different regimes within the governments and actually do the right things in a long-term, sustainable manner.

But I'm an advocate of all forms of energy, for the right reasons in the right areas.

[Roger Pomerleau, Bloc, Drummond, QC]

Still on the same subject, Ms. Krause, there are some things in your report that I don't quite understand. As you know, the Americans need our oil. US companies come to Canada to invest and some Americans criticize the use of this oil for other reasons. They are within their right to do so.

You stated that at some point, these people wind up painting themselves into a corner. Don't you think that if companies spend large amounts of risk capital improving their techniques, conducting research, developing new procedures and so forth...At some point, these companies have invested so much money in this venture that they have in fact “painted themselves into a corner“ and can no longer consider developing other forms of energy. That is not their role either, but governments have a stake in this. So then, at some point, everyone finds themselves “painted into a corner“, and things are at an impasse.

[Vivian Krause]

I totally agree with you.

[Roger Pomerleau, Bloc, Drummond, QC]

That's a good answer.

[Vivian Krause]

If I understand what you are saying, the industry is improving—and we want that—but activists are still protesting. If there is a valid reason for demarketing oil, then alright. But if there is no valid reason to do so, then it has to stop.

[Roger Pomerleau, Bloc, Drummond, QC]

That is your opinion.

[Vivian Krause]

Yes, it is.

[Roger Pomerleau, Bloc, Drummond, QC]

You are asked to testify in forums like this one to denounce that which, in your opinion, does not constitute a valid reason. In that respect, it's good.

[Vivian Krause]

I raised the issue and I tried to identify...The key thing is finding out whether there is a valid reason for demarketing. Is there any sound scientific basis for these types of campaigns? If there is, then we need to consider ways of improving the industry. If there is not, then we have to ask ourselves why these campaigns are being waged.

The goal is to get at the truth. Are there valid reasons? I'm not the person... This isn't a question that only one person can answer. It comes down to science and technical expertise. That is what we need to consider.

[Roger Pomerleau, Bloc, Drummond, QC]

I see.

I have nothing further, Mr. Chair.

[The Chair, Conservative, Leon Benoit]

We'll go now to Mr. Cullen, for up to seven minutes.

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

Thank you, and thank you to our witnesses.

First, to Ms. Inman, in trying to understand energy security, one of the questions we raise is what is the role of the federal government? And saying those words sometimes in Alberta can get you into a lot of trouble. What is the role of the federal government with respect to energy? There is a certain constituency that gets really nervous.

Yet we've been hearing consistently from the oil companies, many of them based in Alberta, saying “We need the federal government to play a role”, and some suggest a stronger role around the question of energy security.

Your group and the industry that you represent is with regard to the capture of carbon sequestration. Is the lack of a carbon price a factor in the decisions that get made in your specific industry, that Canada has no carbon price that we know of right now? We're sort of waiting on the U.S. Congress. That is what the current minister tells us. What's the resulting uncertainty in your industry?

[Jessie Inman]

The lack of a carbon price is the number one reason why we're not capturing carbon dioxide right now, yes, absolutely. In Alberta we have a price of $15 a tonne, but this doesn't go anywhere near creating incentives to companies to capture carbon dioxide.

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

The role of the federal and provincial governments when creating incentives in the early days in northern Alberta and the tar sands was complete. There were tax incentives. There were all sorts of industry groups set up with government to enable that industry to exist because up until that point it was just too expensive to get bitumen to oil. That was the technological barrier.

Mr. Potter, is that true?

[Ian Potter]

Yes.

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

So the role of the federal government in energy at that moment for Alberta was, I would suggest, significant in enabling the creation of the industry that exists today.

Is that correct, Mr. Potter?

[Ian Potter]

That's correct.

[Jessie Inman]

I have a comment on that, which is really important. If we go back even further than that and look at the role the federal government played when we put in the infrastructure for the existing oil and gas industry in Alberta, that was put in by the federal government. Why shouldn't the federal government help us put in some of the infrastructure that's required to take that carbon dioxide and move it about?

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

I follow you to a point on that argument. Oil is $90 a barrel again today. On the price point, even with carbon capture, the Canadian public is going to wonder why would that cost not just be internalized.

I go back to my point about pricing carbon. Shell has already started to price carbon internally. They've said they're going to put a $40 a tonne price into their future plans. Why should the public have to pick up the cost of capturing that carbon on behalf of oil companies, which, for all intents and purposes, are doing very well right now and have been for some time?

[Jessie Inman]

From my perspective, I don't think our company is asking for the government to make a long-term commitment to subsidizing the capture of carbon dioxide, but there is a gap at the moment. Even if we are using that carbon dioxide for enhanced oil recovery, there is $1 gap between the cost of capture and getting it to that enhanced oil recovery production, because enhanced recovery is not just straightforward. Not every reservoir is perfect for recovery, so it's a hit and miss game.