Natural Resources Committee on May 24th, 2018

[The Chair, Liberal, James Maloney]

Good morning, everybody. Welcome to our study on the current state of national energy data, which has proven to be a very interesting topic.

We're grateful to our witnesses for coming today. From the Canadian Academy of Engineering, we have Kevin Goheen and Kathleen Vaillancourt, and from CRIN, we have Joy Romero.

It's nice to see you again. Thank you all for coming.

Joy, I think you're familiar with the process.

We give each group up to 10 minutes for a presentation, and then we open the floor to questions around the table. You can deliver your remarks or answer questions in French and/or English. There are earpieces there should you need them for translation.

Let's start with whoever wants to go first.

[Kevin Goheen, Executive Director, Canadian Academy of Engineering]

Good morning and thank you for inviting us.

I'm the executive director of the Canadian Academy of Engineering. The CAE, just by way of background, is one of Canada's three national academies, the other two being the Royal Society of Canada and the Canadian Academy of Health Sciences.

Let's go back to 2011. One of our fellows, Lorne Trottier, believed that it was important to create a project that would help guide Canada toward deep greenhouse gas cuts, so he financed, through his family foundation, a project that eventually became the Trottier energy futures project. The project went on for about five years and it wrapped up in 2016. When it did finish, it was under the management of the CAE and some contractors we had hired to project-manage the report. It was seriously peer-reviewed at the end of the day, and the results came out in 2016.

As part of the project, there were two primary mathematical modelling teams, Kathleen Vaillancourt's company and another company based here in Ottawa called whatIf? Technologies.

I won't go into the details or conclusions of the report. That information is available on our website if people are interested. However, in the process of doing the modelling and having all the models communicate with each other and provide us with useful results, the modelling teams found a number of major shortcomings in the data that is available. That is why we're here today: to talk about the problems that we encountered during that work.

With that, I'll pass it over to Kathleen.

[Kathleen Vaillancourt, President, ESMIA Consultants Inc., and Representative, Canadian Academy of Engineering]

Thank you again for inviting us here.

The point we want to make about the current state and future of national energy data is obviously in relation to our modelling activities, which are our core activities. Models, in fact, are great tools to support policy-making, but they are very necessary when it comes time to analyze very complex issues, such as managing major energy transitions to reduce greenhouse gas emissions without compromising economic growth and taking into account social preferences.

Energy system models, in particular, are more important for many reasons. The two most important ones are, first, to understand the magnitude of the problem, which is not necessarily obvious to the public in general nor even the government officials we are working with. The second thing is to explore and identify the most cost-effective pathways that would allow us to achieve ambitious greenhouse gas emission reduction targets, like the one Canada has proposed for 2050, and reach a low-carbon economy, which would be healthy.

All over the world, the results coming from these models are increasingly used to inform policy-makers, but also industries and any organization or individual who could be impacted by a change in the energy supply-and-demand dynamics, by energy prices, or by greenhouse gas emissions and their impact. Actually, the specific categories of models we are using right now are used in more than 70 countries around the world already, for both energy and climate policy analysis. However, the relevance and usefulness of these models are strongly dependent on the input data to start with. This is why it's very important and quite urgent—according to us—that Canada puts in place a program or an organization, or whatever entity, that would ensure good access to good quality data that are consistent and comprehensive for the needs we have, so that we can better help with policy-making and make the public understand the issues regarding climate change and the magnitude of the problem to solve.

In our brief, we have listed some of the most important gaps we have faced during the TEF project, and also different projects. We have been doing this kind of analysis for 15 years now. The intention here is not to repeat all of them—there's the brief for that.

Basically, gaps are more or less everywhere in all the dimensions of the data we need, including our very first starting point, which is the energy balances provided by Statistics Canada—the report is called “Report on Energy Supply and Demand in Canada”—which exist for the 13 provinces and territories. They are incomplete. They do not capture the emerging energies like biofuels or wind energy, and so on. There are many Xs all over the place, especially at the provincial level. At the aggregated level for Canada it's not too bad, but at the provincial level it's very difficult, especially in the industrial sector, and especially regarding the refined petroleum product production, trade, and so on. It almost doesn't exist anymore in the Atlantic provinces, or even in the western provinces.

The report data are not supported by more detailed and reliable statistics on the technology stocks that are behind the data on energy consumption. The office of energy efficiency, for instance, provides more detail on energy used by subsector and so on, but the technology stocks and so on comes from a survey that we know doesn't cover the full sector, so we are never sure if we can rely on these statistics or not.

We need the full bunch of data regarding the technical and economic attributes of technology that we put in our models.

The Canadian models we are running right now show 5,000 technologies used in each region, in each province in technology, so we have to look at these specific parameters one by one within a large diversity of sources, including reports, scientific papers, Ph.D. theses, websites of retailers, and even physical visits to retailers. I don't know how many times I've gone to Reno-Depot looking for specs of a new technology, the cost of the best-selling furnace for an apartment, and so on. It's a huge job to be able to compile a database for these models even in an ideal world, because these models are very much data-driven and this is very time-consuming.

Right now, in situations where the data are difficult to access, we spend a lot of time looking for data, trying to reconcile conflicting information, trying to fill the gap with our own assumptions, trying to validate these assumptions with experts in the field, and so on. Having access to better data would allow us to spend more time developing the model itself and implementing fancy stuff like smart grid and smart buildings, things that we don't necessarily have the time to do because we are updating our database. We could spend more time studying the problem and trying to provide some pieces of the solution.

Having said that, we have been quite successful in building a good database for Canada, but it required an intense effort for more than 10 years through consulting and research projects. That's why we can use the model today for policy analysis, but this work never finishes because every year we have to update the data and the energy balances, and we have to update the database each time a new technology comes on the market. For example, there was a big announcement recently on this new technology to make aluminum without process emissions. We are just looking forward to integrating that into our models, but we currently don't have data for that.

The last point we would like to make, which is not in our brief, is that we think that, along with the necessity of having an organization that would ensure better access to data and better quality data, we need to make the collaboration between data providers and data users stronger, because right now it's a bit difficult. We send emails and we write to data providers like StatsCan, in particular. Sometimes we don't even get an answer, or sometimes we get an answer, but three weeks later, with a copy-paste of a footnote of a table that is already in the report and that we have already read 10 times.

This is a bit difficult, when we try to know more about what is behind particular data, so a stronger collaboration would be better for us to better understand the data and how to use them, but it would also be better for the government, because then you know more about our needs and it's easier to set up the priorities, because obviously we would not be the only ones who will use this data. Many people are looking to have something similar to what we are suggesting.

I don't know if you want to add something.

[Kevin Goheen]

I think we're out of time, so thank you very much.

[The Chair, Liberal, James Maloney]

Thanks very much.

Ms. Romero, the floor is yours.

[Joy Romero, Vice-President, Canadian Natural Resources Limited, and Chair, Clean Resource Innovation Network]

Good morning. Thank you for inviting me to speak here today on behalf of the Clean Resource Innovation Network.

I'm here as the chair of CRIN. I also am the vice-president, technology and innovation, at Canadian Natural Resources Limited, which was the fourth-largest R and D investor for all industries in Canada in 2016, and the leader in oil and gas.

We use facts and data every day to make decisions. We want to be confident in the integrity and relevancy of that data. The challenge is to know what our goal is, what we need to measure to know if we have met our goal, what the leading indicators are that we can measure to control and ensure that we are progressing towards our goal, what tools we can use to analyze the data to allow us to make decisions to achieve our goal, and what control measures we can put in place to ensure we continue to meet or exceed our goal.

In the context of CRIN, our goal is for Canada to be the global leader in clean hydrocarbon production from source to end use. CRIN is a network. We are the glue, the connector of all the incredible innovation institutions, including universities, industry, government research bodies, entrepreneurs, incubators, accelerators, and financiers across our country.

I have seen in the reports from this standing committee that you understand that Canada's energy sector is an innovation success story, and one that you believe should continue. We, as industry, through CRIN, are accelerating technology commercialization by creating a technology pool, by sharing our gaps much more openly and articulately than ever before. Our data from COSIA, Canada's Oil Sands Innovation Alliance, has told us that when we do this, we significantly increase the quality of solutions that come to us.

When we as industry develop a path to commercialization with an entrepreneur, we immediately de-risk that technology and make funding easier, be it private or government. Clean tech developed in Canada is marketable globally, growing a strong, carbon-competitive, diversified Canadian economy.

Through tough times we have continued to invest in technology and innovation. In 2016, the oil and gas sector conducted 75% of the $2 billion invested in clean-tech research in Canada. According to the “State of the Nation” report, the oil and gas sector increased investment in R and D from 2009-15 by 1,400%, while the country as a whole declined.

Building on the knowledge of others is a fundamental component to accelerating commercialization. To date in Canada, this is not something that we have done well. Across this country, I have seen the same thing being invented over and over again in our research institutions.

As a country, we do not have the human resources, financial capital, or time to waste. With a better understanding of the industry's priorities and gaps, improved connectivity, and knowledge sharing across the network, we are creating a more focused effort by innovators, governments, learning institutions, and investors, including end-users. This results are a more effective and efficient use of time, money, and talent, thus driving better results.

The 2050 challenge, according to the World Business Council on Sustainable Development is to have nine billion people not just living on the planet, but living well and within the limits of the planet.

While OECD countries will likely see demand for fossil fuels decrease, non-OECD countries are projecting increased demand for all energy sources. Meeting this increasing global energy demand is where Canada can play its traditional role. Think of the possible global GHG emissions reductions when the technologies developed in Canada—that reduce GHGs by 20%, 40%, 60%, 80%, and even 100%—are deployed globally.

Through technology and innovation not only are we globally competitive and carbon-competitive, but we can play a lead role in reducing emissions both at home and abroad so that the full spectrum of Canadian energy—non-renewable and renewable—can be realized in Canada and globally, with Canadian know-how.

Innovation in the oil and gas sector is our strength, and it can spawn a new clean-tech sector focused on some of the world's greatest challenges related to the use of non-renewable fossil fuels. Canada's oil and gas sector has entered a new phase, where it is the disruptor, where the escalating effects of innovation and technology take hold, and Canada's leadership as a responsible developer of our natural resources is secured. Innovation will allow Canada to become the global supplier for responsibly developed energy, meeting growing needs with significant reductions in GHGs.

In its comments on the “Report of the Expert Panel on the Modernization of the National Energy Board”, the Canadian Association of Petroleum Producers expressed the industry's position on the issue of energy data.

Industry provides a significant amount of data to the government, including Statistics Canada, Environment and Climate Change Canada, Natural Resources Canada, and the NEB, as well as provincial authorities. Better use can be made of the information that is provided in terms of what is made available to the public, and likewise within government. Energy data provided to the government should be consolidated and rationalized so that duplication at the federal level is eliminated. The federal government should also strive to engage in sharing data and information with provincial authorities to maximize the value of the information and analysis that is already in government hands.

One of the biggest challenges facing technology and innovation is the lack of real-time data. This is a challenge for the entire innovation ecosystem, including government. Government is a strong partner with industry, but while government does a good job of monitoring financial outcomes, it is much weaker at documenting and tracking innovation outcomes. Traditional metrics such as the SR and ED program and patents are insufficient as they do not capture the whole picture. For instance, as an industry we are increasingly shifting away from patenting and are providing technology in the public domain to improve industry performance as a whole.

The data used in STIC's “State of the Nation” report is years old. We need to be able to see where we are now, and where we are going. What we need is a data communications platform that is searchable in real time, uses data analytics, and will connect all superclusters and innovators to a more fulsome picture of innovation in Canada. We need connectivity that is live and that captures all R and D activity, including activity for companies with less than 20 employees, which is currently not being captured. These companies are responsible for a large part of Canada's R and D, and this needs to be captured and linked to the larger ecosystem.

Traditional statistics are still important, but being able to take the pulse of Canada's innovation ecosystem at any given moment in time will tell us if we have met or are on track to meeting our goal to grow SMEs into large global corporations diversifying our economy and creating jobs.

I see every day the game-changing technologies being developed in our industry. I see how we are reducing GHGs. I see the value we create. I am proud to work in oil and gas.

Why am I proud to work in oil and gas? It's because I know the facts. Quite simply, Canada and the world do not know the facts well enough and it is leading to misinformation about our industry. Non-factual information is being widely spread, negatively impacting the reputations of governments, industry, and the hard-working people of the oil and gas industry. It is important that we have current, accurate, and meaningful data that can be used by a wide variety of audiences, both at home and abroad.

As important as it is to have good data, what we do with the data is even more important. There is a role for government and a role for industry in telling our collective story. The final piece in developing a plan is how to tell our story and renew people's faith in Canada and Canada's energy industries.

I believe that the single best thing that the government could do to work with industry is to develop a sustainable data communications platform that is searchable in real time, uses data analytics, and connects all the superclusters and innovators to give a more fulsome picture of innovation in Canada. This will facilitate better decisions and growth in innovation, get a bigger bang for the buck for both the government and industry in funding innovation, and provide Canadians and the world with a better understanding of how we are continuing to demonstrate leadership through developing clean technologies to reduce GHG emissions related to non-renewable fossil fuels so that the full spectrum of energy can be realized in Canada and globally with Canadian know-how.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Tan, you're going to start us off.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you, Chair.

Thank you, witnesses for being here with us.

My first question is for Joy Romero. You mentioned in your statement the lack of real-time data. What do you see as the main barriers for achieving better and more timely access to energy data in Canada?

From your notes, I see your network believes that society will benefit more from new technology and innovation when the sector, the oil and gas industry as a whole, works well together.

Given the highly competitive nature of the energy industry in Canada, how can you foresee the sector players being willing to share data to make the industry more effective?

[Joy Romero]

As an industry, we already have a long history of collaborating. You can look at how, in the oil sands, for example, it's over 30 or 40 years of industry collaborating as we've gone on. You have really deep collaborative sharing, as in Canada's oil sands innovation, where there is a commitment that every technology associated with various things is openly shared across that group.

We have also learned inside of that, that when we move that data to the public, the solutions we get back to close our needs with respect to greenhouse gases, for example, are so much more powerful. We can go to pilot with 30% of the solutions coming back, where normally it's only 2%. Within three to six months of receiving a solution, when we are very clear with the public and put out that data, much better solutions come back.

That overrides the competitiveness, because in Canada, we don't compete with each other. We compete with other basins. At $20 a basin from Eagle Ford, for example, what do we need to produce in Canada at $20? We believe we can produce at $20 with a much smaller greenhouse gas footprint, because we are already within 5% of an average global barrel for just the oil sands alone, let alone the fact that we have average global barrels as well. If you look at that whole net footprint for Canadian oil and gas, it is already significantly low.

We've already learned that we do that very well collaboratively, so that's not new. What is new that's happening right now in Canada is that we have the formation of the five superclusters, for example. Each of those superclusters—I guarantee you, because I've been talking to all of them, because CRIN is a non-government-sponsored supercluster—is developing communication platforms and platforms in which to share data.

If all of them are done separately, you will end up with five separate and different communication platforms, and NRCan's clean technology communities platform is already being developed. We could put all of these on a national platform, because what happens when you have government-sponsored organizations, whether we like it or not, we know that at some point in the future, some of those superclusters are not going to exist. What's going to happen with all that data and that open sharing on those platforms when that happens?

Canada can take that leadership to create a sustainable innovation, data, and communications platform, and then that grows. Regardless of the government organizations and whether accelerators or superclusters are developed, we still have that long-lasting continuous database that Kathleen was talking about, because we all suffer from that. If we can add open datasets to it, then anyone can grow from that knowledge. That data is protected by the person who has already developed it. Those protections are in place. The ability to take that, share it, and build on knowledge, that's the lifeblood; that's what makes things grow. We can talk about having collaboration, but unless data moves, it's not real or substantive.

[Geng Tan, Liberal, Don Valley North, ON]

Thank you.

My second question goes to the Canadian Academy of Engineering. It's nice to hear your model has been used in 17 countries.

From your statement, and also from other witnesses, the calls for a new Canadian energy information agency are getting louder and louder. Based on your experience as an engineering academy, how badly and urgently does Canada need such a domestic energy information agency? There must be a high cost to build such an information agency, or such an administrative agency. How can we afford to build and maintain such a system?

[Kathleen Vaillancourt]

It's really crucial for many reasons. We are not the only ones doing modelling in Canada. There are other very good modelling teams, and they have the same problem. On top of the modellers, there are all the energy analysts. We had a few meetings on the academic campus of the University of Montreal and invited different stakeholders. Everybody agreed that we need it.

Regarding the form it should take, the budget, and so on, I haven't done my homework on that so I don't have a strong opinion. Ideally, of course, it would be a mini-EIA, like in the U.S. We understand it cannot be that big or built overnight, but it should be something similar.

Kevin may have some estimates on a tentative budget.

[Kevin Goheen]

One of the papers we referenced in our brief was Michal Moore's paper, “A Proposal to Create a Pan-Canadian Energy Information Organization”. That paper indicated that the U.S. EIA had an annual budget of $122 million U.S. for fiscal year 2016. I would argue that a similar organization for Canada would be somewhat less than that. I don't know if you want to use the one-in-ten model that I tend to use for everything, but in terms of the overall problem that Canada and the world is facing on this, $13 million a year isn't very much.

[The Chair, Liberal, James Maloney]

Thank you.

Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair, and thank you, witnesses, for coming to committee this morning and for your testimony here. It's been very informative.

Ms. Vaillancourt, in your presentation you said you have access to data, but that a lot of it is conflicting data. Can you give this committee some examples of that conflicting data?

[Kathleen Vaillancourt]

It is happening at different levels. Sometimes I think it's happening because some organizations finish their data updates sooner than others. For example, the office of energy efficiency relies on StatsCan data, but StatsCan may update their data faster, so for the same oil consumption in one sector you will not get the same numbers.

A lot is also happening between provincial and national data sources. Sometimes it's even totally incompatible, not only in terms of energy but also in terms of emissions. The emissions inventory in Quebec is not at all the same as the Quebec portion of the “National Inventory Report”, so it becomes very difficult to try to match all of this.

[Ted Falk, Conservative, Provencher, MB]

Standardization of reporting would be helpful, then.

[Kathleen Vaillancourt]

Yes, between provinces and at the national level.

[Ted Falk, Conservative, Provencher, MB]

Very good.

When you calculate GHG reductions in an industry and in a sector, do you also take into consideration the sequestration by our vast amount of forests and natural vegetation?

[Kathleen Vaillancourt]

We could. We didn't include it in the TEF project, but our models can do that. Normally we work in collaboration with people who have better models for dealing with this issue particularly, but we use their supply curve for sequestration as a potential in our models.

[Ted Falk, Conservative, Provencher, MB]

Can you get accurate data on that resource?

[Kathleen Vaillancourt]

I know less about this area, but I'm sure it's also an issue, because we take the output of other models for that particular sector.

[Ted Falk, Conservative, Provencher, MB]

You talked about certain sectors not providing good data, and you mentioned biofuels and wind. Would solar fall into that category as well? Do you have data on solar?

[Kathleen Vaillancourt]

It depends on the data. All wind and solar power plants are documented in Canada. That's not a problem. However, the energy balance that Statistics Canada is providing for all types of energy—so starting from production, import, export, conversion to energy, and end-use sector—I didn't see it very recently, but it never covered the emerging energy. Even biofuel ethanol was not there. It's only the conventional data source.

Also, I think that the renewable electricity is aggregated. It is only one row, so you have to figure it out differently.

[Ted Falk, Conservative, Provencher, MB]

Okay.

In your opinion, from your organization, where would you like to go? What do you think would be a good source that you should be able to access for clean, reliable data?

[Kathleen Vaillancourt]

It would be a comprehensive energy balance, by province, to start with. We don't have any alternatives. We try to fill the Xs by looking at the past. The Xs are not always in the same place year after year. Our friends and colleagues from whatIf? Technologies, have a simulation model covering a longer historical part than us. By building year by year from history, you can try to fill in the X, by looking at different years when more data was available. There are a lot of tricks and cross-checks to be able to....