Natural Resources Committee on April 11th, 2017

[The Chair, Liberal, James Maloney]

We're going to get under way. Because we're starting a bit late, we have two witnesses scheduled for each hour. Three of them are here right now, and one of them will be joining us momentarily by video conference. I propose that we hear from all four witnesses at the outset and then use whatever time we have after that for questions for all the witnesses.

Mr. Barlow has asked for 30 seconds before we get under way, which I've agreed to.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair. I want to take this opportunity to table my motion. I'll read the motion, and then you can consider it, very deeply, as I'm sure you will, and we'll vote on it on another day, as we're in a rush.

My motion reads as follows:

That the Committee invite the Minister of Natural Resources to appear before it to explain the government's rationale for changes made to the Canadian Exploration Expense for exploration drilling.

I'm officially tabling my motion.

Thank you, Mr. Chair.

[The Chair, Liberal, James Maloney]

Thank you.

Gentlemen, thank you very much for joining us today. I apologize that we're getting off to a late start. We had some votes in the House. Just so you're forewarned, it's entirely possible the bells might start ringing during this meeting, and we may have to abruptly adjourn and go back for some further votes. Let's cross our fingers and hope that doesn't happen.

Some of you are familiar with the format. We'll give each of you up to 10 minutes to make your presentation, and then depending on how much time we have after that, we will open the floor to questions from members around the table.

I encourage you to use your headsets, because you'll be asked questions in both French and English, and of course, you're free to deliver your remarks or answer any questions in either official language as well.

Mr. Ferguson, why don't we start with you, since you know the procedure.

[Alex Ferguson, Vice-President, Policy and Performance, Canadian Association of Petroleum Producers]

Thank you very much.

Good afternoon, everyone, and thank you for the opportunity to appear in front of you today.

I have reviewed all the previous presentations and minutes from all the other sessions, believe it or not, and I can see you've had a fairly rich diversity of perspectives on this topic. I'm hoping to add to that rather than to counter or go over any of the previous points you have had.

As you know, I'm a representative of Canada's upstream oil and gas sector. I would like to remind you of the very complex and integrated nature of oil and natural gas in the Canadian economy. Certainly from a value chain perspective, we look at refineries, upgraders, petrochemical plants, LNG, methanol, fertilizer plants, etc., so there's a pretty integrated value chain perspective that the sector has in the economy.

Certainly from a supply chain perspective, there are service sector companies, equipment suppliers, research technology suppliers, and many other connections in that supply chain and across Canada.

Of course, I would like to remind everyone of the transportation perspective—pipelines, trucking, rail, and marine.

Most important from a people perspective, there are indigenous peoples, workforce, governments, public, ENGOs, etc.

All of these perspectives in their own way are investing in clean technology in Canada's resource sectors.

I'll start with a bit of context underlying all of my notes. I want to reflect for a moment on a few very significant dynamics in our operating environment that we're seeing today, certainly starting with the recent U.S. election and the shift in administrative direction we're starting to see. Second is increasing Canadianization, I call it, of our oil sands developers. We've seen that recently in the news. Third is a continued oil and natural gas sector focus on and investments in innovation and technology development and deployment, which I'll talk about in more detail. Fourth is continued influence of global geopolitical events on Canada's economic growth objectives, which are significant.

These context pieces present both challenges and opportunities for Canada's natural resource sectors.

Your oil and natural gas sector remains committed to investing in technologies and innovations that continue to make Canada competitive on both an environmental performance aspect—carbon, air, land, and water—and investment in trade competitiveness, which really is key to our ability to continue to operate successfully around the globe. Of course, I don't want to miss social performance.

The world needs more Canada. Global oil demand is forecast to continue to expand for some time even in a highly global carbon-constrained world. I would refer you to the IEA low-carbon forecast in the range of 75 billion barrels a day in 2035. Canada's opportunity remains strong to insert, at least on the oil side, three, four or five billion barrels a day into that market. It's a significant opportunity and continues to be something Canada should and will strive for.

Clean technology investments in the oil and natural gas sector will mean that Canada can and should competitively supply the world with our products.

I don't have a copy of this, but I will make it available later, properly translated. It's a bit of context from the clean tech investment research and development for our sector. Here are a couple of highlights. The total 2016 overall energy sector R and D spend is $2 billion. That's the overall energy sector, including renewables, electric, energy efficiency, nuclear, and fossil fuels. Fossil fuels in 2016 out of that $2 billion represented $1.45 billion. As a perspective, it's a pretty key role in the overall clean tech investment sector in the energy sector across Canada. Just to put a small point on it, in 2016 our Canada's Oil Sands Innovation Alliance expenditure was $219 million out of that $1.45 billion.

Again, I want to emphasize these are not public funds. These are company investments in these areas.

Before we move on, I want to highlight for you an example of a very specific clean tech innovation. For example, a most significant global differentiator for in situ oil sands operational performance, cost and carbon, on a per barrel basis is with respect to the steam generation required for in situ development. At this year's annual COSIA conference, where a few hundred innovations and technologies were highlighted, one of the examples that came out was called “direct contact steam generation”. I want to describe this for you, because it really amplifies the kind of direction the industry is going in.

For this particular technology, I'd like you to picture a rocket engine buried kilometres under the surface. Natural gas, air, and water are fed in very measured and very exact quantities to this buried rocket engine. Steam that's generated underground melts the bitumen from sand for recovery to the surface. The important thing is that GHGs, greenhouse gases, never leave the reservoir. Basically we're creating instant carbon capture and storage. Certainly the benefits from that include less surface footprint for water recycling and management on the surface, which is a key part as well. Potential or reduced emissions on in situ projects as compared with normal in situ development are in the range of 75% to 90%.

This would be a game-changer opportunity for oil sands development on the in situ side. Equally important, in terms of the potential to reduce costs versus conventional in situ operations, we're projecting anywhere from 25% to 35%. It's a very significant competitive opportunity as well as a carbon opportunity.

We continue to be a most significant investor in clean technology across our economy. That will not stop. We're broadly supportive of elements in this year's budget that focus on innovation investments, including the commitment to revise Canada's intellectual property framework. We see that as a key part moving forward.

Thank you very much.

[The Chair, Liberal, James Maloney]

Thank you very much, Mr. Ferguson.

Mr. Mueller, why don't we move over to you.

[Thomas Mueller, President and Chief Executive Officer, Canada Green Building Council]

Mr. Chair, thank you for the invitation to appear before the committee. I wanted to bring a perspective from the building sector, particularly the green building sector, in regard to the risk or opportunities for clean tech.

The green building sector here in Canada and globally is growing at a rapid pace year after year. At the end of 2014, the green building sector represented about $23 billion in GDP and about 300,000 full-time jobs working on constructing, designing, and operating green buildings across the country. Of course, one aspect of green building is low-carbon or high energy efficiency targets. I wanted to give my presentation today around one specific example. There really is an opportunity for innovation in clean tech and also an important role for renewable energy technology, which is really the movement towards low or zero carbon buildings in Canada.

The opportunities are there. According to a study that we did last year, research and development investment in the building sector is the lowest of any industrial sector in Canada. The building industry is still doing things in a way that is not very innovative. It requires research and development as one aspect and to de-risk new technologies and products moving forward. One of those areas is how we get buildings to a low-carbon or zero carbon position. While Canada is a leader in green building, Canada is not a leader on low-carbon or zero carbon buildings. Other countries such as Australia, the United States, European countries, are considerably well ahead of us and we're missing an opportunity for innovation in that area.

Carbon neutral buildings by 2050 is part of the pan-Canadian framework on clean growth and climate change. There are three aspects to it. First, energy efficiency is the most important mandate to reduce energy use and the use of carbon-intensive fuels in buildings. Second, we are the beneficiaries in Canada of a very clean electricity grid. About 80% of our electricity is clean. This is a real strategic advantage for Canada and the plans are to make the grid even cleaner. Finally, the real challenge is, under these circumstances, how we replace fossil fuels that are used for heating buildings and also how we reduce carbon-intensive electricity in the country.

In terms of our program, we should develop the best policy instruments to address climate change and encourage the adoption of clean tech, but we need to begin with the right frame and move beyond a tight focus on energy and look more at carbon. The policy language really matters because, even if we talk about carbon targets, we still talk about energy. What we should really start talking about is carbon. How do we design, construct, and operate buildings with carbon in mind? Actually, it changes the approach quite considerably. I want to focus the rest of my remarks on that, because when we focus on designing buildings based on their carbon footprint, we expand our focus from just energy efficiency to one that actually includes renewable energy. This is a real opportunity for Canada to invest and find a way to use renewable energy technologies, particularly for the building sector, in practical applications to reduce carbon emissions. It also encourages both on-site and off-site generation to get to low-carbon or zero carbon buildings and homes.

I have a couple of examples. When we think of carbon instead of energy, we actually drive innovation. We drive innovation in building design. We drive innovation in energy-efficient products, but we also look at what we call integrated renewables that are not just on a remote site, but are actually integrated into the building, which again, is an area of innovation. We look at power storage, which is very important not just for buildings, but for cars and other technologies, to make sure that we can have the energy available when we need it. There is the smart grid technology. There's a whole area of clean tech opportunities that really can help in the building sector and in other sectors as well.

There is an improved resiliency. When you have on-site renewables on a building site or within a community, they improve the ability to handle power fluctuations and outages.

Finally, it really is a very targeted approach, because you invest in energy efficiency and renewable energy in the regions where they are most needed.

It does make a lot of sense. Often you hear the concept of net zero energy. In Canada, we actually don't need to generate more energy. We have enough energy. What we need to do is to reduce the carbon footprint from the energy that we're using in transportation, in buildings, and so on. The net zero concept basically says that you need to generate the same amount of energy that you take from the grid and from other sources. But we have plenty of energy, so that should not be a main driving force towards a low-carbon economy.

In terms of our recommendations, I would like to focus on two, actually.

We need to consider the type and the location of the energy generation when designing renewable energy programs. The need for low-carbon renewable energy varies greatly across the country as a result of climate, the choice of electricity or fossil fuels for heating, and the carbon intensity of the grid.

Governments and regulators should look at buildings not in isolation but as part of a larger energy system. What does this mean?

Buildings can generate renewable energy on-site or it can be procured from off-site. Governments and regulators must encourage renewable energy generation on all scales, and not just one solution. It can be the roof of a building, or it can be a wind farm miles away.

The second part is that to reduce costs and increase uptake, renewable energy generation products should be designed to be integrated into buildings, such as building-integrated photovoltaics. This is an area that's been around for a number of years but really lacks the support to make.... The best way to put it is that you don't have unattractive solar panels on the roof; they become, actually, quite a beautiful design element. Construction of these buildings is actually cheaper if you integrate these than if you add them on to a building.

In terms of the questions you posed for this committee meeting, there are a number of institutions that could really help leverage this clean renewable energy technology. One would be the National Research Council. There are also Natural Resources Canada's office of energy efficiency and Canmet; SDTC; Infrastructure Canada; and of course, in terms of skills and capacity development, HRDC.

In terms of policy instruments, I think the best policy instrument you have at your disposal right now is the building code. The building code is a way to really move up the performance of buildings, maybe not to low or zero carbon, because everybody needs to have the ability to meet the code.

There's also room for voluntary action. There's room for research and development into these technologies, particularly how they apply to buildings and communities. Again, with voluntary action can come targeted investment, preferably from the private sector investing in buildings, which we already see happening, but also, on a larger scale, investment in buildings that have very low- or zero-carbon performance.

Thank you very much.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Mueller.

Mr. Spady, before I turn the floor over to you, we're joined now by Mr. Kresic, from Enbridge.

Mr. Kresic, just so you're aware, we changed not the format but the timing a little bit. Because we were running late, we started with all four witnesses. Mr. Ferguson started us off. I believe you caught part of Mr. Mueller's presentation. Mr. Spady is going to go next, and then we'll turn it over to you. You'll have up to 10 minutes for your presentation before we open it up to questions.

[Walter Kresic, Vice-President, Pipeline Integrity, Enbridge Inc.]

Thank you, Mr. Chair.

[The Chair, Liberal, James Maloney]

Go ahead, please, Mr. Spady.

[Cameron Spady, Director, Business Development, Cylo Technologies Inc.]

Mr. Chair, and members of the committee, we are Cylo Technologies, just a small software company. We want to thank you for inviting us here this afternoon. Mr. Gerling, beside me, is our company’s president and chief technology officer. I'm Cam Spady. My role is principal investor in a small company.

Cylo fits the scope of this study under the Natural Resources Canada definition of clean technology in the category of preventing any type of environmental damage, and more specifically as preventing environmental damage due to pipeline leaks and failure. We offer software and support services to oil and gas companies as well as petrochemical companies in Canada and the United States, and assist them in handling the volumes of data that they gather under the provisions and regulations of the applicable governing body, such as the National Energy Board and the various provincial regulators, and in turn enable their using that data to pinpoint pipeline defects and correctly target them for repair. What sets Cylo Technologies apart from systems currently in use with this same objective is an innovative solution, whereby we process all available data into a 3-D spatial model.

To explain why this is important to pipeline safety, I just want to talk a bit about the current industry methodology.

In-line inspection data, or ILI data, is the information gathered by pipeline inspection devices known as smart pigs. The information collected by these devices is high-value data capable of detecting very tiny flaws, but in doing so they generate burdensome reports. Pipeline operators then use these reports to evaluate the overall condition of the pipe and categorize, target, and locate specific flaws for repair. The data is processed in systems using a current industry standard known as the geographic information system, or GIS. Interestingly, the world’s first true operational GIS was developed here in Ottawa by Dr. Roger Tomlinson, for the federal Department of Forestry and Rural Development, and was called the Canada geographic information system, or CGIS. The year of its development was 1960.

Geographic information systems evolved from this made-in-Canada innovation and are the bedrock upon which pipeline integrity programs currently run, but GIS is a system with a host of limitations. The two main limitations are the amount of data that can be processed using this technology and the spatial accuracy of trying to locate pipeline defects in a system that uses a two-dimensional implementation. To ease the burden, ILI data is filtered to be processed, and meaningful defects are missed entirely. The consequence of this is shown in just a few statistics compiled by the Canadian Energy Pipeline Association, or CEPA, for their most recent 2016 performance report for the period 2011 to 2015.

Unpreventable incidents, like external interference such as unauthorized excavation and geotechnical and natural disaster, account for only 18% of the total. The remaining preventable causes account for 82% of incidents. These include pipe cracking, metal loss, and materials, manufacturing or construction, and are all causes detected and reported by smart pigs, but are only of value if evaluated properly.

I propose that the technology Cylo has developed does just that. Reports now available publicly seem to indicate that the spill of 220,000 litres of oil into the North Saskatchewan River in July 2016 was a preventable incident based on the post-event analysis of data that the pipeline operator had in its possession before this significant leak occurred.

To quickly address some of the specific questions put forward in the clean technology focus document, I'll answer the question of whether the technology will perform as expected. The answer is yes. Cylo Technologies software has been available and in use commercially since 2011. In this time, none of our clients has had a reportable event.

Which institutions and instruments can the federal government leverage to de-risk clean technology adoption? We believe the National Energy Board, the NEB Act, and the recently enacted Pipeline Safety Act all currently have very effective provisions to ensure pipeline safety, but I believe the NEB is hobbled by practical limitations of current investigative tools, and is thus reactive rather than proactive when it comes to pipeline situations that lead to environmental damage.

Last, I invented this question a bit. Could new regulations improve pipeline safety? Our position as a solution provider enables us to be intimately familiar with the industry while not being biased by the public responsibility that falls on the pipeline operators. From that perspective, we believe that any further regulations that aren’t designed to foster a deeper understanding of the data would be counterproductive. Mandating more data collection and more frequent pipeline inspections would further compound the current industry challenges, where the answer to stopping the flow of pipeline incidents is in more thorough use of existing data collected and reported under current regulations.

Furthermore, we suggest the possibility of the NEB being able to use and/or recommend specific technologies. As Cylo has demonstrated, some of these technologies are developed and owned privately and are thus currently prevented from being used as investigative tools.

Mr. Chair, in conclusion, I would like to say that Cylo Technologies understands and promotes the evidence that pipelines are the safest and most efficient way to transport all fluid commodities in Canada, and they do so with the lowest carbon footprint of all the various methods. We would also like to say that there is still room for improvement in the industry through the use of clean technologies, such as ours, which are the focus of this study.

Thank you so much for the opportunity to present to the committee.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Kresic, it's over to you.

[Walter Kresic]

Thank you, Mr. Chair.

I am getting some feedback. I'm not sure if the technician can [Technical difficulty—Editor]. I might be the only one [Technical difficulty—Editor].

[The Chair, Liberal, James Maloney]

Could you hold on for one second, because you're not coming through clearly at this end, either.

I am told we have a solution. If you go ahead, we should be able to hear you.

[Walter Kresic]

Thank you, Mr. Chair.

Good afternoon. My name is Walter Kresic. I'm the vice-president of pipeline integrity for Enbridge Pipelines. My focus is on the oil pipeline side of the business, which comprises approximately 27,000 kilometres of large-diameter pipeline and facilities spread across North America.

The act of maintaining pipeline systems as we do requires a great deal of technology and technology advancement. As well, I oversee the research and development and the innovation framework for Enbridge Pipelines. The role there is for us to drive the culture of innovation deep within all aspects of our organization. I'm going to use Enbridge today as an example of how a large organization stands ready to drive innovation within all aspects of our operations but also on the clean technology side.

I think some slides were distributed to the panel today. I'm on the second slide that shows the map of North America. The idea there is to show the massive footprint of the Enbridge organization and the scale and magnitude of this energy infrastructure business.

It's hard to put into perspective from looking at a one-page map, but I'll provide some simple statistics. This is the longest oil pipeline system in the world. It's a dominant shipper to the U.S. of production in Canada. It has the largest gas distribution business in Canada, bringing heating gas to people's homes. It's the second largest wind and solar producer in Canada, with a strong, growing presence in the United States and Europe. It's also a large player in gas gathering in the Gulf of Mexico at midstream. With the recent integration of Spectra Energy Corporation, now we also have one of the largest gas transmission and storage businesses in North America.

Of course, you can see that a lot of the infrastructure we have touches ocean to ocean to ocean from coast to coast to coast. We have frontier pipelines and many challenges that we've had to face in building this very complex infrastructure.

This type of scale and organization takes on a very influential role in Canadian society, and we deeply recognize the geopolitical and macroeconomic challenges that face us. To face those things, we have to obviously act sustainably and responsibly. It's vital to us as an organization that we appreciate all these complexities. We take a long-term view in how we bring utility to a society. Because of these challenges, the systems for innovation become part of our business structure. We look at objectives and plans in organizational structure with a view to innovation. That includes how we operate in areas of clean technology, which I'll get into detail about now.

Please go to the third slide. The slides aren't that critical, but nonetheless, they are there for some support.

There are two opportunities I would like to suggest within this initiative. Using Enbridge as an organizational example, this company Enbridge, as I mentioned earlier, leads in clean technology adoption, in the generation of wind power, solar power, geothermal, fuel cells, and so on. These are our new forms of energy generation, and we've taken a strong leadership role in Canada for advancing them, so we're obviously familiar with the adoption of clean technology. However, until renewables become built up, in taking the long view we also understand that it's important to recognize we're going to rely on the existing infrastructure while we transition.

In terms of the first opportunity I would like to present, and it was mentioned earlier as well, we believe the decarbonization of existing infrastructure holds a great deal of opportunity. First, we begin with keeping our infrastructure safe and keeping oil and gas within the pipe. This, of course, is a mission critical activity for us and one that helps drive our innovative culture.

There are also a lot of other opportunities. Vapour emissions from the massive storage tanks we have spread out across Canada and the United States.... The gas pipelines have many points where methane gas emissions occur. This is well known and well studied, and now a further advancing part of the infrastructure business to trap methane gas emissions. How we convert electricity from coal-fired to gas-fired....

We're now converting the cars in our fleets and using them as examples for other industries. Within our huge infrastructure, we have many kinds of equipment that require power. We're looking at developing more efficient systems for using that power, and systems that reduce the greenhouse gas emission concerns. We take a very hands-on approach to working with our homeowners who buy the gas we distribute to them, and we strive to find ways to reduce their use of that fuel source.

All of these things are immediately measurable. The ability to measure these things and recognize them as successful can provide a means of growing interest across other industries and within our society. Moreover, this allows us to continue to grow the capability we can create within our country for that type of thought process. We think simple measurement and documenting our success in the decarbonization of existing infrastructure can create access to a lot of low-hanging fruit and increase the value of our efforts in this regard.

The second opportunity I'd like to highlight is related to the power of Canadian thought leadership and looking at that as a commodity. On the pipeline side at least, and I would say in other industries as well, Canadian engineers and scientists are highly regarded. Much as the Swiss are known for making precision watches and the Germans are known for making sports cars, Canadian engineers and scientists are regarded as top notch around the globe. Many upstart businesses have begun in Canada delivering thought results to companies around the globe. Our company is approached by many countries from the Far East, Europe, South America, and Africa. They come to visit us and talk about how we structure our approach to pipeline design, construction, operations, and regulations.

All these facets are highly regarded around the world. It's through Canadian ingenuity and our thought leaders that we arrive at this. There are many successful businesses that export thought leadership. We look at clean technology as sometimes being a widget. A very important part of technology is the peripheral components, which are also critical to making things successful. I'm talking about the analytics, the organizational structuring, and the strategic planning. Many of the human-based thought processes, which many companies have sprung from on the pipeline side, also serve as a model for clean technology development in many industries.

It all has to do with the power of people. Whether it's the training that Canadians have received, the experience they have, or the general Canadian attitude on the pipeline side, Canadians as technologists and scientists truly are leaders in this realm. We think this is a model that can serve in many industries in Canada.

Those are the two opportunities. I want to touch quickly on policy and instruments.

We take a long view on energy infrastructure development and management. For us, this means that the huge investments in our industries require us to access capital, and that is often the challenge.

There are three key points that I want to highlight regarding policy and instruments. First of all, our regulator, the National Energy Board, has a powerful and a very authoritative mandate to ensure that we focus on mission critical activities and remain responsible. They have two strengths that are generally regarded as interesting to outsiders, to observers, and to us. One is that they provide a one-window approach to managing our infrastructure. The second, and it's nuanced, is that they are built upon a goal-setting approach rather than a prescriptive approach.

We work our business in many jurisdictions, and we find that the goal-setting approach is, like the one-window approach, a far more efficient methodology than we see in some of the other jurisdictions we work in. It has many benefits that are intrinsic to innovation. For example, in a technical society, engineers and scientists tend to prefer working towards goals, as opposed to prescriptions. We can always achieve compliance. As a big company, we will always strive to achieve compliance. What we find, though, is that compliance-based regulations often provide too low a boundary.

We feel we can do much better, and by setting the goal, engineers and scientists then can use the best techniques possible, seek the best methods possible, and also drive in efficiency and effectiveness far better than compliance-based or prescriptive-based regulations. This is the strength that we see in our national regulator, the National Energy Board. It is also the strength that countries around the world have been studying.

The next item I want to talk about is societal common ground. As responsible companies and engineers, we feel that we're providing a positive contribution to society, but we all know that energy infrastructure is not viewed in the same light as it is by those of us who are in the inner circle. We appreciate that there's low trust in corporations and energy infrastructure. What the public doesn't understand is that it is organizations like Enbridge that have the best engineers and scientists in the world, and there are many organizations like us. We also work as hard as we can in the Canadian realm to be as responsible a corporation as we possibly can. We compete against the need for our being able to do a better job connecting with the societal calling. For us, we're moving down a journey. In terms of instruments, we could use assistance within that realm, whether it's from the federal government or some other agency, to help us with that translation.

One option we would view as possible is for the government to set performance targets. It's similar to goal setting that's done through our regulator, but through this initiative, setting performance targets would allow engineers and technologists to view them as their goal and would also allow a measurable system for us to track our progress. There are similar circumstances around the world. The United Kingdom health and safety executive has a system relating in that way. Also, if you look at other industries, which we tend to compare to more these days, the aviation industry has also gone through threshold moments and has also set performance targets. It has helped them progress into a very advanced industry.

Finally, the last point on industry coordination is that there are many great agencies within the energy infrastructure industry, the companies, the regulators, and researchers. Individually, they all do very well, and from time to time they connect, but once again, in comparison to other industries, such as the aviation industry, we don't coordinate as a team. That might be where the federal government could provide some assistance. On the aviation side, the federal government and governments around the world do work together with companies, industry agencies, and aviation companies, and they deal with things like technology transfer and adopting new technologies for bettering their industry.

As well on the coordination side, I just want to finish off by saying the reason a lot of the technologies don't succeed is that many of the upstart ideas don't appreciate that technology transfer is a long supply chain of activities. It's not just about the item or the thought; it's about all of the steps prior to it, the analytics, the organizational behaviour, and the many things that require merchandising in part of the technology transfer supply chain. It's something I wanted to raise that might be somewhat useful to furthering the cause.

I'm not sure if I've gone over my 10 minutes. I want to thank you for this opportunity.

[The Chair, Liberal, James Maloney]

We gave you a little extra time because you cut out at the beginning, so it all evens out.

[Walter Kresic]

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Kresic.

Mr. Lemieux, over to you.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

I want to thank today's four witnesses for their excellent presentations.

My first questions are for the representative of the Canadian Association of Petroleum Producers. I’m very interested in the emerging technology related to biofuels. I know that a number of Canadian companies are developing processes to produce renewable natural gas from forest biomass.

Mr. Ferguson, is your association interested in these new technologies that produce natural gas from forest biomass?

[Alex Ferguson]

Thank you for the question.

Yes, we are, but of course some of them are interactions or specific companies in our membership that are involved in some of those investments. From a broad association perspective, we're pretty preoccupied with many other things, so we haven't gone directly into the space of looking at policy options or promoting anything related to government or investments in that area directly other than through our individual members.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

In Canada or abroad, have you come across companies that have successfully mastered technologies to convert forest waste into renewable natural gas?

[Alex Ferguson]

I can say personally that I'm originally a forester by trade, so I know that sector quite well. I have had experience in a previous time in that part of the sector, and on biomass in particular.

I wouldn't say that we've done a lot of interactions in that space. Most of our members focus on other sides of the renewables in terms of what our interaction is with the shift towards more renewables for electricity generation and how we fit natural gas into that story. We're pretty preoccupied with that.

Of course, many of our operators, because of the remoteness of many of our sites, rely on solar-type installations for many of the facilities. I think that's generally our space in there.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

As a result of our current forestry situation, and knowing that Canada has the third-largest forest area in the world and that our forests store significant quantities of carbon dioxide of fossil origin, our government announced a $21.9-billion investment plan in the recent budget to support green infrastructure. The goal is to encourage the use of renewable sources of energy to help with the commercial development of technologies to convert forest biomass into renewable natural gas, for example.

Mr. Ferguson, do you believe this association between the forestry industry and the gas industry would be desirable to re-energize our forestry industry by establishing a market for renewable natural gas created using forest waste?

[Alex Ferguson]

Absolutely, and we already have a lot of alliances and a lot of efforts that we share with the forest sector broadly speaking, in many areas of developing and using the forest land base. That's just the normal extension of a lot of the work that's already in place and of those relationships that are in place between the oil and gas sector and the forest sector.

We're putting together right now the final stages of our proposal to the federal system around our innovation cluster, and I think you'll see that there are a lot of links and alliances with other sectors buried in our structure. We are live to that and working towards that.

[Denis Lemieux, Liberal, Chicoutimi—Le Fjord, QC]

I'm excited about the possibility that one day we'll be able to export, for example, liquefied renewable natural gas. This would greatly improve the social acceptability of oil and gas projects in Canada.

In closing, I quickly want to hear how our four witnesses think the new carbon pricing will affect the development and implementation of new made-in-Canada technologies?

We could start with Mr. Ferguson.

[Alex Ferguson]

Certainly for our sector, first of all, for most of where we operate, we've been operating under some form of carbon pricing mechanism already, but also, there's a lot of drive that our sector has had. You can look at Canada's Oil Sands Innovation Alliance. It was not driven by a carbon pricing mechanism. Those millions and millions of dollars of investment in projects were driven by the need for looking for energy efficiency gains as part of that.

Certainly in Alberta, as we move forward with a new kind of modified structure around carbon pricing, there's no question, I think, that it will be our intent. Our drive for that is to look at how that increases the focus on technology and innovation investments. It will be a driver.