Evidence of meeting #136 for Natural Resources in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was production.
A recording is available from Parliament.
May 14th, 2019 / 4 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you all for coming here today; it's been interesting.
I think I'll just pick up on some of the things Mr. Evans said, just to get some clarification. You say there's growth in oil demand around the world. Is that from the IEA projections, which you were talking about, or is it NEB?
4 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
I don't have the figures from the International Energy Agency's forecast.
4 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
What I was speaking of in terms of the 1.7 million barrels growth out to 2030 was the National Energy Board forecasts.
4 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
That's the production, right, whereas the other one was demand.
4 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
It was the forecasted growth in production to meet demand.
4 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I just wanted to make sure I heard the following right. Did you say the world will have more oil than it needs as Canadian production increases?
4 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
If those were my words, that was not what I intended to say.
4 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
That's why I wanted to make sure I heard it clearly.
4:05 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
I only want to speak in the Canadian context.
4:05 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
I prefer not to speak to the International Energy Agency's demand forecasts, because I don't have the numbers before me. Essentially what I was saying was that there is a forecast for growth in oil production in Canada, and that is intended to meet what is understood to be a demand growth globally.
4:05 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Okay, and so you won't.... I know we had a question about the North Sea, but you can't comment on what the American production might look like over the next few decades.
4:05 p.m.
Assistant Deputy Minister, Innovation and Energy Technology Sector, Department of Natural Resources
I think those authoritative sources like the IEA and NEB are probably the most reliable sources for domestic production. We don't have an opinion on what oil this displaces.... It all goes to the world markets, and as we've seen in recent years, there can be a significant shift based on technological developments. It's certainly the case in U.S. oil and gas production, where we've seen a major spike that was not foreseen by anybody. We're continuously tracking both the public and private sector forecasts, and we take them as part of our discussions. However, at the end of the day, it's a market-driven approach in allocation of resources.
4:05 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I've seen analyses that the American production doesn't show any signs of tailing off in 10 years. It just seems to be staying where it is, if not increasing. I've also seen analyses about the IEA forecasts being consistently, year after year after year, 10% too high.
I'm just a bit wary of some of the statistics I see in some of the forecasts. I know when the National Energy Board was before us for the study we're talking about today, they presented world energy demand curves. When I asked them about that...these were two years out of date, they were before Paris, they were before the tight oil production situation and everything. When they came back a year later, it was very different.
I just wanted to make sure I understood what you said. I guess I misunderstood you, so thank you for that.
4:05 p.m.
Assistant Deputy Minister, Innovation and Energy Technology Sector, Department of Natural Resources
If I may add, Mr. Chair, I'm trained as an economist and we have a good old joke in economic forecasting, which I guess could also apply to weathermen or other domains: Pick a number, pick a date, but never the two of them together.
I think the same challenges apply in the oil and gas markets. It is hard to predict with certainty what's going to happen despite the best minds and the best data. Things are constantly changing in the marketplace.
4:05 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I heard one of Canada's best resource economists say we're here to make astrologers look good.
I just wanted to get some clarity on that.
Getting back to the study, one of the things we heard—and I remember Professor Monica Gattinger talking about her concerns with respect to the lack of trust in the regulatory system—was that trust would continue to erode until the regulatory system was fixed, or the holes in it were fixed.
Could you comment on what's been done there, what Bill C-69 was meant to address in that regard and where that stands?
4:05 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
In terms of Bill C-69, the overall objectives of the act were to put in place a framework that would give greater transparency to everybody involved in the regulatory process and to restore public trust. This would be in recognition of the fact that efficient, credible and predictable assessments in decision-making processes are critical to attracting investment and maintaining competitiveness.
The overall process would create an impact assessment system with better timelines and greater clarity from the start for all stakeholders, both proponents and Canadians at large, and be built with a lot of engagement with first nations.
Right now, as you know, Bill C-69 is before the Senate Standing Committee on Energy, the Environment and Natural Resources, with all of the parliamentary activity that involves. I don't think we're in a great position to comment more on it.
4:10 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I have 30 seconds left and I would like to get one more clarification because I thought I heard you incorrectly. When you were talking about the $1.6 billion and what that was made up of, I thought you said you started off with $1 billion for the EDC. Was that correct?
4:10 p.m.
Assistant Deputy Minister, Innovation and Energy Technology Sector, Department of Natural Resources
That's right.
4:10 p.m.
Liberal
Kent Hehr Liberal Calgary Centre, AB
Thanks to our honoured guests for being here.
I have a follow-up question to Mr. Whalen's. You guys were describing our pipeline capacity and how we're going to be moving forward on the Trans Mountain pipeline the right way, and with Enbridge Line 3 and Keystone XL. That roughly equates to oil sands growth in the near term. Is that correct?
4:10 p.m.
Senior Director, Pipelines, Gas and LNG, Energy Sector, Petroleum Resources Branch, Department of Natural Resources
If you just take the nameplate capacity of those three pipelines—the incremental new capacity—it would match what the NEB forecasted as growth in Canada's production.
4:10 p.m.
Liberal
Kent Hehr Liberal Calgary Centre, AB
The timing on some of these is a little unclear. This is like the joke Mr. Des Rosiers made earlier, which could also apply to pipelines. Some of those things are outside of our control, given what's happening in the jurisdiction south of the border, particularly with regard to Keystone and other things.
Are we looking at plans to develop more rail capacity and ability to get more oil by rail? Where are we on that? Have the costs come down on how that process is unfolding?
