Natural Resources Committee on Nov. 20th, 2012

[Dr. Tim Weis]

I'm sorry. I missed the title of the study.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

It was a study that came out in 2009 and was called “United States to invest over six times more per capita in renewable energy and energy efficiency than Canada”. There are some pretty interesting numbers in that report. I was wondering if you could touch on some of those.

[Dr. Tim Weis]

Sure. There were a couple of reports that were done. There was that one and I think one other one, either the year before or the year after—I can't remember—but they were ultimately comparing levels of investment in renewable energy and energy efficiency in Canada and the United States. I can't remember—it was a few years ago now that we did them—but compared to Canada at a federal level, for one year I think it was six times and for another year closer to 10 times the level of investment per capita in the United States around renewable energy and energy efficiency.

I think part of it speaks to the fact that we are seeing big growth right now in the United States in renewable energy and energy efficiency. I think there is some uncertainty around how long that growth is going to continue, but it really has become a much bigger market, not only on an absolute scale but also on a per capita scale, than what is going on in Canada right now.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Will you be tabling that report with the committee if you have a copy?

[Dr. Tim Weis]

Sure, I can. Yes.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

That's great.

I know that you also studied at the University of Quebec at Rimouski. There you also studied the development of solar energy in remote communities. What would be the specific federal policies that we could put into place to encourage this industry in particular?

[Dr. Tim Weis]

Interestingly, one of the reasons I went to Rimouski was that at the time it was the only university in Canada that was offering research in wind energy at the Ph.D. level. That was only starting about eight years ago, so it shows that we have been a little bit behind when it comes to R and D in this area.

What we have proposed—and we have proposed it to the federal government several times—is a program specifically for remote communities that would incent this. We were looking specifically at wind, but I think the price of solar has come to the point now that you would be foolish not to include solar in that type of program. It would be modelled after NRCan's ecoENERGY for Renewable Power program, which was a very successful federal program encouraging renewable energy across Canada, but it would have something tailored to remote communities that is specific for their needs. This would mean that there is a capital component, which would help these small communities leverage financing, as well as a production incentive.

I would be more than happy to table for the committee the work we have done on that particular policy.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Liu.

We go now to Mr. Trost for up to five minutes, please.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair, and thank you to our witnesses.

Years ago, when I was in one of my engineering classes, one of my professors talked about why certain changes had driven certain types of innovation for enhanced oil recovery to Canada versus to places in the United States. He talked about how in Alberta there was a centralized place where well-logging information and seismic information and things like that were gathered, whereas in California, where I believe he had done his doctorate, there was no centralized place for such information. That caused problems for smaller companies that wanted to be innovative, because they couldn't find everything they needed in one place.

The other thing I remember seeing a few years ago was a map that was fairly popular in parts of Saskatchewan, in certain circles in Saskatchewan. This map showed that oil development stopped in a straight line between Alberta and Saskatchewan. Now, that map no longer reflects current reality, owing to changes on both sides of the border, including royalty rate changes in Alberta and various other changes in Saskatchewan. Both of those stories illustrate an important point: that political and jurisdictional decisions affect innovation and development.

My question is to CAPP and to PSAC.

I know industries call for subsidies and so forth in the energy industry. By and large, you guys don't. What steps could the government take or what impediments could we withdraw that hold up innovation? Can we do simple things such as the Social Credit did way back, when they made sure that information was accessible in Alberta for junior oil companies to go in, look through the data, and then redrill? What can we do or what can we take away to assist in fostering innovation in industry development?

We'll start here, and then we'll go to our friends on teleconference.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Bleaney.

[Bob Bleaney]

Thank you, Mr. Trost, and Chair.

I would like to follow on with the answer I provided to Ms. Liu earlier that relates to your question: larger-scale test grounds or pilot project work needs to be done to move some of these ideas forward to a commercial stage. That's always the difficult part of the innovation curve—taking laboratory ideas through to commercial projects.

That work was supported by the SR and ED program to a greater degree than it will be going forward, and I think we should continue to look at means or policies to help support that more risky but very important stage of the innovation curve.

On other matters, I might suggest passing this question on to Mr. Stringham, because he can help fill in on that, I think.

[The Chair, Conservative, Leon Benoit]

Go ahead, Mr. Stringham.

[Greg Stringham]

Thank you. Yes, Mr. Trost, I think there are a couple of exemplars of really good practice that need to be enhanced.

As you mentioned, transparency is really key for us. As an industry, we've been standing on this foundation of making sure that we have transparent information available. One of the two examples of that is the core labs. As you mentioned, throughout western Canada, whenever drilling takes place, a core sample is taken and then made publicly available for everyone around, both governments and industry, to be able to use and identify. That really has led to innovation, even with the latest horizontal drilling and hydraulic fracturing for tight oil. All that core has been there for people to go and take a look at and understand at the surface, rather than going out and redrilling every time. That transparency has been really key.

A second example, though, is the oil sands environmental monitoring that the governments are moving ahead with right now. Cooperation between the federal and provincial governments is needed to get that program in place, but then we need to be sure the data coming out of all that monitoring going on right now is readily transparent so that it can be looked at not only by industry but also by governments and the public. We have a good example of that on air quality in Alberta, where it is on the Internet 24 hours a day, seven days a week. We just need to broaden it now with this new program in place to make sure that the transparency is there.

The last one I would suggest is this idea of a technology fund. In Alberta, under the current climate change regulations, a technology fund is collected from the revenues that are part of a carbon levy in place. That technology fund is then rededicated out to solving the root cause of GHG emissions, not just for our industry but for other industries, and in renewables and everything else. That really has been a very valuable aspect of the regulation in place.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Trost.

We go now to Mr. Gravelle for up to five minutes, please. Go ahead.

[Claude Gravelle, NDP, Nickel Belt, ON]

Thank you, Mr. Chair, and my questions are going to be for Dr. Weis and Mr. Cameron. I'd like to start with Mr. Weis, and keep in mind that I only have five minutes. I'd like to give Mr. Cameron a chance to answer the question also.

Some people around Ottawa think there's only one choice between the economy and the environment. We happen to think we can do both. Do you see the economy and the environment as winners for Canadians now and in the future, with investments in clean energy, renewables, and efficiency?

Dr. Weis, would you comment?

[Dr. Tim Weis]

Obviously the two are inextricable. You can't take them apart. They're part of the same equation. I also think the question that Canada needs to ask itself.... We've won the energy lottery at the end of the day, particularly as a country. We have so many resources. I think the question is, what is our long-term plan with those resources and what are we doing with them strategically? What's the long-term investment that we're making as a result of extracting these conventional resources? I think that's fundamentally the question that we need to start wrestling with in short order. How do we leverage the endowment we have in fossil fuels and other resources to create a long-term renewable economy?

[Claude Gravelle, NDP, Nickel Belt, ON]

Would you comment, Mr. Cameron?

[James Cameron]

It seems to me that a good government combines the two without making too much of a fuss of what label to put on their policies, so if you build infrastructure that lasts, that is resilient, that could withstand the risks associated with a natural disaster or that can cope with the sea level rising in coastal cities, you don't need to call that environmental policy. That's just an intelligent way to build infrastructure, knowing the evidence you have about the risks associated with elevated climate change.

Other natural resource issues are associated with access to water. For example, if you build infrastructure that allows you to get good access to water, you can call that an environmental investment or you can call it a sound economic investment. It doesn't really matter. We spend far too much time trading off these two imperatives. Good government always combines the two. It's hard and it takes a particular quality of leadership to cope with complex problems that can't be resolved very quickly.

One of the other things I'm sure about is that if you can build good investments around future infrastructure, you will encourage innovation around the kind of problem-solving that produces value-added businesses in your economy. That makes sense for a resource-rich economy as well as one that's resource poor. Making more from less is a good strategy for any economy, and it requires significant investment and new ways of doing business. That's largely where value is created. I really think a clear combination of the two defines the quality of leadership in business and government.

[Claude Gravelle, NDP, Nickel Belt, ON]

Dr. Weis, of the 12 major industrialized countries, Canada is ranked second-last as far as energy efficiency is concerned. Can you comment on Canada's performance? Why is it so low, and what we can do to improve it?

[Dr. Tim Weis]

When it comes to efficiency, that is definitely one area that we seem to be lagging in. Part of that I think has to do with the fact that we have fairly cheap and abundant energy here and we don't use it perhaps as carefully as we need to.

I think there are key things we could be doing to improve on that, many of which fall within federal jurisdiction. Obviously regulations within Natural Resources Canada regulate efficiency standards. I think that's important work that the federal government has led on and can continue to do better.

Obviously pricing carbon again is going to be an important area if we want to be driving more careful use of these resources, but I think that at the end of the day, it also comes down to a cultural shift: we need to be talking about this more, talking more about energy not being something to be wasted. It is a precious resource, and we need to be more careful how we extract and consume it.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Gravelle.

We go now to Ms. Grewal for up to five minutes.

Welcome to our committee. Go ahead, please.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Thank you, Mr. Chair, and thank you very much to the witnesses.

Mr. Chair, thank you for giving me the opportunity to participate here, since I'm not a regular member on this committee. It's a pleasure to be here.

I have a long question. My question goes to Mr. Weis.

The Canadian Association of Petroleum Producers has stated that the oil and gas industry is the biggest investor in research and development into better ways of protecting the environment, and particularly that the industry is also devoting significant resources to carbon capture and storage as well as to reducing the amount of water used in extracting and processing.

First, given the significant resources that have been put into research and development, are there any kinds of innovative, made-in-Canada technologies that have been sold to international markets?

Mr. Weis, you also mentioned that reverse engineering of Canadian technology has occurred in Australia. I'm wondering whether there are more examples of that.

There was also a comment made by Mr. Salkeld. I think what he said was that there is $12.6 billion in export-related services. How is that related to innovation? Second, can you comment on the impact that these investments have had on employment within the innovation segment of the industry?

[The Chair, Conservative, Leon Benoit]

Ms. Grewal, were all of those questions for Mr. Weis, or just the first two?

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

The first portion goes to Mr. Weis, and there was a small little question to Mr. Salkeld.

[The Chair, Conservative, Leon Benoit]

Very good.

Mr. Weis, go ahead, please, with the answers to the first two questions.