Natural Resources Committee on April 26th, 2021

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

Did you say 60% or something like that?

[Steven Jurgutis]

I might have mentioned as well in terms of....When I was talking about 60, I was referring to the number of anaerobic digestion facilities in operation in Canada. That's more of the secondary transformation of manure and food processing waste and that kind of thing into biogas and renewable natural gas.

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

Okay, but just to be clear, are you saying that a large proportion of our canola exports are used for biodiesel, or is it for cooking oil?

[Steven Jurgutis]

There's a combination of the two. I'll have to get back to you specifically on the breakdown in terms of what goes for fuel versus what goes into the production of canola oil.

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

Thank you.

I'm going to turn now to Ms. Littlejohns.

One of the real concerns here—and, I think, one of the important points—is the life-cycle analysis of all of these processes when we're producing biofuels of any sort, the actual greenhouse gas emissions over the life cycle of the processes. You said that your department or group does those analyses on various streams, whether it's forestry waste, canola, or corn for ethanol. Can you give us some of those figures, the life-cycle stats for each of those waste streams of agricultural products?

[Dr. Jennifer Littlejohns]

Thank you for your question.

Just to clarify, regarding the life-cycle analysis that the NRC completes, it's typically related to developing tools for industry and other government departments to make decisions on specific scenarios for biofuel production relative to a baseline. Often the baseline would be fossil fuels, so specific applications of our life-cycle analysis are related to utilizing feedstock for biofuel production to make decisions on what the best orientation of technologies would be, rather than making more global estimates of what the impact of changing the sector would be, which I believe Environment Canada has better information on.

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

I guess whoever is on this can best answer it. I think it would be really important to know, with all these possible sources of cleaner fuels, which ones are better than others in terms of that life cycle. Which ones are going to create the best future for us in terms of reducing our emissions? Should we go all in on canola? Should we really emphasize forestry waste? Should we really go in on landfills?

I'm just wondering if anybody here can shed some light on that.

[John Moffet]

Maybe I can jump in.

There is a fairly standard life-cycle analysis tool that's been in use in Canada for quite a few years. Environment and Climate Change Canada is in the process of developing a new tool, and we're working with provinces and the private sector and academia. Our goal is to develop a tool that can become a standard tool for assessing the life-cycle carbon intensity of different fuels. We have sort of a prototype now, and we have the goal of rolling out that tool by the end of this calendar year. That's where we are in terms of the analytical approach.

Your question is a little more general. Well, it could be a little more specific.

What's the best fuel? I don't think any of us is going to give you a direct answer on that. Instead, I think what you're hopefully hearing from us is that the government's overall approach to clean fuels is one that is focused on creating incentives for the lowest carbon intensity possible, but not picking winners. We'll want to create market incentives that both drive and support research and development and production of lowest possible carbon-intensity fuels across their life cycle, recognizing that we are going to undergo a transition over the next few decades. We're not sort of putting a gold star on one or another but instead emphasizing that the lower, the better.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

We're now moving into the second round for five minutes of questions, starting with Mr. Lloyd.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thanks, Mr. Chair.

I couldn't agree more with what Mr. Moffet said there at the end. We shouldn't be choosing winners or losers.

The future of my community and communities in places like Alberta, northern B.C. and Saskatchewan will lie with hydrogen, but also with low-carbon fossil fuels. Something that sort of disturbs me, listening to all the witnesses, is that there hasn't been one mention of low-carbon fossil fuels. We're talking about biogas, hydrogen and renewable fuels, but where's the talk about our low-carbon fossil fuels? Why have those been excluded from the formula here?

[John Moffet]

I think the simple reason is that we kind of riffed off the notional subject matter, which is focused on clean fuels. The government's approach to climate change absolutely envisages a future for oil and gas and absolutely has a number of measures in place to work with provinces, academia and industry to—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Do you think fossil fuels can never or cannot be clean fuels?

[John Moffet]

The challenge will be to achieve life-cycle net-zero emissions, and so we—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

We have great examples of oil companies in Saskatchewan. Whitecap Resources is actually a net-negative carbon producer because they sequester more carbon in their wells than the oil that they produce would burn.

Why aren't we championing our net-zero or net-negative producers, like those companies?

[John Moffet]

There are a couple of issues there. One is the measures we have put in place. The other is the overall government rhetoric.

I won't get into political rhetoric. I—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Does the $1.5-billion clean fuels fund include low-carbon fossil fuels? Is there any plan to include that in the $1.5-billion clean fuel fund?

[John Moffet]

I'm going to let Ms. Johnson answer that, but the CCUS incentive is—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

That's important, yes.

[John Moffet]

The net zero accelerator has a major focus on enabling decarbonization projects by oil and gas producers, and the blended finance measure is intended to be available to oil and gas producers.

We are spending a lot of time working with provinces on a bilateral basis, including the provinces of Alberta and Saskatchewan, trying to develop joint measures to support—

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thanks, Mr. Moffet.

Maybe we'll move on to Ms. Johnson now to finish answering the question, as you suggested.

[Mollie Johnson]

Thanks very much.

As envisioned, the low-carbon fuels fund is not talking about low-carbon oil and gas, but there are other measures, as Mr. Moffet was suggesting, such as carbon capture and storage. There are also measures like the emissions reduction fund and others that are focused on reducing the carbon intensity of the oil and gas sector.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

We just said we don't want to choose winners and losers. If we can have oil and gas like Whitecap Resources.... Sturgeon Refinery in my riding has already sequestered over a megatonne of carbon dioxide in less than a year of operation.

Why is the government choosing winners and losers here by excluding low-carbon oil and gas from the $1.5-billion clean fuels fund?

[Mollie Johnson]

It comes down to growing a source of fuels that is low carbon intensity. I think that is the definition as we've been moving forward with the clean fuels fund.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

As we've seen in cases like Whitecap Resources with the production of oil and gas and the Sturgeon Refinery in the refinery aspect, these companies are actually net-negative producing. They're sequestering more carbon than they're emitting, so they're net-negative producers.

Shouldn't that be the Holy Grail here for government funding on this clean fuels fund?

[Mollie Johnson]

There are other tools, like the net zero accelerator, which has $8 billion in it. There are other tools. The clean fuels fund is not the only tool in the kit that is going to support the transition and support emissions reductions. I'm not sure that it is just about one tool in the kit.