Evidence of meeting #53 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pipeline.
A recording is available from Parliament.
4:40 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Thank you very much for the testimony we're hearing today. I think there are some interesting things.
I know Ms. Leslie asked this of one of the other participants on the panel who wasn't able to answer it.
I'm wondering, Mr. Donihee, if you could tell us if you know anything about the costs of spills in Canada, and what the average size and cost of a spill would be.
4:40 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
I'm sorry. I do not have exact numbers at my disposal either. I would be glad to undertake to get you some representative figures.
I can say, if you look, for example, at the Kinder Morgan spill that occurred in 2011, I believe, which was the result of a third party strike on that pipeline, the company dealt with all of its obligations without hesitation whatsoever and it has remediated all of the damage that was done, both damage to personal property such as homes and any minor damage that occurred on the waterfront.
4:40 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
You were talking to us a little earlier about risks, and I think this legislation is to deal with the risks, but you wanted to ensure that we understand the risks vis-à-vis the consequences.
In earlier testimony from the NEB, we heard that there were 6.7 pipeline spills per year in Canada. Is that consistent with your information?
4:40 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
The figures we would speak to routinely would say, as you would have seen in my submission, that between 2002 and 2013 there were on average 3.75 incidents per year. When we're talking about pipelines, like oil pipelines, which is really what this bill seeks to address, that number was just under 2 per year throughout the period 2002 to 2013.
4:40 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
So where would you put that risk of a spill occurring?
4:40 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
It's important to understand that most of those spills were extremely small in nature. To reach the threshold of what we call a significant event, a spill greater than 50 barrels of oil, in only two instances were there really substantial spills throughout that entire period. One of the spills that occurred between 2002 and 2013 constituted over 50% of the total volume. So we clearly need to be ready for that sort of circumstance, which I think the bill considers. We also need to recognize that we don't want to, as I suggested earlier, induce stranded capital available in terms of the costs associated with the great majority of those spills, which, while over 50 barrels of oil, are not huge in terms of what they represent, in terms of total spill volumes.
4:40 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
Do you think the Canadian public understands what that 99.9995% is and do they have a different sense of what that risk is? I think we're walking around it, and this bill is all about minimizing the risk in the event that we might have a spill, but I'm just hoping that you can clarify for us how unlikely that might be, if that is your opinion.
4:40 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
I do believe it is extremely unlikely that we will have a spill. I would agree with you that the number is almost incomprehensible to Canadians and that what really matters to any Canadian is the idea that no matter how many spills there are, if there's one on their property, that's one too many. We agree with that idea, which is why we're working so diligently to make sure that spills never occur and, in the event that they do, that we respond immediately and very effectively.
We're working a lot more now with individual communities. We're walking the ground and working on improving the levels of trust we have with all Canadians. That means we need to be reliable. We need to be credible. We need to clearly understand their interests and their concerns, and we have to respond to them in a very prompt and authentic way to hear them and respond to them and to make sure they understand the significant unlikelihood of a spill occurring.
4:45 p.m.
Conservative
Joan Crockatt Conservative Calgary Centre, AB
We have a responsibility here as a government to protect the public environment and also to protect public jobs. I think Mr. Blakely talked about that as well today. On those counts, how does Bill C-46 stack up in your view?
4:45 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
We support the bill. The pipeline industry as a whole represents some 25,000 jobs across Canada, and $100-billion worth of revenues to our government from hydrocarbons moving through it on an annual basis. It is absolutely key to many of the social programs, with the industry paying $1.1 billion in property and corporate taxes last year that also served to fund countless social programs and the well-being of individual communities.... In no way should those numbers ever substantiate the fact that we would accept a spill. We're working very aggressively to make sure that does not happen.
4:45 p.m.
NDP
The Vice-Chair NDP Guy Caron
Thank you very much.
Thank you very much.
I am going to ask the next questions. I have five minutes.
Mr. Donihee, I have a quick question about the definitions. When you use the term “release”, how is it specifically defined? Is it a legal definition?
Then, when you talk about 99.9994% of the oil getting to its destination at the moment, does that mean oil, natural gas and all the energy going through the pipelines?
4:45 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
I'll start first, sir, with your question on “release”. When we talk about that, I would say I'm not confident that it is defined within the regulation. When we talk about release by way of a definition, we talk about any unintentional release, un échappement of a product that was not intended on the part of the operating company. In other words, our mission in life is to keep the black stuff inside the tube, and we work deliberately to do that.
When you speak about the number that I reflected in my submission, Mr. Chairman, it was 99.9995, and that is the combined average for gas and oil. It differs by about 0.0001. The oil reliability factor is very slightly higher than that for gas, but both are almost impossible to measure in terms of the significance factor.
4:45 p.m.
NDP
The Vice-Chair NDP Guy Caron
Thank you very much.
As I have about three minutes left, I would like to direct some questions to Mr. Olszynski, Mr. Miron and, if I have the opportunity, Mr. Blakely and Mr. Donihee.
This bill looks generally like an improvement over the current situation, but with a number of its provisions greatly lacking in clarity. Could you tell me whether you believe the bill to be a step backwards in any sense?
Are you seeing any drawback from any aspect of this bill whatsoever? If you had one or two top amendments to actually clarify what's in this bill, what would be your choice?
Mr. Olszynski first.
4:45 p.m.
University of Calgary, Faculty of Law, As an Individual
Okay. Thank you.
I will answer in English, because it will be quicker that way.
I would stick by my two amendments. I think that they, in a sense, just simplify the bill. I think they're achieving essentially the same objective.
The first one certainly is just to clarify the language around environmental damages.
The second recommendation—the requirement, or at least the authority, to make regulations for prescribing a process for assessing environmental damages—I think is very important. In fact, right now the legislation, if it does anything, the bill prohibits the Governor in Council from making such regulations with respect to the pipelines claims tribunal. I don't fully understand the reasoning for that, why the pipelines claim tribunal would be prohibited from essentially compensating for those damages. I think that part should be removed. That's proposed subsection 48.48(2). And again, it's regulations to set out a process that would benefit industry, government, all parties, followed essentially after the American model.
4:45 p.m.
NDP
4:45 p.m.
Barrister and Solicitor, Ecojustice Canada
I would echo that need for some clarity around the environmental damages or the loss of non-use value relating to a public resource. As I mentioned in my presentation, I think some of these new tools the NEB can use to recover costs in the event of a spill should be made mandatory. I don't think it is an appropriate area for discretion in light of the fact that this bill is ostensibly to implement the polluter pays principle.
4:50 p.m.
NDP
The Vice-Chair NDP Guy Caron
Thank you very much.
I will briefly turn to Mr. Blakely, but with a different question.
4:50 p.m.
Canadian Operating Officer, Canada's Building Trades Unions
I'm going to take the coward's way out; I'm going to think about this for a little bit. There were three or four things that I thought, yes, could be clarified, but you asked for our top two. I would like to think about that and give you a reasoned answer.
4:50 p.m.
NDP
The Vice-Chair NDP Guy Caron
Thank you very much. You can submit that to the committee.
I want to ask you a different—
4:50 p.m.
Canadian Operating Officer, Canada's Building Trades Unions
We have a submission. The translator was a little later than he normally is.
4:50 p.m.
NDP
The Vice-Chair NDP Guy Caron
So we will accept it.
I have a quick question for you, because I only have 30 seconds left.
The projects that are currently on the table, Energy East, Trans Mountain, or Keystone, of course, are some of the biggest pipeline projects ever undertaken. This a different game compared with what was being done before.
How should we go about dealing with the security measures with projects that are huge compared with what existed before?
4:50 p.m.
Acting Chief Executive Officer, Canadian Energy Pipeline Association
I'm not sure what you mean, sir, in terms of your reference to security standards.
4:50 p.m.
NDP
The Vice-Chair NDP Guy Caron
How should the safety aspect be approached for projects that are much larger than they ever were in Canada? We're talking abut megaprojects compared to the situation before.
Maybe you are able to answer with a quick answer from Mr. Blakely.