Evidence of meeting #79 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 lng.
A recording is available from Parliament.
Conservative
Economist, Author, As an Individual
—gasoline prices in the United States average $3.50 a gallon, an all-time high, and yet you say that oil prices are declining? Well, I'll grant you, they ain't $200, but they're moving up.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Okay.
I'll just move on to my questions, then, and I'll go to—
Conservative
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
First, I'd like to tell Mr. Brown that an Angus Reid poll done in February 2013 said that 60% of people in the Lower Mainland disagreed with seeing increased tanker traffic off the coast. That's just to correct the record.
I'd like to zoom out a little, to sort of take us out of the immediate moment and look at a more long-term view and the idea of structuring our economy for the future, not for the electoral cycle of the next two or five years, but more for the next 50 years.
The model of continuous economic growth implies that it will bring progress or happiness. I think a lot of people question that idea. We're the natural resources committee, and yet too often we act like these resources are infinite, which they're not. They're finite. As oil supplies get less and less, the price will go up. That's an economic fact.
Rather than making decisions based on short-term commodity prices, we should look towards long-term structuring rather than pretending that we have these resources that will never run out. We need a balance of things.
Mr. Rubin, in view of this long-term view of looking at the next 50 years, should we be trying to rush to export our oil resources as quickly as possible, or should we be adding value here for the long term?
Do you agree with the fact that going to export will basically ramp up production and therefore use the resource quicker, rather than going towards a more value-added in Canada approach, which would have the effect of slowing down production?
Economist, Author, As an Individual
Well, it doesn't really matter what I think, because prices will do the heavy lifting. Tar sands are not a new discovery. The only thing new about the tar sands is that they're a commercially viable source of supply, let alone what the IEA calls the world's third largest oil reserve.
At $20 a barrel, you can't give the stuff away. At $100 a barrel, it's the world's third largest oil reserve. The Orinoco is the world's largest oil reserve. That's Venezuela's tar sands. When oil was $20 a barrel, big bad Hugo Chavez had one of the most generous royalties in the world, and no one would touch the stuff because the resource wasn't economic.
What I'm saying is that the development of the tar sands, and for that matter any other hydrocarbon resource, whether we're talking the Bakken or we're talking deepwater, is going to be a function of price. The higher the price, the more oil we have.
The notion of peak oil is nonsense in a supply sense, because at $200 a barrel, we can produce six million barrels from the tar sands. The question is, can anybody afford to burn $200-a-barrel oil? I've written two books challenging the notion: can we even continue to grow at the pace that we've become accustomed to—let alone, Ms. Crockatt, at $200, or even at Brent being $105?
I think the answer here is that it's not governments that are going to decide, and it sure as hell isn't me who is going to decide. It's prices that are going to decide the pace of development.
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
With regard to the infrastructure that surrounds this market, we were talking about pipelines and the idea of public consultations. The public hasn't bought into this idea of pipelines, particularly with Keystone in the U.S. and Gateway in the north. When you look at the markets, they're really using these old marketing tools. They're not engaging the public in buying into this product.
Basically, Greenpeace never took hold in Norway. You have to ask yourself why it didn't take hold in Norway. Basically, they have an inclusive polity. They have a state-friendly society in Norway.
Wouldn't taking a different approach to engaging with the public help build this market in Canada?
Economist, Author, As an Individual
Norway is a totally different situation. I mean, the one thing Canada has going for it, which should never be underestimated, is that most places in the world have this curious idea that hydrocarbon assets should belong to the state. I'm not talking about Saudi Arabia or Venezuela; I'm talking about Mexico and Norway. Canada and the United States are exceptions to that rule.
If you look at the development of oil production in the Orinoco versus the tar sands, I think that goes a long way in explaining why Canadian development has been so much more rapid. Whether we'll continue to accept this model remains to be seen, but I think people in North America forget just how unique the North American regulatory system is.
If you were to talk to Shell or Exxon.... I mean, Exxon was expropriated in the Orinoco. In most places in the world, to gain access to a hydrocarbon resource you have to partner with a state oil company on very unequal terms.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Rubin and Mr. Nicholls.
We go now to Mr. Anderson, followed by Ms. Liu and then Mr. Calkins.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Thank you, Mr. Chair.
Mr. Brown, I'd like to talk to you a little bit. One of our briefing documents talks about the Chamber of Shipping being particularly active in international governance of the shipping industry, pollution prevention, and response to oil spills. I'm just wondering if you can talk a little bit about your role in terms of pollution prevention. We've had some discussion here today, but if we're going to diversify our markets, clearly we need to have confidence that we're not going to have issues with pollution.
What has been the role of the Chamber of Shipping in terms of pollution prevention? Could you speak for a few minutes about that and tie it into the response to oil spills?
President, Chamber of Shipping of British Columbia
I'd be happy to.
First of all, it's the Chamber of Shipping that registers all the inbound vessels for their pollution response management contract. Under Canadian law, every ship that's coming into Canadian waters does have to sign up for a spill response in the event that there's an incident. We actually perform that act. We do it on behalf of the Western Canada Marine Response Corporation.
Here in Canada there are two primary response organizations that are appointed by Transport Canada: the Western Canada Marine Response Corporation, and the Eastern Canada Marine Response Corporation. Those two organizations function under guidelines laid down by Transport Canada. They are monitored by Transport Canada. They are audited by Transport Canada for their regular drills that they perform. The level of response preparedness is laid down by Transport Canada.
I'll be frank with you. The role of the chamber in the last couple of years has been to enter discussions with Transport Canada around whether in fact some of the guidelines could be improved and built upon. We're hoping that through the work of the three-man panel led by Captain Gordon Houston this will be the case. Their mandate, as you probably are aware, is to review all aspects of oil spill preparedness and response. To get to this point of having the panel, we have been very supportive of the government's desire to ensure that no stone is left unturned in terms of that level of spill response and preparedness.
The level of response that's mandated today is for 10,000 tonnes of spill response here in Canada. We certainly think that's something that could be reviewed. We certainly want to ensure that we are at least as well prepared as any other jurisdiction in the world. So we've taken quite a close look at Alaska. We've taken a very close look at our friends to the south in Washington state. A number of colleagues and I will be travelling to Norway to look at their response system next month.
That's the context we're in at the moment. Most certainly there's a strong desire because we recognize the public anxiety, and whilst we may feel that it's sometimes misplaced, we have to respect it. We have to provide that level of reassurance to the public that in the event that anything should ever happen—and we don't believe it will, but if it should—we have a more than adequate response capability and preparedness in place.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
I wish I had a little more time to chase that down even more.
Chief John, I'd like to talk to you a little bit.
We've done a study on energy development in the north and talked about the Ring of Fire as well, which Mr. Gravelle is intimately interested in. One of the things we've heard often is the challenge of making sure that there's an educational component for first nations so that they can actually begin to get into the employment opportunities that are available for them. I'm wondering if you could talk about that a little bit.
I know we've had some success in Saskatchewan with Meadow Lake Tribal Council being able to tailor their jobs and education to the people they've got. I'm just wondering, where are you on that spectrum of being able to fit the educational system to the employment opportunities that you've got? My son is in British Columbia. I know there are a lot of educational opportunities there for young people. I'm just wondering, what have you done or what are you doing in terms of trying to address that issue of providing jobs, especially for your young people?
Political Executive Member, First Nations Summit
On one of the proposed LNG pipelines through the north there's been some effort by the tribes along the proposed pipeline route to address that. As you know, government has taken the approach of providing training funds to project-related initiatives, and there's no training fund or no training opportunity outside of anything tied to a project. In this case what we've seen is that those tribes along the proposed pipeline route have been in the process of training and developing in the expectation that there will be job opportunities. Those opportunities are not there yet, but they're job ready.
In terms of what's been happening recently, I've been provided information by the program manager at Prince George that the funding has come to an end now and there is no opportunity. They've been waiting well over a year to see what initiatives will be coming forward from the government. I was told they've revised their proposals at the request of government officials some 15 times and still haven't heard on that project. I'm talking about the manager, that project lady by the name of Diane Collins in Prince George.
Conservative
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Are you working through things such as community colleges, as well, and a secondary level of education?
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
That tied in more provincially, but have you had some success in going in that direction?
Political Executive Member, First Nations Summit
We have a very extensive network with colleges and universities in British Columbia.
Conservative
NDP
Laurin Liu NDP Rivière-des-Mille-Îles, QC
Thank you for your testimony today.
Grand Chief Edward John, I found your testimony to be particularly powerful. Thank you also for teasing at the fact that having a clean environment and clean rivers already has an economic value. In that sense it's an important fact that the Conservatives often overlook.
To turn back to the line of questioning of my colleague, Peter Julian, do you feel that the government has failed in its duty to consult with regard to Bill C-38 and Bill C-45?