Natural Resources Committee on April 15th, 2010

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

All right, I'll wait until...

Yes?

[Mark Corey]

I would simply like to add that we will see that this is truly a Canada-wide program, meaning that it is present everywhere in the country. And we have had considerable demand throughout Canada.

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

I will see if this is the case later on, during your presentation...

As a Quebecker, I would say that Quebec has gone to a great deal of effort to switch to electric energy—I know that we are spoiled, because we have a lot of this. For many years we had provincial programs aimed at improving energy efficiency, changing thermostats, switching from oil to electric heating. So I was saying that, as far as we are concerned, the demand is less important—but you will be answering this question later on.

How do you assess the results of these programs? Some of these programs must have been in existence for many years now. These are not programs that were launched two or three years ago. I would imagine that you assess the results on a yearly basis, before budgets are drawn up. So my second question is: is that how it goes? In your opinion, which program has resulted in the greatest energy savings?

[Carol Buckley]

With respect to the energy efficiency programs, there are a number of methods of evaluation. One is the formal evaluation conducted by a third party. Five of these are under way at the moment, on equipment, transportation, buildings, houses, and industry programs. The results of these will be available in a few months.

On an annual basis, we have a business plan that breaks down our four-year targets year by year. We track the progress of the programs on an annual basis against those annual targets. In fact, as the director general I review the targets with all of my managers at mid-year and at the end of each year in the four-year cycle in order to see that programs are on track and to make any corrections, if anything is not on track. Those are the two primary ways in which we conduct evaluations of the progress of the programs and their effectiveness.

The last part of your question referred, I believe, to which would be the most effective program.

Mainly, the most effective of all these programs.

The programs are all doing quite different things and using different measures. An incentive program is very different from a training program in terms of the rate of intervention with the energy user, for example.

One of the most effective tools overall is the regulatory instrument, because it provides a prohibition in the economy for the least efficient performers to be imported or transferred across borders. These programs, which carry our standards and regulations, are extremely effective. We have been operating them since 1995, and they have been through many different evaluations. Those evaluations have always been very positive, demonstrating net present value financial savings impacts to Canadians as well as the emission reduction impacts associated with those regulations.

Thank you.

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

When you talk about regulatory tools, the image of a refrigerator or some other item of this type springs to mind. Is that significant? Do you have examples? Are these trucks, for instance?

[Carol Buckley]

Thank you for the question.

The Energy Efficiency Act currently covers about 40 products. These include all of the large major appliances in the home—fridge, stove, dishwasher, clothes washer and dryer—as well as many other products: light bulbs, motors, commercial refrigeration, commercial air conditioning, commercial boilers and furnaces, transformers.

We would be happy to provide the list to the committee, if that would be interesting, because I do not have the list entirely in my head.

At the end of the fiscal year, in March 2011, our regulations will cover 80% of the energy use in the home and 80% of the energy use in a commercial setting, so they really cover a broad range of energy uses.

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

Thank you.

[The Chair, Conservative, Leon Benoit]

You still have a minute. Go ahead.

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

You have seven carbon capture and storage projects. You have no doubt read many of the criticisms on this issue, saying that this is at the exploratory stage and that it is not clear what results it will produce. Do you not feel that this is a rather hefty investment in undemonstrated technology?

[Mary Preville]

Thank you very much for the question.

Carbon capture and storage has been proven to be a very safe and reliable technology at smaller scales. What is recognized now is the need to significantly scale up, to large-scale, and that is what the present demonstrations are endeavouring to do.

There is a lot of evidence in Canada with storage of other substances in geological formations such as natural gas, carbon dioxide itself, and acid gas reinjection. We have close to ten years of experience with injecting carbon dioxide into the Weyburn-Midale fields in Saskatchewan for enhanced oil recovery.

So we ensure there are appropriate monitoring and evaluation systems in place with appropriate risk mitigation factors. Also, a key consideration is the site selection and the knowledge of the geological reservoir.

[The Chair, Conservative, Leon Benoit]

Merci, Madame Brunelle.

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

Go ahead, please.

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

Thank you, Chair.

Thank you to our witnesses. Welcome, and it's nice to some of you back.

Looking over your initial presentation, the department seems...I want to say the word “happy”, but at least encouraged, by the program to this point. Am I making a fair assessment? You didn't present to us today a great set of concerns, challenges, and failures. It was more that this has been a good program for NRCan.

Yes? Am I characterizing it right?

I don't think you have it with you today, but could you provide the committee with what has been spent since the year 2000 on the following technologies: renewable energy writ large, CCS, wind, solar, wave, and tidal? Does the department track the breakdown of that?

[Mark Corey]

Yes. In fact, we can get back to you and get details. We do track all of our programs and we have got them broken out. We can provide that information.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Corey.

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

Thanks.

Does the department also track the cost per tonne of greenhouse gas reductions achieved through each of those investments?

[The Chair, Conservative, Leon Benoit]

Ms. Buckley.

[Carol Buckley]

Thank you for the question.

Yes, we do indeed track the cost per tonne, and a number of different methodologies are used to assess cost per tonne. You can take the cost of the program and simply divide it by the emission reductions, the tonnes. You can take the cost of the program to the government and to the user and develop it that way. The method we prefer is one in which you discount the tonnes. That is, you treat it like a financial statement, like a net present value, and you discount the value of the tonnes over time.

I don't have a cost-per-tonne analysis for you here, but you can look at publicly available information and run a cost-per-tonne analysis yourself. Or, as we continue our own internal analysis, we would be happy to come back and share that information.

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

That's what's curious. At the UN level, at the United States level, when you look through these programs one of the things that you quickly come to is that they'll give you a chart that says of the program they run right now, this is the gradient of cost: this is the most expensive, this is the least expensive. Usually energy efficiency comes out quite strongly. Other newer technologies, like CCS, come out as very expensive because they've not been proven.

Along with what has been spent since 2000, will you provide at least the second and third analysis that you mentioned? I think for Canadians trying to understand this, the simple amount of money put in and the amount of carbon dioxide tonnes reduced is the most intuitively correct analysis. That's just, we put in a billion, we got out so many tonnes, and these are all the different departments and programs that achieved that.

Is that possible for you to give to the committee?

[Mark Corey]

Again, we'll undertake to get back and provide to you what we have.

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

Great.

On the renewable power program—this is the incentive we give to renewable energy, to be created—90% of all the wind capacity, for example, in Canada has been created since the inception of the renewable power program. So it's had an obvious effect on the marketplace. It's not being continued, as far as we know.

What led to that conclusion from the department?

[Jonathan Will, Director General, Energy Resources Branch, Department of Natural Resources]

Thank you for the question.

The program continues until March 31, 2011, but the program is not fully subscribed at this moment. Specifically--

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

Sorry, just to get the term right, when you say “not fully subscribed”, are not enough folks coming forward and asking for the money, or have you not spent it all yet?

[Jonathan Will]

We haven't spent it all. There are some applications.

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

My understanding from the minister is that what's in the pipe right now will take care of the rest of the funds. The applications that you folks have in hand will deplete the rest of the renewable power incentive.

[Jonathan Will]

It may. That depends on the applications, whether they are ultimately successful.