Evidence of meeting #43 for Natural Resources in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was water.
A recording is available from Parliament.
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
Right. And you say you don't use any potable water at all in....
President and Chief Executive Officer, Laricina Energy Ltd.
As we started, we had some surface water that we used for drilling. But we use subsurface or non-potable water for our operations, and then move to recycle when we go commercial.
Conservative
Conservative
Dick Harris Conservative Cariboo—Prince George, BC
Interesting.
About a month ago I saw an apparatus that took the liquid drilling mud and actually turned it from a liquid waste to a solid waste and kept the water aside. They could dump the solid waste much easier. Have you seen that? It was quite a rig.
President and Chief Executive Officer, Laricina Energy Ltd.
I haven't seen that one directly. But I do know, in certain areas, that we also, through the drilling programs.... In the areas that have oil sands, they'll clean the sand from drilling so that it can be construction material. People are very much focused on using all the pieces as best they can.
Conservative
Paule Brunelle Bloc Trois-Rivières, QC
Thank you, Mr. Chairman. Good afternoon, Mr. Schmidt.
In your presentation, you focused a great deal on the fact that you want to meet energy needs while providing positive economic impacts balanced with environmental performance. So, you are doing research. You also talked a lot about the University of Alberta.
I myself met academics in Alberta last summer who are doing research. It focuses to a large extent on carbon capture and storage projects. We know that the federal government has invested a lot of money in that area and has provided considerable assistance to companies. Some are of the view that these projects have not really proven themselves. So, people are doing research and trying to do their best. I believe that is also your intention.
However, what concerns me is that we are taking action at a time when the damage has already been done. Are you doing this research to try and find new ways of extracting fuel, to develop a different extraction method which will have less of an environmental footprint and cause less environmental damage?
President and Chief Executive Officer, Laricina Energy Ltd.
Sorry, could you repeat the last part of your question? It cut out.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
You are taking action to set up carbon capture and storage programs—in other words, to reduce greenhouse gas emissions; but is your research focused primarily on extraction, on the stage when you are actually extracting the gas? Are you able to do that differently so that process causes less pollution?
President and Chief Executive Officer, Laricina Energy Ltd.
Yes. CCS, or carbon capture and storage, is at an early stage, and it is an expensive technology. You're seeing the testing of that development now under way through a number of operations. So you're right.
Can we be more efficient? I think the discussion this afternoon was around whether we could be more efficient so that we're not creating...or the amount of carbon is reduced. That's the focus where we are. If we can apply the addition of solvent to steam effectively, we will produce less CO2 right at the beginning. And that is our objective. We think it is an approach that will allow us to have an impact sooner. CCS is an area that is clearly under development. But for us as a company we are very much focused on producing less.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Separating the tar from the sand requires a great deal of energy. According to what I have been told, the choice that has been made in Alberta is very much focused on nuclear energy. Is that true?
President and Chief Executive Officer, Laricina Energy Ltd.
Nuclear energy would be challenging if you were to use it for steam. It is very hard to transport steam over large distances. It's a possibility for delivering electricity to the grid, but that's certainly at a scale I've never looked at or can give much of an opinion on.
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
I see.
We have heard a lot about oil refining. Some workers told us that it's too bad that refineries in Canada are being shut down, because the refining operations…
Are you not receiving the translation? Is it all right now? Do you have the sound?
Bloc
Paule Brunelle Bloc Trois-Rivières, QC
Workers told us that oil refining is now being carried out in the United States. We are building big pipelines and sending oil to the United States. We aren't processing it in Canada. Is that true?
Do you see anything wrong with that? In any area, it seems to me that having a finished product is more profitable for the country than having someone else do the refining and seeing refineries shut down their operations here.
President and Chief Executive Officer, Laricina Energy Ltd.
The value of a refinery is driven by its location. Refineries that are close to consumption generate good returns.
The challenge in Alberta, for example, is that we are so remote from the consumer in delivering the product. We export the crude to the U.S. rather than finished products because they are more efficient and it's more cost effective to do it there. There are more refineries in eastern Canada because they are close to the consumer, and that's when you have a competitive advantage.
Bloc
Roger Pomerleau Bloc Drummond, QC
Mr. Thomas-Muller, as you know, we had the same relationship problem in Quebec with the Aboriginal people that you are currently experiencing with respect to all of this.
In order to build the large hydroelectric power grids we have in the Far North, we had to sign very specific treaties with the Aboriginal people, called the James Bay Agreement. We signed that agreement with the Crees, the Attikamek and the Inuit.
The main principle behind that is that we are aware that you can't do anything on your neighbour's land. So, to begin with, the Government of Quebec and the other nations sat down together and recognized each other as nations. So, four nations signed the agreement together. Since then, we've slowly been able to build what we wanted to build after discussions—in other words, how everything would be divided up and what we would do with it.
Based on what you said in your introduction, is it your sense that you are being treated the same way and that there is recognition of your specific territorial rights?
Tar Sands Campaigner, Indigenous Environmental Network
On a point of correction, I think Quebec was successful in building one-tenth of what was originally proposed under the leadership of Ted Moses. That was hardly reflective of where the plans were going back in the day, when the big fight ensued between James Bay and the Province of Quebec.
Quebec is a very different government from the Province of Alberta. They don't even respect first nations jurisdiction or recognize it. This is one of the reasons you have a situation in Athabasca where consultation is happening by the companies versus the federal government. There is virtually no consultation between the Province of Alberta and first nations.
Conservative
Conservative
Devinder Shory Conservative Calgary Northeast, AB
Thank you, Mr. Chair.
Even though Mr. Thomas-Muller chose to use the words “tar sands” instead of “oil sands”, I am pleased to see that all witnesses today realize that energy security in Canada is very important. They also realize the important role that oil and gas play in this. I thank them very much for realizing that.
My question is to Mr. Schmidt from Calgary, Alberta.
First of all, I welcome you to Ottawa.
What are some of the elements of Canada's fiscal regime that you see have been helpful for companies like yours that are looking to attract capital? What can be done to improve Canada's oil sands as an attractive place to invest?
President and Chief Executive Officer, Laricina Energy Ltd.
I think the discussion earlier was on stability within the tax structure. Change always causes a challenge with respect to maintaining competitiveness within the tax structure that exists. The support the government gives for minerals, whether it's mineral exploration or oil and gas exploration, provides an opportunity for companies such as ours to drill and explore. We talked about the Grosmont project. The support, through the tax structure, for those developments, whether it's minerals or oil and gas, is important during the exploration phase of development.
Conservative
Devinder Shory Conservative Calgary Northeast, AB
Do you see foreign investment as helpful to the oil sands? How does this capital help projects like yours?
