Evidence of meeting #23 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.
A recording is available from Parliament.
Conservative
Greg McLean Conservative Calgary Centre, AB
Is it more or less than the price of natural gas, and how much more? I guess that might be a little—
Conservative
Greg McLean Conservative Calgary Centre, AB
I'll leave that question. I appreciate confidentiality, so I apologize for that.
Mr. Chair, those are all the questions I have at this point. Thank you.
Liberal
The Chair Liberal James Maloney
You're almost out of time, anyway, so that worked out perfectly. Thank you.
Mr. Serré, we're going over to you.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you, Mr. Chair.
My thanks to all the witnesses. Their testimony is so fascinating that we could continue the discussion for two or three hours.
Mr. Boies, you talked about the favourable market conditions and the competitiveness of the markets when it comes to bioenergy, hydrogen and innovative technologies.
Do you have any specific recommendations for the government to increase these investments?
Chief Executive Officer, Enerkem
Several existing vehicles could be used. I'm thinking of the tax credits that have been given to the wind industry, to mining, and to oil development, for example. These are well-known mechanisms. You also have flow-through shares and the benefits that come with them, the tax consequences.
So companies have an incentive to invest in those assets. That's what I call the carrot. If there's no regulatory framework to provide an incentive, offer them a carrot using the tax incentives in existing mechanisms.
Liberal
Marc Serré Liberal Nickel Belt, ON
Ms. Trudeau, I'd like to hear your comments on the large-scale production of hydrogen and low-carbon fuels that are being considered in the short to medium term in Canada.
What do you see as the next steps not only in terms of investment, but also in terms of large-scale deployment of the infrastructure needed to use hydrogen in Canada?
Executive Vice-President, Quebec, Énergir
With respect to the regulatory framework, it would be helpful to have mechanisms that allow us to carry out pilot projects, because they need to be done, especially in the United States. Generally, it's not easy to do them.
As Ms. Hansen said, we will be testing sections of networks that are not all made of the same material. For example, we need to be careful about the hydrogen mix used for industrial customers, because they have more sensitive devices. In 2022, we will conduct two closed-loop pilot projects to test our residential and commercial gas lines, so we can determine the maximum amount of hydrogen they can hold. We'll also conduct an industrial project at a central heating plant in downtown Montreal, where we will inject hydrogen into a boiler. We will proceed by trial and error and studies will be done. We may get federal support for research and development.
Other than injecting hydrogen, we could use sections of pipe from a natural gas network. We would considered it as an energy network, and completely dedicate those sections to hydrogen. That's a second possibility. There's also electricity-to-gas conversion, which involves converting CO2 extracted from an industrial site into renewable natural gas. They become completely interchangeable and there's no limit, meaning we can use 100% of it.
So we have several avenues to explore in terms of hydrogen in gas systems. There are billions of new and well maintained underground systems in Canada. We need to look at natural gas systems as energy systems and determine how we will move them towards decarbonization.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you.
Mr. Verlez, do you have any comments on the federal government's role in infrastructure or private sector investment?
Senior Vice-President, Business Development and Strategy, Evolugen
Actually, my comments will be along the same lines as Ms. Trudeau's.
Infrastructure such as pipeline systems could be shared in order to transport hydrogen. That could be very beneficial to us. Right now, it's hard to balance the economics of doing a project like that. We would welcome financial support and assistance in accessing capital.
Liberal
Marc Serré Liberal Nickel Belt, ON
Thank you.
I'll go to Cynthia Hansen from Enbridge. Earlier we heard from our honourable colleague, Mario Simard, that the government's strategy was grey. That's not correct, but on your part, you said in your opening statement that you agree with Mr. O'Regan's leadership and strategy.
I want you to expand a bit on our hydrogen strategy and comment on what we've proposed and what we're planning on doing.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
Thank you.
Liberal
The Chair Liberal James Maloney
Answer very quickly, if you could. I'm sorry for that, but we're running out of time.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
Right.
We're excited about having an opportunity to develop a strategy. Our thoughts are that it will be something that we need to develop over time, as Mr. Hutchens said. We don't want to prevent that development by picking and choosing at this point. We need to support all pathways, with a focus on delivering those low-carbon reductions in the most affordable way.
Liberal
The Chair Liberal James Maloney
Thank you very much.
Thank you, Mr. Serré.
Mr. Patzer, we'll go over to you for five minutes.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Thank you very much. Thank you to everybody for being here today.
I'm going to start off with Enerkem. You'd mentioned to my colleague, Mr. McLean, that you were importing hydrogen. I'm curious about this. Obviously, without revealing any of the numbers, which, as you alluded to earlier, are confidential, is it economically beneficial for you to import hydrogen rather than try to develop and produce hydrogen here right now?
Chief Executive Officer, Enerkem
What I meant is that we're importing directly from a facility that will be on our side. Hydrogen has a high energy content, as some of the witnesses mentioned. By using hydrogen in our feedstock, that is, by adding this into our biofuels production, we basically double the yield. Hence, with one tonne of waste, instead of producing 600 litres of biofuels, with hydrogen we can produce 1,200 litres of biofuels by tonne of waste. That is a huge benefit to the overall process and to the overall decarbonization process. It's like a multiplier for our process.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
But you're not importing from a foreign company; you're bringing it in to use from somewhere else in Canada. Is that correct?
Chief Executive Officer, Enerkem
Exactly. It's green hydrogen produced by hydroelectricity.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Okay, thank you for clarifying that. I was just curious to know if there was a cost benefit from importing from a different country as opposed to using domestic supply. It's good to know it's domestic.
Earlier you alluded to some predictable regulatory environments that are needed here. I'm just curious to know, with our existing regulatory system that's in effect, have there been any issues or hold-ups with the Impact Assessment Act as it is currently constituted?
Chief Executive Officer, Enerkem
I'm sorry; I'm not sure I understand your question.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
For any new developments, as you're trying to get into processing and trying to develop your product, what has been the interaction with the Impact Assessment Act been at this point?
Chief Executive Officer, Enerkem
We're always trying to be very proactive and make sure that people understand what we're doing and the type of product we want to bring to market so that we can appreciate which carbon intensity is going to be attached to that end product and the profitability that we're going to get from this investment. That's how we've been interacting. I'm not sure if I understood your question correctly or if I answered it correctly.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
One of the issues we've been hearing about in our previous studies is the timelines it takes to get new production to be able to get a new facility online. We were hearing that, for critical minerals for mining, it takes upwards of 10 years and beyond because of the Impact Assessment Act. I'm just curious if there have been any issues for biofuels with that.