Evidence of meeting #41 for Natural Resources in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was community.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Francis Bradley  Vice-President, Policy Development, Canadian Electricity Association
Peter Mackey  President and Chief Executive Officer, Qulliq Energy Corporation
Melissa Blake  Mayor, Regional Municipality of Wood Buffalo

10:20 a.m.

Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

Does the price point look as if it's practical?

10:20 a.m.

President and Chief Executive Officer, Qulliq Energy Corporation

Peter Mackey

It's substantially better for mini-nuclear over hydro.

10:20 a.m.

Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

Okay. That's interesting.

Mr. Bradley, do you have any comment on the development of these mini-nuclear reactors as power supplies?

10:20 a.m.

Vice-President, Policy Development, Canadian Electricity Association

Francis Bradley

I don't have anything specifically on those, but generally, we're seeing a lot of innovation taking place broadly, not just in the electricity system around the world but also here in Canada.

An example of a really innovative project that may have application elsewhere is a project that Newfoundland and Labrador Hydro has been working on, specifically for remote communities served by diesel. This is a project called Ramea. What they've been doing is integrating wind, hydrogen production, and diesel. It's an example of an innovative approach. In effect, when the wind is blowing, and it's producing more electricity than required by the remote community, excess electricity is used to produce hydrogen. Then when the wind isn't blowing, the hydrogen is used to produce electricity.

What we've developed here, as an example of some really innovative technology in Canada, is a system for controlling that. It's something that probably will be adaptable in terms of a control system for any variety of different types of remote communities and different types of generation.

10:20 a.m.

Conservative

David Anderson Conservative Cypress Hills—Grasslands, SK

It fits into your earlier discussion about a smart grid, and you looked like you wanted to react to that.

10:20 a.m.

President and Chief Executive Officer, Qulliq Energy Corporation

Peter Mackey

Yes, I do. Thank you.

We've actually put a proposal in to the federal government for a similar project. We've partnered with WEICan out of Prince Edward Island's PEI Energy Corporation. They have a prototype working for a hydrogen/wind district heating diesel system already in place in P.E.I. We've expanded that into a large scale project for Cape Dorset within Nunavut. We've made a request to the federal government for development funding for that, moving it from a prototype to reality in the community.

As you've indicated, the difficulty with wind in any community is that if tie it into a diesel system and the wind dies off, you don't have sufficient diesel spinning capacity and you lose power in the community and have to reboot back up. What we were looking at there was the creation of hydrogen storage, then using the hydrogen within the diesel-hydrogen generator sets. Excess wind from that also goes into a heating system, so the district heating system for the whole community is fed off of all of that.

The benefit of this type of system is that it provides stability. You're not worried if the wind dies off or if you don't have sufficient diesel-generator sets on to provide the heat for the communities, because you're storing that heat from the wind.

10:25 a.m.

Conservative

The Chair Conservative Leon Benoit

Thank you, Mr. Anderson.

Mr. Calkins, you have up to five minutes.

June 5th, 2012 / 10:25 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Thank you, Chair.

Thank you very much for coming in here today. Mr. Bradley, I would like to ask you a few questions first.

I spent a little bit of time in the Northwest Territories when I was a much younger man and I was impressed with the vastness of the area up there and the large distances between the communities. There are a lot of issues pertaining to the Arctic and subarctic regions when it comes to development.

It's one thing to build a dam in the Rocky Mountains and then have your transmission lines going around. We can put transmission lines anywhere; it's amazing what we're able to do. We go through all kinds of terrain, crossing rivers, and so on, and it's great stuff. But there are some challenges in the Arctic and subarctic if you're going to do this. There's permafrost, and there are other types of issues.

For the benefit of the committee, could you speak to some of those challenges, and to the nature of the environment up there that might make it difficult to do some kinds of larger developments, especially when it comes to transmission?

10:25 a.m.

Vice-President, Policy Development, Canadian Electricity Association

Francis Bradley

Sure.

If you look at some of the developments that have taken place in remote locations, for example in the James Bay region, and look at the challenges that they had there in developing large hydroelectric power in that region, and multiply that by four, that's basically what you're looking at.

When you get up farther north, those problems are just further exacerbated in terms not simply of just running the project, but in fact building the project. There are challenges of moving equipment, of building access to those facilities, and things as simple as Mr. Mackey mentioned earlier, such as not even having cranes in some of these areas. First off, there is the challenge of getting equipment up to these locations, and then there is the whole issue around the geography itself, which is clearly more challenging than it would be in the south.

On the other hand, the benefits are significant. While we were talking earlier about whether or not it's economical to do some of these projects, specifically on a strict business case basis, we need to look beyond that. We need to look more broadly at overall, holistic impacts. It isn't just a question of the cost, for example, of putting in a hydro facility in the north and there being a reduction in the cost of diesel.

There's a greater benefit, not just to the customers who would be getting supplied with a source of more reliable and cheaper power, but there's also a benefit to the airshed as a whole if we're moving away from diesel. So that isn't just a benefit to the people in the north, it's a benefit to Canadians and, in fact, to people all around the world.

10:25 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

Thank you very much.

Mr. Mackey, I'm going to ask you a quick question just for my own personal amusement.

When I was a fishing guide on Great Bear Lake—and that's what I was doing in the Arctic when I was a younger man—we had a fully self-contained lodge and a couple of diesel electric generators, and it was noisy. We had a noise abatement wall, but given the confined space.... Do we have any issues of noise or any of those air quality issues from diesel generation in any of your communities ?

I can't imagine what the size of these diesel generators would be to power communities of 7,000 people; they must be absolutely huge. Given the fact that around December 21 there's no natural light at all, there must be a huge demand for electricity in those particular seasons, probably the coldest and hardest seasons to keep diesel generators going. Could you speak to some of the quality of life issues that might affect people who rely on diesel generation?

10:30 a.m.

President and Chief Executive Officer, Qulliq Energy Corporation

Peter Mackey

There's a variety of things there.

One, within the design that we utilize for the diesel power plants, obviously, we're looking at reducing the noise as much as possible. As well, we have to look at the exhaust systems and particulates and ensure that they aren't brought in or ingested by any other building nearby. Typically, it's a struggle. We want the power plant in the community because of the ability it gives us to take heat from it and heat some buildings and reduce fossil fuel consumption, but then we're also sticking it in a community. We have the noise that's there.

Speaking as a person who is responsible for electricity, I like to hear the sound of the power plant. When I don't hear it, then I'm nervous as heck because it's 40-below and we have trouble.

10:30 a.m.

Some hon. members

Oh, oh!

10:30 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

You know there's a problem.

10:30 a.m.

President and Chief Executive Officer, Qulliq Energy Corporation

Peter Mackey

You're right.

But these power plants within the communities are second nature. They've always been there. The sound isn't an issue.

10:30 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

It's like having a train in town. Everybody gets used to it after a while.

10:30 a.m.

President and Chief Executive Officer, Qulliq Energy Corporation

Peter Mackey

You do, yes.

The people in the community only become alarmed when it's quiet, and then they know there's an issue and they had better go and check what's going on.

So it's normal. It's everyday life. It's been that way forever.

10:30 a.m.

Conservative

Blaine Calkins Conservative Wetaskiwin, AB

I have a question for both of you.

During this study of northern development we've heard a lot about some of the issues pertaining to the whole regulatory process, when we hear from mining companies, when we hear from those who are seeking to make investments. They would be no different from your organizations.

If I go to the handout that you have given us, Mr. Bradley, I see this chart, going from left to right, from planning, through the environmental assessment process, to permitting, and the follow-up. We have so many different streams that have to be managed, depending on what you have to do, whether it's the Canadian Environmental Assessment Act, the National Energy Board, the Nuclear Safety Commission. The list here is quite exhaustive.

What percentage of the costs of any new development or any new exploration of such comes from just navigating the bureaucracy and paying for all of the requirements, the legislative requirements, that the Government of Canada has in place?

10:30 a.m.

Conservative

The Chair Conservative Leon Benoit

Mr. Calkins, your time is up.

So, gentlemen, perhaps you could give extremely short answers, please.

10:30 a.m.

Vice-President, Policy Development, Canadian Electricity Association

Francis Bradley

Okay.

The cost of the regulatory process will be different for every single project, so there isn't a specific percentage. Different types of projects have different types of costs.

The other point, though, is that this chart only deals specifically with our industry and the federal government. There are often also provincial processes that take place. Particularly with respect to the environment, they often duplicate each other. What we're doing federally is duplicating a process that is taking place at the provincial level.

10:30 a.m.

Conservative

The Chair Conservative Leon Benoit

Okay, thank you.

We go now to Mr. Julian, for up to six minutes, please.

10:30 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Thank you, Mr. Chair.

I'd like to come back to Ms. Blake. Your Worship, I just wanted to clarify a few things.

First off, because the federal government has not confirmed funding for the airport expansion at this point, does it mean that the municipality is actually borrowing the additional funds that are required for the full cost of the airport expansion? I ask because that work has already been undertaken, has already started. So I imagine that if the federal government is not there, you're borrowing to finance its portion.

10:30 a.m.

Mayor, Regional Municipality of Wood Buffalo

Melissa Blake

That is what's happening. It's not under municipal jurisdiction. Last year we created something called the airport authority, which gives them independence in seeking out financing. That's where we've come in as a contributor. But, honestly, the rest of it will be by debenture borrowing.

10:30 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

That does put additional pressures on the municipality, does it not?

10:30 a.m.

Mayor, Regional Municipality of Wood Buffalo

Melissa Blake

I would suggest not. They have a business case that justifies not only the need for it but also its financial viability. If the economy takes a turn like it did in 2008 and 2009, there may be some risk associated with the debt that they're carrying for the duration of that loan. The concerns that they have are about what expense or burden would be borne by the travellers themselves. So in terms of being able to get some relief on the capital side of things, it just makes their business plan even more secure as they go into the future.

10:30 a.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Putting it another way, if the federal government were involved it would make a difference to getting the project through to realization?