Evidence of meeting #81 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 propane.
A recording is available from Parliament.
4:15 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
I'm sorry, I did not hear my name. I have no visual of you. I can hear, but—
4:15 p.m.
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
No problem.
The government has a role to play as a regulator. It's a yes or no.
4:15 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Yes, absolutely. It's critically important.
4:15 p.m.
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
Pipelines are regulated by the National Energy Board onshore pipeline regulations that were developed in 1999.
Is that correct?
4:15 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Yes, that's correct for federally regulated pipelines.
4:20 p.m.
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
Section 5.1 sets out CSA Standard Z662 as the standard for pipelines.
Is that correct?
4:20 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Yes, that's correct.
4:20 p.m.
NDP
Jamie Nicholls NDP Vaudreuil—Soulanges, QC
Yet a company such as Enbridge, which is a pipeline company, has been in non-compliance with this standard for 14 years, through both Liberal and Conservative governance. It was only discovered in 2011 that Enbridge's pipeline was found to be in non-compliance.
4:20 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Are you referring specifically to the recent question with respect to back-up power?
4:20 p.m.
NDP
4:20 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
I don't have the specifics on that. It would be best to direct that to the company or the regulator. But I will say that there is a wide range of judgment used in management systems, which is a part of the law. There are many parts of standards that set an absolute minimum, and other parts that are there as guidance.
We are assessing that ruling from the NEB, as an industry, because it's fundamentally important that we meet any and all expectations.
We will continue to look at a risk-based approach that escalates beyond standards. An incremental small clause that may have not been clear—that is my understanding of part of the controversy over this—does not mean that there has been a non-compliance. There may be further discussions to be had on that specific case. I can tell you unequivocally that the combination of those world-class standards, the CSA standards coupled with risk-based management systems that push above and beyond those, are encompassed in the NEB regulations, and in company practice and third-party audits.
4:20 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, Ms. Kenny. Thank you, Mr. Nicholls.
I would encourage members to stick to the topic of the day, which is market diversification.
Go ahead, please, Mr. Garneau, for up to seven minutes.
4:20 p.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you, Mr. Chair.
My question is for Mr. Cloutier.
You support the Line 9 reversal project to carry crude from out west. You also support accepting diluted bitumen.
Do you know whether Suncor and Ultramar, the companies involved, are thinking about making those investments? I'm referring to coking, specifically, because that requires a big investment.
4:20 p.m.
National Representative, Energy Quebec, Refinery of Suncor Energy of Montreal, Communications, Energy and Paperworkers Union of Canada-Quebec
Obviously, the people at Suncor would be in a better position than I am to answer that. The coking project is not dead. But there are stages to follow. We know that Suncor will think about expanding the Isomax unit, first. The second project is building a new crude unit. And the coking plant is third.
Ultramar is already positioning itself to be able to move the product from Montreal to Quebec City. In fact, it plans to make significant use of it. Suncor is already in the process of building facilities to receive tank cars carrying crude from western Canada. That alone is a sign that it plans to make the investments.
Keep in mind that if the Montreal refinery received more western crude, the refinery's profits would increase by $400 million to $500 million a year. That is every reason to make those investments.
4:20 p.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you.
Mr. Harrison, you spoke about solar thermal energy.
If I'm a homeowner and I make the investment in my own home, can you give me a sense of how many years it would take before I would recover my investment costs for installing such a system?
4:20 p.m.
Professor, Department of Mechanical and Materials Engineering, Queen's University, As an Individual
Certainly.
As I stated, the answer to that question varies, and it's very dependent on the price of the alternative energies that you have to compete against. Three years ago, working back through the numbers for a typical solar domestic hot water package that would handle a household with a family of five people, the type of payback we were looking at was probably in the range of five to six years.
The recent trends and the reductions in natural gas prices have pushed that number significantly outward. If you look at an equivalent price by converting a gigajoule of energy of natural gas to an equivalent of electricity, the lowest prices in Canada, in Alberta, for example, would be about a cent a kilowatt hour, which is very, very low. On the east coast, where natural gas prices are higher, it's about four cents per kilowatt hour for natural gas. For example, the City of Halifax has a program that encourages homeowners to put in solar systems, and that program is going quite well.
4:25 p.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you.
Dr. Kenny, whether you like it or not, pipelines are in the news a great deal these days, and I'd like to focus particularly on a pipeline to Pacific tidewater.
Do you think there is a way to find a solution that would be acceptable to environmentalists, first nations, and the Government of British Columbia? I would like your candid opinion.
May 9th, 2013 / 4:25 p.m.
President and Chief Executive Officer, Canadian Energy Pipeline Association
Yes. First, the current government in British Columbia has set five conditions, all five of which we believe are achievable. We're working actively on a couple of them, including an initiative on emergency response that the current environment minister, Terry Lake, has launched, which we've been very supportive of.
It's important to separate environmental questions from land and water questions to climate change. I think there is a controversy, a misunderstanding, if you will, with respect to carbon issues being a global energy trade question and energy use and energy efficiency around the world, as opposed to whether or not Canadian production itself, while on a par with Venezuela and many other producers, is a problem for Canada.
We do not believe that is a problem, provided that you are responsibly developing and ensuring that you're advancing technologies to meet comparable benchmarks around the world, which Canadians are doing. On land and on water we are very confident that our systems can meet the test for British Columbians and all Canadians. We have done so for over 60 years. I believe there's a large amount of misinformation and a better opportunity for dialogue, which is certainly our accountability.
I'll use one example very briefly. Diluted bitumen corrosivity in pipelines was an allegation put forward by a particular group whose objective is to halt the use of fossil fuels because of climate change. That itself is a laudable goal, but the choice of lying intentionally to raise fear is, in my view, unethical. We have been very clear with numerous global studies with respect to that issue: dilbit is not corrosive in pipelines. In fact, internal...in pipelines is very, very rare at all.
We need to work to regain trust and have a good conversation about issues that may be of concern, and I believe we can get there.
4:25 p.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you. I hope we can find a solution too.
Do I have a chance for one more question?
4:25 p.m.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Okay.
Mr. Facette, I'm still trying to understand natural gas and propane. Propane for me is my barbecue. Natural gas gets a lot of press. Is propane a better energy supply than natural gas?
4:25 p.m.
President and Chief Executive Officer, Canadian Propane Association
You're talking to the CEO of the Canadian Propane Association. The only answer I can give you is yes, without disrespect for my friends at the CGA. Tim's a good guy. I know he was here earlier this week, and he said nice things about me, so I have to say nice things about him.
It is true that when Canadians think about propane, the first thing they think about is their barbecue, and that's not a bad thing. Some of our members make a good living from that, and that's great.
Our challenge in the propane industry is to make them think it does more than that. It's an $11 billion industry and contributes greatly to this country. The association exists to tell our story. We've got to get our title right for the chair, but we'll work on that too. Those are jokes that won't go away.
There is an awful lot more we can do; it can do an awful lot more. Whether it's better or not in a serious way is up to the consumer to decide. Our members will compete against any other source of energy for the fuel, for the demand of their customers, no problem. They're prepared to compete head to head.
We have members in Atlantic Canada who are winning that debate, who are winning against manufacturers who are choosing propane over natural gas. But they're being allowed to compete on an equal basis, on a level playing field, and head to head. There's no problem with that.
Is it better? Customers will decide at the end of the day what's better for them.
4:30 p.m.
Conservative
The Chair Conservative Leon Benoit
Thank you, and thank you, Mr. Garneau.
We go now to the five-minute round, starting with Ms. Crockatt, followed by Mr. Allen and Ms. Liu.
Go ahead, please.
4:30 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Thank you very much, and thank you to all the witnesses for being here. It's been really informative. I wish I had five minutes to ask each of you questions.
I particularly enjoyed Dr. Harrison talking about Drake. That, of course, is very close to my riding in Calgary Centre, but I'm going to start with Daniel Cloutier.
You were talking about the opportunities, I think, that will be accruing to Quebec workers should this Line 9 expansion pipeline go through. I believe I heard you say that it'll be a reliable and cheaper source. Are you expecting it to be a cheaper and more reliable source than what is currently available to you?