Evidence of meeting #15 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 sir.
A recording is available from Parliament.
3:30 p.m.
Liberal
The Chair Liberal James Maloney
Good afternoon, everybody.
We have two hours today. In the first hour, we're going to have Mr. Alan Yu, who is the founder and chairman of Fort St. John for LNG.
Mr. Yu, I'm going to turn the floor over to you for 10 minutes, and then I'm going to open the floor up to questions from committee members.
3:30 p.m.
Alan Yu Founder and Chairman, Fort St. John for LNG
Thank you, sir.
As the honourable chairman said, my name is Alan Yu, and I am the founder and chairman of FSJ for LNG.
I am a new immigrant to Canada. I've been here only two years. I love my new country. I love my new hometown, Fort St. John. That is why I am fighting for its economy and for the job market in Fort St. John.
I moved to Fort St. John about a year ago. The job market then was so good that Statistics Canada would not even publish the unemployment rate.
When I got there—I had submitted my resumé the day before—I was called for an interview the following day, and I was hired in the afternoon. Such was the job market in Fort St. John. Anyone who wanted to work could easily find work. My family moved to Fort St. John in July last year. My then 13-year-old son found a job. It was summer, so he was working 37 hours per work. He was earning $12 per hour, because if you offered minimum wage in Fort St. John, you would not have any employees. Such was the job market.
However, everything drastically changed after nine months. Last February the unemployment rate was at 10%. The figure could have been even higher, because there are a lot of independent contractors who are not part of the statistics. Last January 27, I lost my job as a two-way radio programmer for the natural gas field. I've been unemployed since. That is why I started Fort St. John for LNG, so that we could have additional markets for our natural gas.
Fort St. John is a resource town. We rely on our natural resources, specifically natural gas. We are the Fort McMurray of natural gas.
I started Fort St. John for LNG as an ordinary association for social licence for LNG. We started with simple petitions, asking for responses and comments regarding the CEAA's draft environmental assessment report. I also started a petition for approval of spending for all the LNG plants, to create an LNG industry here in Canada.
We got bigger. We got bolder. We participated in a synchronized truck rally in support of LNG, including Terrace, Fort St. John, and Fort Nelson. That was when I found out that Fort St. John was really down. The show of support came from 580 work trucks. We started at around 11:15. Two hours later, trucks were still leaving our point of origin. There were that many unemployed work trucks in Fort St. John.
We also got bolder with people's support, a people's rally. We created such a reputation for ourselves that our premier, Christy Clark, was there.
After that, there was nothing more I could do in Fort St. John. We set our sights on Ottawa. We embarked on an “LNG or bust” bus ride. We travelled 4,500 kilometres in eight days. We passed through several resource towns, spreading the word that we were in dire need of support from the Canadian government.
We arrived here last Tuesday, about a week ago, to deliver the message that we need help in Fort St. John. We need an LNG plant so that we can generate jobs in Fort St. John. We have been lobbying for an LNG industry here in Canada so that the workers of Fort St. John can go to work.
If we do not have an LNG plant, our production of natural gas will drop. We have been exporting our natural gas to the U.S., but the U.S. will soon be self-sufficient, so every year from now on we will see drops in our production. That is why we need an LNG plant for the economy of Fort St. John, as well as for the Canadian economy.
The study of this committee is the future of Canada's oil and gas, mining, and nuclear sectors: innovation, sustainable solutions, and economic opportunities. Let me start with my humble opinion on the future of oil and gas.
If we do not do anything now, the future of oil and gas will not be good. The demand for our natural gas will drop because, as I said, the U.S. will be self-sufficient soon. They are even supplying the eastern part of Canada with natural gas.
We hear of well-funded movements trying to keep our oil and gas in the ground. If they succeed, the world's demand and Canada's demand for hydrocarbons or fossil fuels will not stop. The demand will be there. However, we will miss a huge opportunity to export oil and gas. We will not have domestic production, but we will import. We are already doing this, but it will happen on a much larger scale. We are importing oil at around $32 million a day, or about $13 billion, when we have the third biggest reserves of oil.
To see a bright future for oil and gas, we need to bring them to market. We will need more LNG plants, aside from the pending Pacific NorthWest LNG. We need the Trans Mountain pipeline to meet demand and take advantage of our capacity to produce. We need the energy east pipeline, so the rest of Canada, especially the east, can use Canadian oil and not import oil. To save Canada's oil and gas industry, we need to bring oil and gas to market in a safe and effective way, and this means LNG and pipelines.
To save Canada's oil and gas industry, we need to counter the well-funded environmentalists: how to drive Canada's economy into the ground. We need to expose their funding and their interest, whatever that may be. This is the next step for FSJ for LNG. We have done Fort St. John. We have been to Ottawa. My next mission, in my unemployed life, would be to counter the environmentalists who are spreading so many things about the oil industry.
I see tremendous economic opportunity for Canada. Not only can we supply the world with the cleanest fossil fuel, which is B.C. natural gas, but we can also be the leader in supplying technology for natural gas power generation. Aside from exporting our natural gas, the Canadian industry could also be the leader in promoting, even supplying, natural gas power plants. We have the capacity and opportunity to clean up the world's air, reduce greenhouse gases from coal by 50% by switching to natural gas; we all know that. We have the capacity to further reduce it to 75% if we can export our carbon capture technology.
We can also help the world in switching to natural gas by working with the World Bank in financing global warming reducing natural gas power plants. I am from the Philippines, and we always have funding problems, but the World Bank has been there to support us. If we can enter into a partnership with the World Bank, maybe we can encourage other countries to adopt natural gas.
We need to export LNG from both coasts, not only from the west but also from the east. We need to support Bear Head LNG in Halifax.
As for oil, we need to bring our oil to market through pipelines and end the dangerous practice of transporting oil via trains.
We need to consume domestic production when it comes to oil and stop importing Saudi Arabian or other sources of oil. I find it sad to hear that Canada, with the third largest oil reserves in the world, imports almost half its oil requirement.
We need the energy east pipeline to enable Canadians to consume Canadian oil. We need to be able to expand and upgrade existing pipelines without going through tremendous delays and tremendous costs that ultimately are passed on to consumers in terms of higher oil prices.
For oil and gas, we need to review the effectiveness of carbon taxation. Carbon tax makes our oil and gas products uncompetitive globally and domestically against U.S. oil and gas. We currently import natural gas for use in the eastern part of Canada from the U.S. One of the advantages of importing U.S. natural gas is that it does not have carbon taxation, rendering it cheaper.
In terms of innovation, we in northeast B.C. are trying to use LNG for hydraulic fracturing. Instead of using water and fracking solutions, we are about to try to inject natural gas to break the shale rocks. As we all know, liquefied natural gas expands 600%. We are trying to inject LNG and when it expands, break the shale rocks. That is quite ingenious, considering you'll be using natural gas to create a well that's natural gas.
Please allow me to express my humble opinion to this committee about what I want to see in the oil and gas sector.
Number one, as mentioned, I would like to see our Canadian natural resources get to market. Three proposals would help in this regard, the Pacific Northwest LNG, the energy east pipeline, and the Trans Mountain Kinder Morgan pipeline expansion.
Number two, I want the Government of Canada to help defend these projects and make this happen for the sake of Canadian jobs and the national economy. Anything less will take away jobs from Canadians and reduce our national economy.
Number three, I want the government to review the Paris agreement, taking into consideration a recent government-funded study made by the Canadian Centre for Policy Alternatives along with the Parkland Institute and the corporate mapping project. The study says that short of an economic collapse, it is difficult to see how Canada can realistically meet its Paris commitment in the 14 years remaining without rethinking its plan for oil and gas development. It also says if Ottawa approves only one large LNG terminal in B.C. and if Alberta sticks to its plan of capping provincial emissions at 100 megatons a year, emissions from the rest of Canada will have to be cut by 47%.
This is a recent study funded by the government and made by people who are climate change supporters.
Number four, the government should also acknowledge that, so far, economic progress and the use of fossil fuel go hand in hand. History has taught us this. We have missed on, and have withdrawn from, the Kyoto protocol, and this current study says we cannot meet the Paris accord as well, unless the economy takes a drastic leap. One project the size of Pacific NorthWest LNG or even LNG Canada in shipping B.C. natural gas into Asia for power generation will displace coal-fired power and greenhouse gas emissions, offsetting all of B.C.'s annual greenhouse gas emissions, plus about 10% more from Canada.
Number five, I want the government to publicly acknowledge the fact that even though global warming affects us, we are not the only cause of global warming in Canada. Pollutants from Asia reach our shores. More than 98% of the greenhouse gases are emitted outside of Canada, and that affects the climate in Canada.
For sustainable solutions, with the safety measures put in place by the regulators in Canada and with the oil and gas reserves that will outlive all of us and the next generations, it is my humble opinion that with whatever we have right now, even if we export our oil and gas, we will have enough to sustain us until such time that a more renewable energy is discovered and implemented.
Thank you.
3:45 p.m.
Liberal
The Chair Liberal James Maloney
Thank you very much, Mr. Yu.
I'm now going to open the floor up to questions. By the way, we're going to have to be done right at 4:30 to get on with the next section.
Mr. Tan, it's over to you.
3:45 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
Thank you, Chair.
Thank you, Mr. Yu, for your presentation.
I guess the Fort St. John group is a grassroots organization, and you are here to speak on behalf of the organization for building one LNG plant in your local area to boost your local economy and create more jobs. I guess that's probably your main reason.
As you mentioned, you are new to this country. You have been in Canada just two years. What is the main source of the information you gathered and used in your presentation to justify your argument?
3:50 p.m.
Founder and Chairman, Fort St. John for LNG
Sir, since I was laid off last January 27, and even prior to going to Fort St. John, I've studied working in natural gas. I studied at Vancouver Community College in preparation for moving to Fort St. John. I familiarized myself with the processes of natural gas and LNG, and since I've been unemployed, I've had a lot of time to study and do research.
3:50 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
You accumulated all that information and understanding within this two-year time frame.
3:50 p.m.
Founder and Chairman, Fort St. John for LNG
Not even two years, sir, approximately 14 months.
3:50 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
Okay. Suppose there is a plan to build an LNG facility in your area. What is the biggest challenge you're going to face in developing this plant: the labour, the funds, or the local infrastructure? What's the biggest challenge?
3:50 p.m.
Founder and Chairman, Fort St. John for LNG
Just to clarify, sir, the LNG plant would not be in our area. It would be in the northwest of B.C., around 1,200 kilometres away from us. We are on the supply side, supplying natural gas to the LNG plant. Everything has been laid out. The community of Prince Rupert already knows how many people would be hired. They have been preparing for this. They even put out an ad hoping the approval was going to happen last March 22, sir, before it was delayed.
Progress Energy, the biggest upstream industry in northern B.C., was also prepared. They had a budget of $5 billion over the next three years. Since there was a delay, and also because of the low price of natural gas, they scrapped it. That $5 billion could have been used to finance exploration and job creation. They merely replaced it with $500 million over two years. That $500 million is just enough to sustain a few operations they have, but not enough to create jobs.
Thank you, sir.
3:50 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
Since we don't have the infrastructure to process LNG in Canada, because we don't have enough capacity, I would say most of our LNG will be exported overseas. In your opinion, where is the biggest market?
3:50 p.m.
Founder and Chairman, Fort St. John for LNG
Okay. We already have an LNG plant in Canada. It is located in Delta.
3:50 p.m.
Geng Tang
We have a few.
3:50 p.m.
Founder and Chairman, Fort St. John for LNG
I am only familiar with one, sir.
We have the capacity to even produce LNG in a moveable plant, but we have one in Delta. Within the last three weeks, there was a press release that they will be selling to Hawaii. They will be supplying LNG to Hawaii, through Fortis Inc. in Hawaii. By using natural gas to generate electricity in Hawaii, the same article said the savings in greenhouse gases is equivalent to taking out 80% of their vehicles.
There is a market.
With the wood fibre—this is a proposed LNG plant in Squamish—they have a memorandum of agreement to sell LNG to China by 2020.
Those are the only two things I could think of to answer your question.
Thank you.
3:55 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
Okay.
For your information, we have LNG plants in Alberta, B.C., and Quebec, and there is one more LNG plant that is set to come online in northern B.C.
3:55 p.m.
Liberal
3:55 p.m.
Liberal
Geng Tan Liberal Don Valley North, ON
Okay, let me finish.
You mentioned the market in China. Is there one you're thinking of, or is it just that you can see a demand? Do you believe there is a huge market in Eurasia?
3:55 p.m.
Founder and Chairman, Fort St. John for LNG
I believe there is a market. I know there is because of the wood fibre agreement, and that they will be selling to China.
3:55 p.m.
Liberal