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.
Chief Executive Officer, Enerkem
No. The authorities and everyone have been very co-operative. If this were our biggest concern, I think it would be great.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Okay, so the timelines have been pretty good for getting things going. Thank you for that.
In the brief that you sent to the committee, one of your recommendations state that renewable electricity is zero-carbon intensive. I'm just wondering if you could explain what is meant by “zero-carbon intensive”.
Chief Executive Officer, Enerkem
In Quebec, for example, it's produced from hydroelectricity and the CO2 emissions from that production are deemed to be zero or close to zero by some regulators. What we are saying essentially is that if this could be applied to every type of renewable electricity produced in Canada, and if we could use, instead of a direct connect, a book and claim system to get the benefits of that low-carbon intensity, accordingly, it could enhance the ability to produce or increase the install base of biofuel facilities in Canada.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Does that mean that we will not necessarily be taking the full or entire life-cycle footprint of what it takes to produce and get a facility online? Again, we're looking at the entire picture here for emissions. Does it exclude different parts of that, or is it focused on the entire life cycle?
Chief Executive Officer, Enerkem
Yes, it's the entire life cycle, but let's say, if I'm in Alberta and the grid has a higher carbon intensity, if one of my partners, for example, Suncor, has a windmill, I should be able to buy my electricity directly from that windmill. Then my real footprint would be very low as opposed to using a higher carbon intensity electricity.
That's what we're saying in order to facilitate the implementation of projects in Canada.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Boies and Mr. Patzer.
We'll go over to Mr. Weiler, the birthday boy.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Mr. Chair.
This is a fascinating discussion today, and I'm looking forward to getting involved.
The first question I have is for Mr. Hutchens.
I want to pick up on something that my colleague from the NDP was touching on earlier, and that's the use of renewable fuels and particularly hydrogen through the existing networks for home heating.
If we're going to have to potentially build out more infrastructure to transport clean fuels for this purpose, I'm curious why we would invest in blending in some of these other activities when there may be other options out there, such as looking to increasingly electrify heating and stoves through our existing electrical grid.
President and Chief Executive Officer, Fortis Inc.
Mr. Weiler, it just comes down to the cost impact and whether or not you're looking at using and utilizing existing infrastructure that we currently have that can move clean molecules versus building new additional infrastructure. That's the difference.
I think Mr. Patzer brought up the impact assessment in terms of building the new pipes. That's what makes our existing system so valuable and important right now; it's to utilize that infrastructure. Whether it's the existing pipes or the right-of-ways, it's really making sure that we're not ignoring the extreme value, the huge value, that our existing infrastructure has and the value that investors put in the ground and our customers have paid for. To build something new without figuring out how much you can use of the existing infrastructure would be a little bit short-sighted, I think.
Now, whether or not we look 50 years out and we see something that might change in year 10, 20, 30 or 40, then yes, we can shift, but we don't know enough now to shift away and say that we shouldn't be investing and continuing to make sure that these systems are resilient.
If I had more time, I'd tell you all about Texas. It's a great lesson learned about how not to do it.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you for that, Mr. Hutchens.
Mr. Verlez, it's really exciting that you have the first large-scale green hydrogen plant in Canada with significant expansion potential. I've spoken to a lot of companies in B.C. that are interested in moving into this space and building offshore wind that can be used to produce green hydrogen. They see demand for this in places like Japan. We also know that Germany is very interested in purchasing green hydrogen from Canada.
How were you able to accomplish this and be a first mover in this space in Canada?
Senior Vice-President, Business Development and Strategy, Evolugen
I have maybe just one clarification to make to make here, in that it's a project right now. The electrolyzer is not built yet. We're moving forward with that project with our partner Gazifère.
The difference here, and I think one of the key elements, is that we're using our own electricity generation directly on site. We're completely isolated from the grid and the Hydro-Québec network. That allows us to be more competitive in terms of cost. We will be delivering that hydrogen to our client who's basically sitting a few kilometres away from us, so in terms of transportation, there's a lot of saving there. Compressing hydrogen, putting that on a ship, sending it to Europe—that's very high-cost transportation. This set-up is optimal, because we're producing on site with our own power and the offtake is very nearby.
I hope that answers your question.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
It absolutely does. It kind of leads to my next question.
Ms. Hansen, obviously Enbridge has a huge network of natural gas linear infrastructure across North America. Given that Enbridge does have a portfolio of renewable energy infrastructure as well, is Enbridge looking at developing pipeline infrastructure for transporting hydrogen? If so, what would be the cost of this relative to building out natural gas pipeline infrastructure?
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
Yes, we have had an opportunity to talk to some developers. There obviously are hydrogen pipelines in existence in North America. It's part of the hydro petrochemical chain already. The cost of a hydrogen pipeline is similar to that of any pipeline construction. There are a few considerations.
Thank you.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you.
My next question is for Mr. Boies.
Liberal
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Okay. I'll cede the rest of my time. Thanks.
Liberal
Bloc
Mario Simard Bloc Jonquière, QC
Thank you, Mr. Chair.
Mr. Boies, you're going to think I am picking on you, but I'm not.
In your presentation, you talked about the need to create a market in the bioenergy sector.
In politics, we often operate on key ideas. If you had to implement some measures to create such a market, what would you need to do in the short term?
Chief Executive Officer, Enerkem
That's an excellent question.
In the short term, first, we should have a system of clear targets for the inclusion of biofuels in the transportation sector, whether in the air, on land, or at sea. Second, that system would have to be based on a common benchmark, which is carbon intensity, and then link to that the cost and the benefits people will get from using the fuel. So those would be the two essential elements to create what we call a low-carbon fuel standard.
Bloc
Mario Simard Bloc Jonquière, QC
If I think in terms that are often used in the environmental field, there are penalties and rewards in a way. Earlier, you mentioned the carrot.
Currently, I believe we're a little behind in Canada on the standards going in that direction.
Chief Executive Officer, Enerkem
To be polite, that's an understatement.
British Columbia is leading the way with its low-carbon fuel standard modelled after California and Oregon, among others. It's a great start. It's the most forward-thinking market in the country right now.
As for our goals, if we compare them to the ambitious goals of some U.S. states, some European countries or even the European Union, we are years behind.
So it will be hard to catch up. Earlier, Ms. Trudeau, I believe, mentioned that we can't decide to build our capacity when we wake up one morning. These projects are developed over three, four or five years and require hundreds of millions of dollars.
So if we want to get there by 2030, 2040 or 2050, we can't wait until then to start thinking about it.
Bloc
Mario Simard Bloc Jonquière, QC
You also talked about investments in innovative technologies. In terms of your biofuel project in Varennes, did you get support from any federal government program?
Chief Executive Officer, Enerkem
Yes, we received some partial assistance with a $70 million grant through a federal-provincial green infrastructure program.
Liberal