Evidence of meeting #98 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 models.
A recording is available from Parliament.
Vice-President, Canadian Natural Resources Limited, and Chair, Clean Resource Innovation Network
Titanium I know well. I have been involved with them for the better part of 16 years or so, as they have been bringing their technology through.
They're a pretty typical representation of a Canadian-built technology base. If early on they had been able to find more openly the work that would have been out there, obviously a lot of their initial time would have been saved, and their ability to communicate—
Liberal
Nick Whalen Liberal St. John's East, NL
That's great. I want to give Ms. Vaillancourt an opportunity to answer basically the same question.
How would an energy information administration in Canada assist your organization in doing your work? Is there something additional beyond what the U.S. collects that would be helpful, such as lists of scientific studies maybe, or other types of information that the U.S. isn't already collecting? How that would help your organization?
President, ESMIA Consultants Inc., and Representative, Canadian Academy of Engineering
It will help you and us to save time in terms of trying to build the data ourselves that are supposed to come from official sources. Especially if it comes already supported in Excel or other files, everything would be easier, because we can write scripts to import these data automatically into our model rather than rendering them one by one and trying to fill in the gaps and so on.
Liberal
Nick Whalen Liberal St. John's East, NL
Is there a dataset the U.S. doesn't have that you would like?
President, ESMIA Consultants Inc., and Representative, Canadian Academy of Engineering
The U.S. has a lot more data than we do regarding the stock of technology, so that would be good if we could have the same, yes. What the U.S. EIA doesn't have is what the international agency is trying to do with IRENA, the renewable energy agency based in the Emirates: technology briefs. For all new technology innovation, there is someone who takes.... I already did some of them, actually. You take one sector—for instance, a refinery, or a refrigerator, or appliances in the sector—and you build a brief in which you have the description of the different versions of the technology in terms of their efficiency, cost, and how costs could evolve over time. There are two or three pages for each technology. That should come on the market eventually. This, nobody really has.
Liberal
The Chair Liberal James Maloney
That's perfect. Thank you.
Thank you very much to the three of you for joining us this morning. It has been very helpful and very informative. Unfortunately, we're out of time.
We will need to suspend for two minutes and prepare for our next witnesses.
Liberal
The Chair Liberal James Maloney
We're set to resume.
From the Quebec Environmental Law Centre, we have with us by video conference Karine Péloffy, managing director. From Environmental Defence, we have Patrick DeRochie, who is here with us.
The process is that each of you will be given up to 10 minutes to deliver your opening remarks, and then we'll open the table to questions to both of you. You can deliver your remarks and answer questions in French and/or English, as translation devices are available should you need them.
Mr. DeRochie, why don't we start with you since you're here with us?
Patrick DeRochie Climate and Energy Program Manager, Environmental Defence
Thank you.
Good morning, Mr. Chair, vice-chairs, and MPs on this committee. Thank you for allowing me the opportunity to comment on the state of energy data in Canada and to offer my recommendations for future improvements.
My name is Patrick DeRochie. I am the climate and energy program manager at Environmental Defence Canada. We work to defend clean water, a safe climate, and healthy communities, and we challenge and inspire change in government, business, and people to ensure a healthier and prosperous future for all.
Today my presentation recommendations will focus on three key areas: one, improving the aggregation and quality of energy and climate data and its independence and harmonization across departments, agencies, provinces, and territories; two, aligning national energy data with Canada's domestic and international climate commitments; and three, improving national data about the transportation of oil by rail.
Right now Canadians, including businesses, industry, academics, governments, and NGOs like the one I work for, are lacking high-quality energy and climate data. We must rely on either the Canadian government's data, which is limited, incomplete, and non-transparent in its assumptions, or resort to data from other governments like the U.S. Energy Information Administration, or private firms like Rystad Energy. This is not in Canada's national interests nor is it useful for companies trying to invest in Canada, governments trying to make good public policy, or civil society organizations trying to ensure our energy systems protect the environment and human health.
Our energy systems are changing fast. We need credible and reliable energy and climate data to make informed, transparent, and accountable decisions that respect climate science while positioning Canada to prosper in a low-carbon economy.
Right now Canada is experiencing interprovincial feuds and political gridlock over disagreements about energy planning, pipeline projects, and climate action. This could be avoided if we had independent, harmonized, easily accessible, credible national climate and energy data to inform our decisions.
With its boundless renewable resource potential, imagine what Canada can accomplish with quality data to underpin a rapid transition to renewable energy. Imagine the disagreement we could avoid if the NEB, for example, had a pipeline review process that was informed by energy and economic data from a credible, independent federal agency, rather than economic modelling from a report commissioned by a pipeline company. Imagine the economic opportunity if we undertook the modelling needed to develop our full potential for clean technology and renewable energy, instead of relying on dated fossil fuel models that assume the Paris Agreement fails.
Canada can make this a reality but it must start with independent, reliable, harmonized energy data. To get there, I'm going to make the following recommendations.
First, follow through with the NEB modernization expert panel's recommendation to create a new Canadian energy information agency. The agency must have independent governance, be open and transparent, and have a mandate to provide timely public access to high-quality data. It must report quarterly on energy sources, supply, demands, and downstream consumption, and it should make independent government experts available as expert witnesses on energy project hearings.
Furthermore, Canada needs to ensure energy data is free, transparent, and publicly accessible by making it available in granular formats that can be analyzed and disaggregated. We need to reduce the time lag between the collection and publication of energy data. For example, I just checked the StatsCan website this morning to track the supply of refined petroleum products in Canada, and the most recent data I could get was from February, so it's already about three months old.
One of the key recommendations I'd like to highlight is the need to align national energy data with domestic and international climate commitments. As you know, Canada is party to the Paris Agreement to limit global warming to 2° Celsius and to strive for 1.5° Celsius. Under the agreement Canada has committed to reduce its greenhouse gas emissions by 30% below 2005 levels by 2030, and its mid-century strategy aims to reduce emissions by 80% below 2005 levels by 2050, so we're essentially talking about decarbonization around mid-century.
The Minister of Environment and Climate Change stated that these targets are a floor not a ceiling, as the Paris Agreement requires increasing an escalating ambition especially from developed countries like Canada with large carbon footprints.
Unfortunately, the energy data produced by the federal government is not aligned with its stated level of carbon reduction ambition. Every year the federal government as well as investors and businesses rely on Canadian energy demand and supply data that assumes the Paris Agreement will fail. I would just remind you that the failure of the Paris Agreement means that the impacts of climate change become catastrophic and irreversible. Don't just take that from me; that's the consensus view of the world's climate scientists.
For example, the NEB's most recent Energy Futures report that came out in late 2017 has a base-case modelling scenario that assumes Canada will decrease its emissions by just 5% below 2005 levels by 2030. That's just one-sixth of the way to our Paris climate target. The base case also assumes Canada will be using 9% more fossil fuel energy overall in 2030. This is completely out of step with the Paris Agreement and Canada's already weak targets under it.
At the same time that it projects fossil fuel use that assumes the failure of the Paris Agreement, the Energy Futures report also fails to publish variable oil price scenarios. The NEB produced just a single oil price scenario in 2017, one that was high enough to justify more pipelines and oil sands expansion.
It seems to me, considering the difficulties faced by governments, communities, and families whose livelihoods depends on the oil industry, that Canada should be producing energy data that plans for oil price variances like the one we saw in 2014 with the oil price crash. The NEB is doing a disservice to investors, to companies, to governments, and to workers by failing to model scenarios in which oil prices remain too low to justify new oil and gas expansion and investment in the oil sands, like we're seeing today.
These are a couple of examples of the kind of integrated energy and climate data that Canada needs to make informed choices about its energy future. Assuming that the Paris Agreement will fail is irresponsible. Assuming that the oil and gas industry will continue to grow for decades is out of step with the government's own climate targets. An energy agency that neglects to model for the low-carbon transition currently under way around the world damages this country's prospects of excelling in the low-carbon global economy.
There are good, smart, and dedicated people who work at the NEB, but they need to be mandated to include energy supply-and-demand scenarios that are in line with the Paris Agreement and Canada's climate targets under that agreement.
My final comments on national energy data are a bit more niche, but important nonetheless, considering the high profile of the public dialogue around this issue, and that relates to the transportation of oil by rail. Recently Canada has seen tragic accidents like the train derailment in Lac-Mégantic, that have made oil by rail a divisive issue. Canadians are rightly concerned about the movement of hazardous, flammable goods through their communities by train. Increases in oil by rail traffic are often invoked as a reason to build more pipelines under the claim that the volume of oil moved by pipeline and rail is substitutable. “If we don't move oil by pipeline, then it will be moved by rail instead, putting more communities at risk of a derailment” is something we often hear from industry proponents, from some government officials, and from the media. But the oil by rail data we do have in Canada suggests this is not true. If we want to be sure, we need to dramatically improve the quality of that oil by rail data that we do have.
Currently the NEB releases monthly numbers on the volume of Canadian crude oil that is exported to the U.S. by rail. However, the NEB data is presented in aggregate form without sufficient granularity to be of use. For example, the NEB does not track or publish where the crude oil originates, where in the U.S. it is headed, or what kind of oil is being transported, whether it's bitumen, synthetic oil, or lighter crude.
Meanwhile, StatsCan collects data about the movement of liquid fuels by rail within Canada. Like with the NEB, there is no granular data on the type of fuel being transported, where it is being transported, where it originates, or whether it is being transloaded onto tanker, export terminal, barge, pipeline, or going to a refinery. StatsCan has a rudimentary method for tracking the east-west movements of crude by rail within Canada, with loadings from Thunder Bay, Ontario, to the Pacific coast being labelled as the western division, and loadings from Armstrong, Ontario, to the Atlantic coast being classified as the eastern division. In effect, that's not very useful, and we don't know exactly where trains are moving oil either within Canada or to the U.S.
Between the NEB and StatsCan, as well as the Transportation Safety Board, there is a notable dearth of publicly available information about crude by rail movements in Canada. Considering there are widespread public safety, economic, and environmental concerns about crude by rail movements across Canada, a new energy information agency could publish more useful and accessible information. This is vital to an informed debate about the future of oil transportation in Canada. Without this basic data about where and how much oil is being moved by rail, we can't properly protect public safety while ensuring the safe transport of goods and commodities.
Canadians have a right to know what is moving through their communities by rail, how much, and when. The NEB, StatsCan, and TSB should look to the U.S. EIA as a model. It publishes monthly data on the movement of different types of fuels between American petroleum administration for defence districts as well as exports to and imports from Canada. Often those EIA numbers don't match up with the NEB and StatsCan numbers that are being produced.
The three Canadian government agencies should also consider consolidating all of the data about crude by rail movements under a single agency, that new energy information agency. The data collected by StatsCan and the NEB, for example, should use the same classifications, metrics, and measurements to make the comparisons between those movements easier.
In conclusion, I would like to thank the committee for initiating this study. Ensuring that we have high-quality energy data and analysis is essential to good decision-making, and is especially critical in the current context of a rapidly changing energy system. I look forward to the recommendations that result from this study and to commenting on the study in the future.
I'd be happy to answer, to the best of my ability, any questions the committee may have.
Thank you.
Karine Péloffy Managing Director, Quebec Environmental Law Centre
I'm sorry I couldn't prepare a specific submission for my presentation today, but I'll basically be presenting some highlights of a collaborative and multidisciplinary research project on how to translate our international climate commitments into guidance for how we assess projects, policies, and programs in this country. It's a project that was funded by the Metcalf Foundation.
I'll also try not to repeat what my colleagues have said, because some of the materials covered by Ms. Vaillancourt and Mr. DeRochie overlap with what I was going to present. I'll mostly focus on climate information, which to me is the flip side or the dark side of energy information, in the sense that it's the side of the cost and the damages that are overall still invisibly being offloaded on to society as a whole. I think what passes as economic analysis in this country could be more accurately described as a listing of benefits. Unless we're disclosing the costs and the damages that are being socialized through the privatization of those benefits, we're only just listing benefits, not doing actual economic analyses.
I have two preliminary remarks before diving in on climate. I guess the gold standard in law—because I am a lawyer—in terms of providing information would probably be to adopt the Aarhus Convention, which was adopted by European countries. It provides for a right to information, a human right to information in environmental matters.
I also support, as Mr. DeRochie pointed out, one of the main recommendations of the expert panel on the NEB modernization, which is the creation of an independent energy information agency that could provide credible and critical data information and analysis for informing energy policy and strategy. I fully support this recommendation, and I'm somewhat sad that it has not been picked up in the current law reform exercise being undertaken by the federal government.
Put simply, I fear that not having good climate information allows what I call the second wave of climate denialism, in the sense that now pretty much everyone seems to agree that the problem is real—well, maybe not everyone south of the border—but we still fail to recognize the scale and the pace of change that is required to try to avoid the most dangerous aspects of climate change. That means we risk focusing our actions on the wrong priorities. We risk focusing on making reductions at the margin, trying to make our oil slightly greener, slightly more efficient; whereas what's actually required right now is transformational change.
We risk locking in “greenhouse gas intensive” infrastructure, which will make it almost impossible for us to reach our commitments in the future. As an example—one that is in the news a lot these days—the existing Trans Mountain pipeline has been in the ground since 1950. That's roughly 70 years. If we put a new one in the ground, I'm guessing the company will expect to exploit it for the next 50 to 70 years, and that's way past the deadline by which we need to be fully decarbonized. Not having that information allows some to make propositions that say this pipeline goes hand in hand with the environment. I think having good information would disqualify that statement.
Very briefly, we can understand climate change and what we can do about it by using models. I'm very happy to see that Madam Vaillancourt was testifying for the Trottier project. I'll skip the quotes that I was going to use from them.
Basically, models are essential to understanding the climate and energy systems. However, the outputs of those models are greatly impacted by the parameters, the data, and the assumptions that feed into them. In this space, transparency is absolutely crucial.
I won't repeat what the Trottier foundation had said, but I will summarize the words of Catherine Potvin and the scholars who were behind “Re-energizing Canada: Pathways to a Low-Carbon Future”. Their key finding number two was that governments should “support the establishment and improvement of technology-rich, open source, well-documented scenarios and optimization models that can be used by researchers to explore pathways and inform policy and investment decisions.”
As has been stated, the models that are being used in Canada, whether it's the National Energy Board or Environment and Climate Change Canada, are more like black boxes. They are considered proprietary and we cannot really see what went into the machine. We just get an output and we can't test its robustness. That leads to less than ideal assessments of decisions.
Noteworthy, in our research project we reached out to all the teams that do modelling of decarbonization pathways like the Trottier energy futures project. They all gladly shared their data with us so that we could compare. The only one that did not answer our call was Environment and Climate Change Canada. The devil is in the details, and the details are not accessible.
To contrast with that, I would briefly say that best practices in this field seem to be how the U.K. approaches its climate policy based on carbon budgets, and how it teams up with universities about using models. I will also refer to resources by the California Air Resources Board, which seemed more transparent than what we have available in this country right now.
Another aspect—now leaving the technicalities aside—that is missing is an analysis of the political economy of energy systems, power structures, vested interests, and so on. It has been found to be a very important factor in the transition towards low-carbon energy in Germany, and it seems to be an issue that Canada grapples with. There are legal scholars, like Jason MacLean, who are writing about the problem of regulatory capture. Some are now saying that the oil industry may have created a deep state in Canada. I think these are statements deserving of investigation and may be one of the reasons we don't have such good information.
Now, trying to get more into the weeds and details, there are two issues which, I think, highlight some important deficiencies in the Canadian system when it comes to climate. One is land-based carbon. Internationally it is becoming more evident that carbon stored in forests and biomass is very important, and increasingly the importance of soils is being recognized as a very important source of carbon storage.
Canada with its huge land mass is the second-largest holder of peatlands. We store up to 150 gigatonnes of carbon, and that's probably an underestimate because our mapping of peatland in Canada is lacking. I think efforts have been started in Quebec and will be soon in Ontario, but overall, we don't really know where they are. Some other jurisdictions know where they are. One area that is particularly rich in peatland and, therefore, is an important carbon reservoir is the area where the oil sands are being exploited.
It's an important issue. Land use emissions associated with the exploitation of the oil sands was assessed in the United States by the Obama administration when they assessed the upstream emissions associated with the Keystone pipeline way back when. It is also included in the way that California designed its clean fuel standards, by assessing the whole life cycle of fuels in an open source, transparent, and accessible model. It has reviewed 67 types of Canadian crudes only, and their values for carbon intensity are among the highest in the world. Maybe some in Nigeria are higher, but we have the highest in the world. One of the reasons is the importance of those land use emissions associated with the exploitation.
The most recent research I saw from 2015, still in the U.S., said that they had previously underestimated the greenhouse gas association with land use disturbance. They forecasted that based on the forecasted production from open pit mines and in situ installations in Alberta between 2012 and 2030, the result would be between 107 million tonnes and 187 million tonnes of greenhouse gases only from land use disturbance. I repeat, no jurisdiction in Canada is assessing these emissions or counting them, and these emissions were also not included in the assessment of upstream emissions for the Trans Mountain pipeline. I fail to see how a foreign jurisdiction is better placed than we are to assess things that happen on our territory.
Another example—
Liberal
Managing Director, Quebec Environmental Law Centre
Okay.
Very quickly—maybe we can go deeper in question time—the social costs of carbon is a way of trying to assess the damage associated with the emission of one tonne of carbon into the future for that specific year, and then discount it back to a present value today so that we can compare it with costs and benefits today.
It is widely used in cost-benefit analysis. Actually, it's the basis of regulatory impact analysis for climate action in Canada. So long as it is used, I think it requires a serious upgrade along the lines of what the National Academy of Sciences recommended in the U.S. in 2017.
It's controversial, first, because a stable climate is not a good to be traded. It's the foundation of survivable—you might say—societies, but as long as economic benefit analysis remains trendy, I think it is important to put a cost to climate damage and to do so in a transparent way that actually shows the ethical and the justice trade-offs that happen in considering these things.
Very briefly—
Managing Director, Quebec Environmental Law Centre
Actually, I'll stop here and expand in the questions if someone is interested in this.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you, Mr. Chair.
Ms. Péloffy, Mr. DeRochie, thank you for your testimony, and for your research and data collection work.
My first question goes to you, Mr. DeRochie.
Some witnesses have told us that other countries are much more advanced than Canada in collecting data on renewable energy. Do you agree with that statement? Do you have any recommendations on specific things that the government could do to improve data collection in the renewable energy sector?
Climate and Energy Program Manager, Environmental Defence
A lot of my research applies to the oil and gas industry a lot more than to renewable energy. I can make some brief recommendations on this, but I just don't have the level of detail on the renewable sector as I would on the fossil fuels sector. The short answer is that, yes, other countries do have much better quality, reliable, credible, aggregated information about renewable energy, including the U.S. EIA. Germany and the U.K. are also good examples.
I think one area where Canada could improve is in assessing interprovincial electricity sharing. There are a lot of savings that can be made by transmitting electricity across provinces, such as hydro from B.C. and Manitoba to provinces that are using coal-fired or gas-fired power plants, for example, in order to reduce emissions. This would also be a cost-savings for a lot of provinces, as that hydro is incredibly cheap.
The other thing is that I don't think we've aligned the pan-Canadian framework with Canada's renewable energy potential. If you look at Canada's wind potential on the Prairies, if you look at Canada's solar potential in a lot of areas, if you look at Canada's tidal potential on the east coast, for example, we're not really factoring in how useful that can be in 2030 or 2050. I think we should be looking at the opportunity and at the economic opportunity of creating those jobs associated with renewable energy, instead of focusing so much attention on the economic costs and benefits of fossil fuel expansion.
Liberal
Marc Serré Liberal Nickel Belt, ON
We talk about Canada's north, and we look at northern Ontario. I know you've done more with regard to the oil and gas. I don't know if you've done mining or the potential of developing the north more. There's huge potential moving forward. Do you believe that we should be making more investments in data, more investments in geo-mapping, to try to unlock some of this potential in northern Canada and across the country?
Climate and Energy Program Manager, Environmental Defence
First, I apologize that I'm not answering your questions in French. You probably assumed that I could speak French from my last name, maybe.
I don't do a lot of research in the mining sector. I would recommend that the committee talk to someone from Clean Energy Canada. This year they released a report that—
Liberal
Marc Serré Liberal Nickel Belt, ON
What about oil and gas in northern Canada and the potential there?
Climate and Energy Program Manager, Environmental Defence
Is the question about whether we need more data on it?
Liberal
Climate and Energy Program Manager, Environmental Defence
I would make the argument that increased exploration and development of oil in Canada's north, whether it's land-based or in the Arctic, is a no-go. It's a showstopper. We should not be exploring for more oil right now, considering that Canada is already blowing through its climate targets and is not set to meet those climate targets.
We need to start looking at the fact that there will be a decreasing global demand for oil in the near future. It's not just environmental organizations saying this. Companies like Shell are starting to say that. We're looking at peak oil demands globally by perhaps 2025 or earlier. So to spend money and resources on exploring for more oil in remote areas or in the Arctic is a terrible idea. You'll just end up with other stranded assets or wasted money, because we won't need new oil if we meet the Paris Agreement.
Liberal
Marc Serré Liberal Nickel Belt, ON
Ms. Péloffy, in terms of energy data, do you think that, if we invest in better data collection, it will help us reach our targets under the Paris Accord?