Natural Resources Committee on June 5th, 2012

[David McGuinty, Liberal, Ottawa South, ON]

If you frame it in economic and dollar terms, can you carve out a projection for this committee on what the northern Canadian energy needs will be for the next 25 to 50 years?

[Francis Bradley]

We can dig into some of the work that we've done previously and get back to the committee with that information.

[David McGuinty, Liberal, Ottawa South, ON]

Can you do the same thing with respect to circumscribing what we call the oil sands? Are you in a position to advise this committee, or help us understand, what the energy needs will be, given the rapid pace of expansion in the oil sands according to a lot of the testimony we heard from Her Worship—which is very revealing in terms of pace? Do you have anything that could help us understand how much juice we're going to need, how much energy we're going to need, in that region over the next 25 to 50 years?

[Francis Bradley]

At the association we have not done anything specific with respect to the energy requirements for the next 25 to 50 years.

[David McGuinty, Liberal, Ottawa South, ON]

Have you seen anything out of the federal government—Natural Resources Canada—or the Alberta government? Is there some place we can go to locate what the projected energy needs going forward will be?

[Francis Bradley]

I would suggest speaking to the project proponents. They would likely have done that sort of work.

[David McGuinty, Liberal, Ottawa South, ON]

The companies that are exploiting the oil sands? Okay.

Your Worship, have you come across anything in your travels and in your work? Do you have a projection to help us understand how much energy is going to be required in your immediate area going forward?

[Melissa Blake]

No, I'm afraid I don't. I know that increasing the capacity coming into the region is an important thing. In the past, we've actually had a number of operators with cogeneration facilities, who actually take care of their needs that way. Some are burning byproducts in their processing to create the heat they need. I know, as we get into the steam-assisted gravity drainage type or in situ types of development, their needs are going to vary dramatically.

I think the previous suggestion about working with the individual proponents is important. But we have something in the community called the Oil Sands Developers Group. If you contact them, they will probably have an overarching perspective, which could give you the answer you're looking for.

[David McGuinty, Liberal, Ottawa South, ON]

Okay.

So from your planning perspective.... What I heard throughout your testimony this morning was that you are struggling to keep up with the pace of development.

[Melissa Blake]

As a community?

[David McGuinty, Liberal, Ottawa South, ON]

Yes, as a community.

[Melissa Blake]

As a community, it's things like housing, road capacity, health care, schools—

[David McGuinty, Liberal, Ottawa South, ON]

Right. You made some very important points about the need for some sort of institute to monitor both environmental and health effects; you've talked about the notion of localizing immigration and customs in your region, which I think would unprecedented in Canada, as I don't think we've ever seen that before for very large development projects. You've also talked about expanding the airport, about infrastructure and roads, and I'm sure the list goes on and on.

Let me put a question to you right now as the person on the ground who's there and struggling to manage these realities. Is the pace of development too slow, too fast, or just right?

[Melissa Blake]

I have long been an advocate for making sure that whatever we're doing in oil sands development, the community keeps pace with that. We're still short of land and we're still short of road capacity at the largest point. We've made huge advances in a lot of the planning during the more recessionary times. As we move forward, if we continue to.... I couldn't even put a dollar value to it. Is $25 billion a year the right number? Is $100 billion in investment a year the right thing? I can't identify that. All I can tell you is that if you're bringing in 10,000 new people to the community, you'd better have 3,000 new houses at the ready.

[David McGuinty, Liberal, Ottawa South, ON]

You're not getting that, are you?

So the pace of development then, we can conclude from your testimony, is too fast.

[Melissa Blake]

It has been too fast in the past, yes.

[David McGuinty, Liberal, Ottawa South, ON]

All right.

[Melissa Blake]

But we have remedied some of that.

[David McGuinty, Liberal, Ottawa South, ON]

So when former Premier Lougheed says that we should stop here and take stock, we should not only look at the effects on the ground in the immediate vicinity of the expansion but also, for example, at what's going on in Washington today, where the Americans are now focusing on shale gas and are talking very aggressively about converting much of their energy grid and system to natural gas. When the Chinese are finding massive shale gas deposits in the southeast of China and talking about double tracking a pipeline to the industrial heartland of China, wouldn't that have a bearing on the pace of investment and development in the oil sands?

[Melissa Blake]

I think the biggest...[Inaudible--Editor] comes from the cost of the commodity, the value that can be received from the development, whether it's profitable and the extent of that profit. The goal and the demand are not diminishing.

Right now we're producing about 1.5 million barrels a day. As we continue to experience demand for the product, we would probably be best served to capitalize on what those opportunities are. We're constrained in our opportunity to access markets outside of the region. As you see debates raging on about pipelines—east, west, north, south, wherever they end up going—those things will have a more significant influence over the pace of development, I suspect.

[David McGuinty, Liberal, Ottawa South, ON]

To what extent has there been serious discussion in your region examining the possibility of constructing and building a nuclear power plant?

[Melissa Blake]

There have been trial balloons floated. It doesn't give people a warm, fuzzy feeling. I'm not one who has an opinion one way or the other. I think the unfortunate incident in Japan has really put a damper on it. When you have countries like Germany eliminating nuclear, it doesn't seem there will be a huge appetite left.

[David McGuinty, Liberal, Ottawa South, ON]

In terms of the most pressing issues, then, just to recap for folks who are following, what are the top three? Given the pace of development, which you've just acknowledged as being, frankly, too fast, what are the top three challenges you're facing on the ground?

[Melissa Blake]

They're access to land, improved transportation, and the labour supply that will be constrained in the future....

[David McGuinty, Liberal, Ottawa South, ON]

Have you examined the possibility of asking the project proponents and the companies operating in the oil sands to pick up a larger share of this?