Natural Resources Committee on Feb. 8th, 2011

[Elizabeth Dowdeswell]

Full Stop.

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

So it's more than just the way it's communicated; it's the system itself.

[Elizabeth Dowdeswell]

That's right. We need a better system.

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

You sound quite optimistic about the potential to improve the system. You say the working parts are there.

What's concerning to me is that when Dr. Schindler or others raised concerns, those concerns were often dismissed, not just by oil companies but also by the current government, as being crackpot science or not legitimate. But in your report, and I'm quoting, it says that “a statistically sound decision-making process that can allow for adaptive management in a rapidly changing oil sands environment does not exist”. The report goes on to say, “It is not producing world-class scientific output in a transparent, peer-reviewed format and it is not adequately communicating its results to the scientific community or the public.”

You sound as if you confirmed that the monitoring of the projects was not sufficient, was not transparent, and was not statistically accurate. There is not just a perception of doubts; there are legitimate doubts over the numbers coming in over the water quality.

With respect to the pace of development, which you also recognized, your committee didn't make a recommendation on whether projects should continue to be approved without an adequate means of monitoring them. You say that projects are overrunning sites that are being set up to monitor the water quality. The sites are being destroyed by new projects that weren't even envisioned when you set up the site in the first place. Is that true?

[Elizabeth Dowdeswell]

I think the view of the panel would be that it was not their mandate to determine the future of the oil sands.

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

Right.

[Elizabeth Dowdeswell]

We were asked to look at what would make a world-class monitoring system, and to assess whether or not we had one. It was our judgment that we do not.

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

That's helpful.

Mr. Marushack, we've heard from a number of energy companies, oil companies, that there is a need for a Canadian energy security strategy. There isn't one strategy governing this country in energy development, use, or export. Does your company confirm that need?

[Joe Marushack]

I can only tell you what we're doing. We're trying to provide information. We're trying to participate on panels. We're trying to put our message out that we think we need a system that encourages lots of different developments, and we think we need a system that's transparent and competitive between this country and other countries.

I would say that we're participating in providing the information so that energy strategies can be made by those governments.

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

Certainty is a big thing to your company. You're a large company. You've got $152 billion in assets, $142 billion in revenue this past year. You make long-term plans.

The minister recently confirmed a policy statement by the Prime Minister saying that Canada's policy is not to export raw bitumen to jurisdictions with lower environmental standards.

Are you aware of this policy?

[Joe Marushack]

I am aware of the actual amount of production that is upgraded in this country, and I'm aware of the amount that goes to the U.S. and is upgraded there, or refined there. Those are the things I'm primarily aware of.

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

My question is specific. The Prime Minister himself, and his minister in charge of this file, has said it is Canadian policy not to export raw bitumen.

We had the Alberta Heartlands Industrial Group in front of us. They had a report commissioned by the federal and provincial governments that showed a loss of revenue to government and a loss of jobs resulting from refining outside Canada, taking raw bitumen and exporting it, whether it's to the United States or to other countries.

So there is the economic loss to Canada and the apparent policy that we are not exporting to anywhere with lower standards, which, I assume, includes China, Korea, and the Asian states. I would think this would have an influence on whether you involve yourselves in an oil sands project that has raw bitumen exports. These are major investments your company is making.

[Joe Marushack]

Yes, and I believe that 75% of the bitumen is upgraded right now in this country. The rest goes to the U.S.

There is extra capacity in many of those refineries right now. They're not at full rate. They're capable of processing heavy crudes, much like we produce here. So it makes sense to have some of the bitumen go down to be processed in those facilities, at least until the others are fully up to speed.

My concern with labour is that there's not enough labour right now. In the projects we're working on in the oil sands, there is much opportunity, a lot of aboriginal opportunity. We actually have trouble getting enough skilled labour.

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

Then I'm confused why.... One would imagine that in an energy security strategy for Canada, labour would be one of the questions and environment would be one of the questions that would be built into such a strategy. I'm surprised that you're not more enthusiastic, as some of your competitors are, about having a Canadian energy security strategy that would include some of the concerns that you're.... It just doesn't feel as if there's much of a plan.

Former Premier Lougheed and others have said, “We lament that we didn't have much a plan for this, that it was too rushed.” Now we're hearing that the environmental monitoring that's meant to be put in place doesn't meet the capacity of what already exists, let alone what is proposed; that you're running out of workers and don't have enough workers to get the job done.

All of these pieces seem to be in want of some sort of coherent leadership from the federal and provincial governments.

I'm surprised that you didn't just answer yes to my question about the need for such a strategy.

[The Chair, Conservative, Leon Benoit]

Go ahead, please.

[Joe Marushack]

All over the world we live within the regimes that are put into place. The government puts in the regulatory regime, the environmental regimes, the requirements. We evaluate those and then we develop the projects accordingly under those plans. So we will—

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

If there were one, you'd work under it; that is essentially what you're saying.

[Joe Marushack]

We will provide information to it, we'll try to provide what we think is the right direction on some of those things that help with the developments, and then we will live under the existing laws, yes.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cullen.

We go now to the government side, to Mr. Anderson, for up to seven minutes.

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

Thank you, Mr. Chair.

I always find it a little ironic that my NDP colleagues oppose oil sands development but then really want to protect the jobs that are there, apparently. They think they need to support both, if they're going to support one.

Ms. Dowdeswell, you said that you had strong support for a better system from everyone.

Do you get the feeling that there's a sense of willingness to improve? Was that genuine, that there is a real interest in improving?

[Elizabeth Dowdeswell]

Yes.

We had, first of all, absolute cooperation from anyone we asked to speak with or receive information from. In most of the sessions, when I was talking to people, I ended by asking, “So how can I help you?” This rather surprised them, but the point of my message was to know what it was I could recommend that would help them either remove roadblocks or pave the way for a more certain future, either economically or environmentally. We didn't differentiate; we didn't put one against the other. That wasn't our view at all.

Many people felt damaged by the lack of trust and confidence of their citizens, and they particularly felt angry at the view that was being held in many places internationally. They genuinely asked how they might deal with that, saying that it might be wrong and they might not believe it, but wondering what it is that is actually going to allow them to be proud and stand up and say, we have a world-class system in place.

When I hear that discussion and debate, I see that there is a genuine desire for people to be part of it. Now, when it comes to the specifics of any program or plan or design, certainly there will be argumentation; there will be debate back and forth.

But if you ask me the straightforward question—were people genuine?—I would have to say yes.

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

Thank you.

Mr. Marushack, Mr. Cullen was just talking a little about exporting bitumen and the products from the oil sands.

Is there a need for a pipeline to the west coast, in your company's opinion?

[Joe Marushack]

I believe it would be helpful to have more outlets for the product we make here, yes.

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

I assume that means both expansion and/or a new pipeline?

[Joe Marushack]

Yes.