Natural Resources Committee on May 24th, 2018

[Ted Falk, Conservative, Provencher, MB]

Sure. I'll shift my questions to Karine.

Karine, you talked about Canadian energy data being difficult to find, and how we're not as transparent as perhaps a lot of other countries are. On the east coast, we import a lot of Middle East oil, which is not subject to the same regulatory environment as our Canadian oil companies, and is also not necessarily agreeing to Paris climate objectives. What are your thoughts on how that could negatively impact our Canadian industry?

[Karine Péloffy]

I'll just answer the forest question first and then jump to that one.

Actually, unfortunately in recent years due to climate change we've had more intense forest fires and more insect outbreaks, which means that right now our forests are sources of emissions. They're emitting; they're not absorbing, unfortunately. That's something we probably need to look at, especially when we think of developing massive extractive industries in those forests.

The Fort McMurray fire was close to $9.9 billion in damages, so maybe it's something we need to look at, and not just from a climate perspective. In the future we will need to be looking into that because the Paris Agreement does speak of reaching a balance between sources and sinks of emissions, so technically if we make human enhancements to natural sinks that are permanent, and verifiable and credible, we may be able to credit ourselves with action but there's no detail on that yet under the Paris framework.

As to the Middle Eastern oil, I don't agree with everything in the Middle East, mostly because women like me wouldn't have rights, but that's a completely different issue. It remains that for them getting oil is just making a hole in the ground and it flows out and, therefore, leads to way fewer greenhouse gas emissions on a life-cycle basis than our own oil. That's something that the work—

[Ted Falk, Conservative, Provencher, MB]

Do you support the importation of Middle East oil?

[The Chair, Liberal, James Maloney]

We're going to have to wrap it up here, so can you answer that very quickly, please?

[Karine Péloffy]

I support that we use the least greenhouse gas-intensive forms of oil for the time that we cannot avoid using it, but I'm for getting off oil as fast as possible.

[The Chair, Liberal, James Maloney]

Mr. Cannings.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, both, for coming before us here today.

I'm going to start with a high-elevation question for Mr. DeRochie, and perhaps Ms. Péloffy could step in as well.

I was struck by your comment that good data could lead to less political gridlock. I think all of us here would wish that were true. Perhaps I could just frame it. Here we're talking about a possible new energy information system for Canada. Perhaps you could just comment on what sort of information system would give everybody more trust in political decisions around energy futures, trust from both sides, people concerned about the environment and people concerned about industry.

For instance, what kind of good data could we send to British Columbia and Alberta that would get them on the same page and to say, yes, we should do this instead of that? Perhaps that's a bit too much to ask, but could you give just a general framing of what sort of data we need?

[Patrick DeRochie]

That's a good question. Why don't I use Kinder Morgan as an example, since it's so topical right now and you did bring up this political gridlock between Alberta and B.C.

In the NEB's review of the Kinder Morgan projects they did not consider global oil demand and supply scenarios that we're talking about that are aligned with the Paris Agreement, with Canada's own policies and commitments. They did not allow economic evidence that showed the cost and benefits of making this investment instead of alternatives during the review. They did not allow consideration of the impact of tankers going up the B.C. coast. They did not consider the downstream emissions of the projects. They did not allow cross-examination of the witnesses who wanted to testify there and of Kinder Morgan's lawyers.

They considered the upstream emissions but not the downstream emissions. The entire process involved Kinder Morgan presenting evidence and then all of the other intervenors, whether they were pro or against the pipeline, responding to Kinder Morgan's evidence. There was no testing of the evidence. There was no testing of the assumptions.

What I think we need is an energy information agency or regulator that provides the information independently and then allows both sides, the proponents and the public and the intervenors, to respond to that independent, third-party credible evidence that could come from the government and from expert witnesses, instead of being forced to respond with limited resources to a report commissioned by the proponents of the company, which obviously has an interest in skewing the numbers and hiding the datasets that they use.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Ms. Péloffy.

[Karine Péloffy]

I would agree with everything that's been said so far. I think providing for analyses of alternatives to projects, plans, and policies is one function that would be very important for an independent information agency, because right now, too often, alternative scenario development is left in the hands of a proponent who has all the interest in the world in portraying alternatives to this project as not feasible or impossible.

What sort of system can we trust? When we come to science, often peer review is one way to trust. That would be one key point. Ensuring the independence of the institution would be key. I think that's a failure across the board in the federal law reform we're undertaking right now. It should be independent of both government and industry so that we can trust more what they do.

To go back to the fact that our current information is not transparent and proprietary, Thomas the Apostle believed in Jesus only when he saw the marks. I think if we can open up those models and see what's inside them, then we can trust them better. This is better than having someone say that although they're not going to show us what's in the box, we should go ahead and trust them anyway because the output is good. That doesn't work anymore.

[Patrick DeRochie]

I'd like to follow up on that question a little bit if I have time.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Can I just reframe it a bit? You talked about granular data and modelling. I'm wondering if both of you could comment on the value of having granular data that everybody can agree on. This agency could provide some modelling, but it would also allow people on either side to do their own modelling and the data would be the same.

[Patrick DeRochie]

I'd like to defer to Karine on the granular data question, but I wanted to comment on MP Falk's remark about the regulatory system. I would argue that the reason that it was dysfunctional and that we're seeing this gridlock we're having right now is that we did not have integrated energy and climate data. When we were assessing these pipelines, there was no overarching holistic framework of aligning the greenhouse gas emissions associated with these projects with Canada's own targets.

Right now, we still have three pipelines. On Enbridge Line 3, we're looking at 565,000 barrels per day. We're looking at Keystone XL, which is 830,000 barrels per day and then Kinder Morgan, which is about 600,000 barrels per day more. We're looking at about two million barrels per day more of oil from Alberta that Canada wants to export. In what world is this possibly going to align with Canada's climate targets? In what world will there be demand for this high-cost, high-carbon oil?

Unless we actually have an energy regulator and energy information agency that provides the public with information on how you integrate these two competing interests, then we're going to have the dysfunction that we saw. A regulatory review of the pipeline should not be the forum for a debate about climate and energy data. It should be a forum like this done by an independent agency, not in the adversarial setting of a pipeline review.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Ms. Péloffy, would you care to comment on that and how we need good data to develop and monitor our climate target?

[Karine Péloffy]

On the granularity of data, I would give the question over to modellers, but I think it's a good idea. The idea of having all of this open to the public is not only to build trust but also because we're dealing with probably the most complex problem we've ever had to face in the history of humankind. Having many brains being able to look at the same thing and maybe come up with different ways to look at it has to be a good thing.

I would agree with what Mr. DeRochie said. One of the key things that is happening in this whole law reform around environmental assessment, one of the things where there's great consensus in industry, indigenous people's representatives, and environmental organizations—it just seems the government is not so keen on it—is the idea of strategic assessments. Having an independent information agency could feed into the strategic assessments, where we can see broadly what sources of technologies are available to us and which technologies should be going forward at a higher level. This way we would not have these debates in regulatory or environmental impact assessment processes, which are not the best places to have them.

[The Chair, Liberal, James Maloney]

Thanks.

Ms. Ng, we'll move over to you.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you, both, for giving us your perspectives today on this study.

I'm going to pick up a little on where my colleague Mr. Cannings started, which is your input on a data system that will provide credible data that has the confidence of Canadians and all stakeholders, those who care a lot about the country meeting its climate change targets, as well as those in industries who are necessarily going to be a part of the transition. Indeed, in this country, there has to be a transition. It's the responsible thing to do.

Do you have any advice for us around data indicators? You talked about the inadequacy of the data that's out there, or that it's not capturing the other side, the other side being what we should be looking at, what should be tracked, and where some of those sources of data may exist. We've heard from many people who said that the sources exist, but the analysis of it or the culmination of it is what doesn't.

Maybe you could both talk to us about some of those indicators we ought to be looking at in the course of coming up with a reliable data system for this country.

[Patrick DeRochie]

Sure. I'll mention a couple of examples.

One is in the area of methane emissions from the oil and gas industry. This is a gas that's about 80 times more potent in the atmosphere than carbon dioxide. It's extremely important that we avoid this to reduce emissions, to avoid climate change. Scientific studies, peer review studies, and academic studies show that the methane emissions from the oil and gas industry, whether they're from leaks or intentional releases, are significantly higher than what provincial and federal agencies are reporting.

We need to start—

[Mary Ng, Liberal, Markham—Thornhill, ON]

Doesn't that get collected now? Is it not an indicator that's collected?

[Patrick DeRochie]

It does, but it's not being collected properly.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Okay.

[Patrick DeRochie]

We have satellite data. We have these independent studies that show that emissions are as much as seven to 15 times more than what's being measured by the federal government.

Not only does this mean more emissions, but it also means that fixing these leaks, making these repairs, making these improvements to the oil and gas system means you're saving the methane and gas, and you're creating jobs, doing repairs, and improving operations in the process.

The second thing I would mention is the idea of carbon budgets. Right now the U.K. is a good example of who's doing this. We essentially need to look at Canada's targets, look at where we need to be in 2050, and then assign a budget of greenhouse gas emissions to each sector, or perhaps even each province, that slowly and steadily decreases toward 2050 and how we're going to get to that 80% or 100% reduction.

[Mary Ng, Liberal, Markham—Thornhill, ON]

What would be the data indicator to collect in that?

[Patrick DeRochie]

We have it right now. We have the greenhouse gas inventory. We have provincial facility-level and industry-level emissions.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Okay.