Natural Resources Committee on April 30th, 2021

[The Chair, Liberal, James Maloney]

I'd like to call the meeting to order.

Welcome to meeting number 23 of the Standing Committee on Natural Resources, and the second meeting in our current study.

To our witnesses, I just want to say thank you for coming and welcome. Some of you may have been here before, but for those of you who haven't, it's obvious that we're doing this in a virtual format, which brings with it certain challenges. We need to be patient when others are speaking and not try to speak over others, and make sure that other people have finished talking before you speak—all of the things our mothers taught us when we were young children, basically.

If you need translation, there's a button at the bottom of your screen that should provide that for you. You're welcome to and encouraged to speak in either or both official languages. You will almost certainly be asked questions in both. If you're having any challenges, please feel free to raise your hand or raise your voice.

My job, in part, is to keep track of time, which means that from time to time I may have to interrupt and stop people for going over the time limits. We do have time limits for introductory remarks and questions.

Having said that, each witness group will be given up to five minutes to make opening remarks and then, after all of the witnesses have finished, we open the floor to questions. All of our witnesses are here, with the exception of Enbridge, which hopefully will be joining us in due course.

Welcome everybody. We have Énergir, Enerkem, Evolugen and Fortis Inc. I think it probably makes sense if we just start in the order that you appear on the agenda, in which case, Ms. Trudeau, you will be starting us off for five minutes.

[Stéphanie Trudeau, Executive Vice-President, Quebec, Énergir]

Good afternoon, Mr. Chair and members of the committee.

Thank you for inviting me.

My name is Stéphanie Trudeau, and I am the executive vice-president for Quebec at Énergir.

To begin, I'll say a few words about Énergir.

Énergir is Quebec's largest natural gas distributor. I am proud to say it now has a significant presence in the energy sector. In the early 2000s, nearly all of Énergir's operations revolved around natural gas distribution, but over the years, the company has diversified its energy portfolio. For example, in Quebec, Énergir owns one of the largest collections of wind farms in Canada. In the United States, through our subsidiaries, we produce and distribute hydroelectricity, wind power and solar energy. In both jurisdictions, Énergir now distributes renewable natural gas, and today, the production and distribution of renewable energy accounts for approximately 50% of Énergir's assets, totalling more than $8 billion.

Our business model for gas distribution has evolved and will continue to evolve. Over the past 18 months, we have developed a corporate vision for 2030 and 2050, which should help us become a provider of varied and increasingly renewable energy solutions. We want to stay relevant for our customers and society, which is on a clear path to accelerated decarbonization. We want to be part of the solution.

Further to this strategic shift, we have adopted four overarching policies, all aimed at decarbonizing our natural gas network more and more and growing our presence in areas where we can add value. I will list all four policies quickly and revisit two of them in greater detail.

The first policy is, of course, to step up our energy efficiency initiatives. That is a must, and Énergir has been a pioneer in the area for the past two decades.

The second policy is to accelerate the injection of renewable natural gas, or RNG, into our network. We have already been active on that front for more than 10 years. RNG is a key component of decarbonizing the energy we distribute. I will come back to this point.

The third policy is to significantly leverage the complementarity of the gas and electric networks. The idea is to take full advantage of Énergir's and Hydro-Québec's existing energy infrastructure to decarbonize the networks at the lowest cost to society.

The fourth policy is to diversify our operations through sustainable growth vectors. For example, we are looking at injecting hydrogen into the network to further reduce the carbon content. I will come back to this point as well.

Under this plan, we aim to reduce the greenhouse gas emissions, or GHGs, of our builder customer base by 30% by as early as 2030. Next, we are aiming for carbon-neutrality in our energy distribution by 2050. Énergir is working extremely hard to encourage the development of the RNG sector in Quebec. By 2030, we are aiming to inject at least 10% of RNG into our network, and we are on the right track. So far, we have about 20 projects in the production, construction or development stage.

You may be wondering, and perhaps rightly so, whether these efforts will be met by demand. I can tell you that, right now, we are not doing any active marketing and demand is outstripping supply. Customers recognize not only the environmental benefits of RNG, but also its competitive pricing as compared with other types of renewable energy. RNG is an extremely effective way to decarbonize Canada's gas networks. Énergir also believes in the importance of exploring other energy sources, such as hydrogen. Gas infrastructure can actually be used to effectively store and distribute hydrogen, and we are currently examining how the network could be used for that purpose.

I would like to conclude with a few suggestions to support the development of renewable natural gas and hydrogen.

First, support for production is key. That support could take the form of regulatory incentives, for instance, through minimum content requirements, similar to what the Quebec government has done for RNG. Other options are to provide support for R and D, and pilot projects that help foster a Canadian ecosystem. Support for demand is another important avenue. Governments can play a central role in changing consumer habits, especially by adopting procurement policies and leading by example. I would go so far as to say they have a duty in that regard.

The Department of National Defence is making a significant contribution through its Quebec-based facilities, which rely heavily on RNG. Other federal departments and agencies should follow suit and make the switch; not only is RNG competitive and renewable, but it also requires no new equipment.

Énergir has no doubt that renewable, low-carbon fuels hold tremendous potential for Canada, because they can significantly enhance the country's environmental performance at a competitive price. As an energy distributor, we have the expertise and infrastructure to advance that effort. We believe that diversified energy sources are the key to a strong green economy.

Thank you.

I would be pleased to answer your questions.

[The Chair, Liberal, James Maloney]

That was perfect. You were right on time. Thank you.

Next up, from Enerkem, is Mr. Boies.

[Dominique Boies, Chief Executive Officer, Enerkem]

Thank you, Mr. Chair.

Good afternoon.

My name is Dominique Boies, and I am the chief executive officer of Enerkem. Thank you for inviting me to meet with the committee today. I am pleased to contribute to your study on the future of the low-carbon and renewable fuels industry.

To start, I'd like to give you some background on Enerkem. Established in 2000, Enerkem has developed and commercialized a one-of-a-kind disruptive technology to produce low-carbon advanced biofuels and renewable chemicals from non-recyclable waste materials.

Our technology is an integral link in a true circular economy, contributing to the diversification of the energy portfolio and the production of greener mainstream products, while providing a smart and sustainable alternative to landfill and incineration. To achieve this level of technology maturity, Enerkem raised more than $850 million in capital, largely through private and foreign investment.

On December 8, with a group of strategic partners including Shell, Proman, Suncor and Hydro-Québec, and with the support of the governments of Canada and Quebec, Enerkem announced plans to build a biofuels plant in Varennes at a cost of $875 million. Recyclage Carbone Varennes will produce biofuels and renewable chemicals from non-recyclable waste materials and forest biomass. The plant will actually convert more than 200,000 tonnes of waste per year into more than 125 million litres of biofuel annually.

Now, I would like to tell you a bit about the context in Canada and around the world. I don't want to throw too many statistics at you, but according to the World Resources Institute, in 2018, Canada was the 10th largest GHG-emitting country or region. Canada's GHG emissions continue to rise despite current measures.

Last week, Prime Minister Trudeau committed to reducing GHG emissions by 40% to 45%, a much more ambitious target than the one in the Paris agreement. Canada also committed to a carbon-neutral economy by 2050.

Canada has made strong commitments to reduce GHG emissions, but achieving those targets first requires taking stock of the situation and creating the right conditions.

Where do things stand? In terms of transportation, electrification support and initiatives are commendable, important and necessary, but will not be enough to significantly reduce Canada's GHG emissions.

Canadian gross sales of gasoline totalled 44.8 billion litres in 2019, with no significant decrease in recent years. Vehicle registrations in 2019 totalled 36 million. Today, Canada's total vehicle fleet includes fewer than 200,000 electric vehicles, or 0.5%.

Now that the targets are set and the state of play is known, it is time to take action.

Here are some important considerations. When it comes international markets and the appetite for low-carbon biofuels, the Canadian marketplace is less attractive given the lack of both minimum content regulations for biofuels derived from waste materials and a low-carbon fuel standard, or LCFS. For instance, the United States has the renewable fuel standard, California and Oregon have the LCFS, the European Union has the RED II to promote the use of renewable energies, and the United Kingdom has the renewable transport fuel obligation. All of those jurisdictions have already put ambitious standards in place to force fuel distributors to increase their supply of low-carbon biofuels made from waste.

These types of standards create the right market conditions for producers. For instance, a litre of methanol or ethanol produced at our Edmonton facility now goes for double in California and nearly four times as much in the United Kingdom, including transportation costs. Without a competitive regulatory environment in Canada, keeping low-carbon biofuels in Canada will be a challenge.

Unlike incineration, which burns waste and uses energy, Enerkem's gasification platform recycles carbon and hydrogen from waste into biofuels and renewable chemicals.

We offer a true green alternative to landfill. For instance, our new plant in Varennes will help reduce GHGs in Quebec by 170,000 tonnes of carbon dioxide equivalent annually. Imagine what 10, 15 or 20 plants could do.

In an effort to be constructive, I would like to share some recommendations.

If Canada is going to achieve its ambitious GHG reduction targets, it must create favourable market conditions to support the application of innovative solutions. A carrot and stick approach is necessary. When it comes to the carrot, Canada does not have to reinvent the wheel.

Many tools and programs have been used successfully in other industries such as green electricity, oil and gas, and mining. For example, governments have reduced the risks of early wind farm development by offering long-term power purchase agreements. It is necessary to create a competitive Canadian market to attract foreign private investment and support bioenergy projects.

[The Chair, Liberal, James Maloney]

I'm going to have to ask you to wrap up very quickly, Mr. Boies.

[Dominique Boies]

All right.

Canada should adopt regulations that mandate GHG reduction measures in the transportation sector, establish a clear pricing system and set out penalties for non-compliance.

In conclusion, I want to repeat what I said earlier: Canada can and must adopt ambitious GHG reduction measures and targets. Above all, however, it needs to create conditions conducive to investment in the innovative technologies we have here, in the country.

Thank you.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Boies.

Next up, from Evolugen, we have Mr. Frédéric Verlez.

[Frédéric Verlez, Senior Vice-President, Business Development and Strategy, Evolugen]

Good afternoon.

Thank you to the members of the Standing Committee on Natural Resources for inviting me to take part in its study on the low-carbon and renewable fuels industry.

I'm delighted to appear before you today to discuss the important role low-carbon and renewable fuels can play in Canada's decarbonization targets and the creation of economic opportunities.

First, allow me to introduce myself. My name is Frédéric Verlez, and I am the senior vice-president of business development and strategy at Evolugen. I oversee the business strategies related to Evolugen's assets, the company's growth through acquisitions, and the development of and investment in new technologies.

Evolugen is the Canadian operating business of Brookfield Renewable, which established its first publicly traded entity in 1999, in Gatineau, Quebec, with three hydroelectric stations located along the Lièvre River, in southwestern Quebec. Those assets have been operational for more than a century. Through its companies and subsidiaries, Brookfield Renewable now has a portfolio of 20,000 megawatts in installed capacity and approximately $50 billion in assets under management, making it one of the world's leading renewable energy platforms.

In Canada, we own and operate 61 renewable power facilities—producing hydroelectricity, wind power and solar energy—for a total of 1,900 megawatts in installed capacity. Our facilities are located in Ontario, Quebec and British Columbia.

While we have traditionally focused on renewable power, we recognize that decarbonization will require diverse and sustainable solutions focused on accelerating the transition to a low-carbon energy future. We're currently working to expand our role into broader decarbonization solutions to help our partners achieve their carbon reduction goals.

One such example is low-carbon hydrogen. Recently, we announced our collaboration with Gazifère, an Enbridge company, to develop one of Canada’s largest renewable hydrogen injection projects, to be located in Quebec. As part of this joint effort, we shared plans to build and operate an approximately 20-megawatt water electrolysis hydrogen production plant in the Outaouais region. This plant will use renewable electricity from our Masson facility to produce renewable hydrogen.

This will be the first large-scale project in Quebec and Canada to produce renewable hydrogen for injection into a natural gas distribution network, a model with significant expansion potential. In Canada, there is a high potential market depth for low-carbon hydrogen given broad use across hard-to-abate and carbon-intensive industries.

The facility will generate considerable environmental and economic benefits regionally, provincially and nationally. Specifically, the project will avoid approximately 15,000 metric tons of greenhouse gas emissions per year, in addition to generating significant local economic benefits, including new jobs and additional property tax revenue. Over time, our focus will be on expanding to additional end uses and replicating this model at other facilities, including new renewable power facilities dedicated to hydrogen production.

We believe that our hydrogen efforts are in line with the policy objectives of the Canadian federal government and those of many provinces across Canada, which have been expressed through carbon reduction targets, hydrogen strategies and clean fuel requirements. In the current environment, hydrogen can also play an important role in our post-pandemic economic recovery, stimulating investment and job creation.

That said, seizing Canada’s hydrogen opportunity is not without challenges, and the involvement of governments is necessary to maximize this opportunity. Specifically, we see a role for government in creating clear, straightforward and responsive policy and regulatory frameworks for hydrogen production, distribution and end use, with an initial focus on near-term applications; helping to reduce production cost through direct investments and creating value streams for low-carbon fuels; helping to overcome technological and cost barriers associated with transporting hydrogen, such as through the creation of shared-use infrastructure; supporting end-use uptake; and, finally, facilitating access to financing. We strongly believe that by working together with governments and all industry players, Canada can become a leader in the production and use of low-carbon hydrogen and biofuels.

Thanks again to the committee for allowing me to speak today. I look forward to the opportunity to answer your questions.

[The Chair, Liberal, James Maloney]

Thank you very much, Mr. Verlez.

Next up, from Fortis Inc., we have Mr. Hutchens.

[David Hutchens, President and Chief Executive Officer, Fortis Inc.]

Good afternoon, Mr. Chair, and members of the committee. Thank you for the invitation to speak to you today.

I would like to begin by acknowledging Fortis's respect for indigenous peoples in this place we call Canada, and on whose traditional territories we all live, work and play. Fortis has long supported engagement with indigenous communities and building strong relationships based on respectful dialogue that creates mutually beneficial opportunities.

At Fortis, our core responsibility is to deliver safe, reliable and affordable energy in an environmentally responsible manner that respects the communities we serve. These values are reflected among the five companies that we operate across Canada—in British Columbia, Alberta, Ontario, Prince Edward Island, and Newfoundland and Labrador—as well as those we operate outside Canada. Across North America and the Caribbean we deliver energy through 10 utility operations to more than 3.3 million customers.

As an organization operating both electric and gas utilities across the continent, we have unique expertise and perspective to inform energy and climate policy.

We believe that achieving the national targets identified by the Government of Canada is a shared responsibility. We recognize the important role that we play in supporting efforts to combat climate change, investing in the transformation of Canada's energy infrastructure, and supporting the advancement of indigenous peoples.

Our Waytaynikaneyap Power partnership with first nations in Ontario, and our corporate-wide target to reduce carbon emissions are two examples of our commitment in action. We are targeting to reduce scope 1 emissions by 75% by 2035, from a 2019 base year. That target is now driving our investment plans, with more than 70% of our $4.3-billion 2020 capital plan dedicated to asset resiliency, modernization and cleaner energy initiatives.

A further example is in B.C., which remains a leading jurisdiction in North American climate policy. Our local utility, FortisBC, provides both electricity and natural gas to over 1.2 million homes and businesses across the province. Two years ago, FortisBC launched their plan to reduce emissions, called the clean growth pathway to 2050. This plan outlines numerous actions that will contribute substantial reductions in greenhouse gas emissions by harnessing the decarbonization potential of their gas and electric delivery systems.

Included in these actions is a stated goal to aggressively increase the supply of renewable natural gas in their system and advance hydrogen development. By 2050, FortisBC envisions a future where the majority of gas within their system will come from low-carbon and renewable sources. Many of these actions are reflected in the provincial climate strategy, CleanBC, including a target of 15% renewable content in the gas stream by 2030.

With this as background, the following recommendations merit consideration of the committee as it deliberates on these matters.

The first is to recognize the massive potential of the gas system to deliver emissions reductions. We recommend continued support for the growth of Canada's renewable gas sector with a policy that preserves a role for natural gas in the building space. We should develop a made-in-Canada pathway that leverages our existing gas and electricity infrastructure to achieve net zero and make Canada a global leader in renewable gases.

As I mentioned, B.C. has established a 15% renewable gas mandate for 2030 as part of their CleanBC climate strategy. FortisBC has been delivering renewable gas to their customers for more than a decade now. This single action within CleanBC will deliver more than three-quarters of the emissions reductions in the building space outlined in B.C.'s climate plan.

FortisBC is well on track to meet and exceed this target through near-term investments in biomethane and developing medium- and long-term pathways to develop B.C.'s hydrogen resources. This is why policy must preserve a role for gaseous energy delivery so that the benefits of these low-carbon fuels, using the strong infrastructure that exists, can be realized through their delivery to customers.

FortisBC commissioned Guidehouse, a respected global consultancy, to enable our utility to engage with and support an actionable decarbonization strategy for B.C. FortisBC undertook this project because they knew we needed specific made-in-B.C. pathways that reflect the unique constraints and opportunities of a winter peaking system and to decarbonize as quickly and cost-effectively as possible.

The results show that a diversified pathway can achieve our long-term emissions reductions targets with lower costs and lower risks to society. A diversified pathway that uses both our existing gas and our electric infrastructure is shown to be less economically disruptive, while also maintaining energy affordability and resiliency for our customers. In the same way that the electric grid allows for increasingly low-carbon electrons to be transported, the natural gas grid should be viewed as a way to enable increasingly low-carbon molecules to be transported.

Second is to provide clear policy signals on the role of the gas system in the net-zero environment. We recommend policy development that provides clear support for investment in long-lived energy infrastructure in Canada and for the role of innovation.

Climate policy, energy policy and on-the-ground operations are under constant transformation, while energy infrastructure has long planning lead times, long service lives and significant cost. In order to meet our needs and climate imperatives in 10, 20 and 30 years from now, we need clear policy signals on a complex landscape, including renewables, transmission and natural gas. That's required today. Ambiguity forestalls innovation, investment and actionable, achievable business changes. The energy transition is occurring—

[The Chair, Liberal, James Maloney]

Mr. Hutchens, I'm going to have to ask you to wrap up, please.

[David Hutchens]

In conclusion, Fortis is highly supportive of this committee's work to better understand the role of the low-carbon and renewable fuel sector in this transition. We have the unique viewpoint of a company with a continental footprint that has been working on this since its inception. We want to see Canada succeed, becoming a greater destination for global energy investment and a leader in clean energy development while protecting the environment, advancing reconciliation with indigenous peoples and creating economic opportunities for all Canadians.

Thank you.

[The Chair, Liberal, James Maloney]

Thanks very much, Mr. Hutchens.

Last up, we have Enbridge. Thank you, Mr. Trahan and Ms. Hansen, for joining us. I'm glad you got your technical challenges behind you.

Enbridge will have up to five minutes for presentation and then we're going to turn it over to questions.

[Cynthia Hansen, Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.]

Thank you, Chair.

Mr. Chair and members of the committee, I want to thank all of you for undertaking this study of the low-carbon and renewable fuels industry and how we might work together to advance these industries in Canada to create new jobs and maintain energy security, reliability and affordability, all while addressing climate change, including our country's recently announced goal of reducing greenhouse gas emissions to 40 to 45% below 2005 levels by 2030.

In our view, low-carbon and renewable fuels will be a significant part of Canada's low-emissions future.

My name is Cynthia Hansen and I'm the EVP and president of gas distribution and storage at Enbridge. I'm fortunate to lead the Ontario-based Enbridge Gas Inc., which follows the amalgamation of Enbridge Gas Distribution and Union Gas, as well as Gazifère, which serves the Gatineau region of Quebec.

With me is Jean-Benoit Trahan, the director of Gazifère.

Enbridge operates North America's largest natural gas utility by volume, and the third largest by customer count. Enbridge Gas and its affiliates deliver safe, reliable service to about 15 million people in Ontario and Quebec through 3.8 million residential, commercial, institutional and industrial meter connections.

We've been delivering energy for over 170 years, so our perspective on the promise of Canada's low-emissions future is informed by decades of experience. My comments today will focus on hydrogen and renewable natural gas, or RNG.

Enbridge was an early investor in both hydrogen and RNG, and is very experienced in RNG. On the hydrogen front, our journey started in 2011 when we partnered with Cummins Inc., formerly Hydrogenics Corporation, to establish a collaborative joint venture to create and advance the renewable hydrogen market in Ontario and, more broadly, North America. The culmination of this joint venture was the construction of the first and largest power-to-gas renewable hydrogen plant in North America, located in Markham Ontario.

The plant was a platform for Cummins to showcase its world-class, leading proton exchange membrane electrolyzer and fuel cell stack technology. For us, it's an important expansion of our renewable energy portfolio, establishing and growing the market.

This past November, we announced the next phase of our hydrogen journey in Markham—a $5.2 million project, supported by Sustainable Development Technology Canada, to blend renewable hydrogen gas into our existing gas network. This project will be the first of its kind in North America, and will be in service this fall. This project will unlock additional value in our larger-scale hydrogen blending activities in other parts of our distribution system.

In Ontario, we have a number of exciting hydrogen opportunities under development. We're looking at leveraging our four strategically located compressed natural gas stations along Highway 401 to create a green hydrogen corridor.

We are approached regularly about new hydrogen projects. We're looking at bus refuelling facilities, new power-to-gas opportunities, and several mobile and stationary power generation applications. We see opportunities in other parts of the country as well, including with B.C.'s gas transmission and distribution system. Further, the opportunity to decarbonize Alberta's oil sands through a carbon capture utilization and storage solution that is fully integrated with ambitious plans to launch a local blue hydrogen sector is very exciting.

In Quebec, as my colleague Jean-Benoit can explain, Gazifère aims to be North America's first natural gas utility to be 100% green by 2050. Hydrogen will play a large part in that, which is why, in February, we announced, along with our partner Evolugen, a new $90 million, 425,000 gigajoule green hydrogen injection project. We agree with Canada's Minister of Natural Resources, Minister O'Regan, that hydrogen's time has come. However, steps will be needed to take this opportunity.

Finally, on renewable natural gas, we're involved in three significant RNG projects in London, Niagara and Toronto, Ontario. We're a partner in a biorefinery project in Lacombe, Alberta, and we've recently celebrated the launch of Ontario's first carbon-negative RNG bus in Hamilton. We've also launched an important voluntary RNG program for our customers in Ontario to empower households to lower carbon emissions. Just this Wednesday, we announced a major new partnership to execute projects in Ontario that convert organic waste into energy and utilize current Enbridge infrastructure to heat homes, power business and fuel fleets, all while reducing carbon emissions.

We've done a lot in the hydrogen and RNG space today, but much more could be done with government support, including strategic investments and the proper regulatory and tax environment.

I'm very much looking forward to the conversation over the next hour and a half. Thank you again for your time and leadership.

[The Chair, Liberal, James Maloney]

Thank you very much, Ms. Hansen.

We'll start off our first round of questions, for six minutes each, starting with Mr. Lloyd.

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

Thank you, Mr. Chair, and thank you to the witnesses. My first question is for Fortis.

I calculate the price today for ATCO gas, the Alberta natural gas blend, as about $2.50 per gigajoule of energy. Using a 100% blend of renewable natural gas, for a business that burns over 3,500 gigajoules per month, you're looking at an increase to their heating bill of over 2,000% right now. That goes across the board. Residents would pay an increase of over 2,000% if they were to have 100% renewable natural gas.

How do you think businesses and residents are going to be able to afford this, and how many years do you think it will take for renewable natural gas infrastructure get gas down to a reasonable price for Canadian businesses and consumers?

[David Hutchens]

Thank you, Mr. Lloyd. That's a great question and one that we talk about quite often.

You have to make sure, in the transition to cleaner energy resources, that you are absolutely focused on customer affordability, and when you set climate policy and realize that you have to reduce the amount of carbon that you emit as a society, there are only so many options that you have. What we typically talk about is the balance of those options between things like renewable natural gas and hydrogen from a fuel perspective that you can transport in a gaseous phase, and electricity. What you have to compare is not necessarily the cost between, say, renewable natural gas and natural gas—methane in B.C.—coming right out of the ground, but to compare that to the other opportunities, which are going to be things like carbon capture utilization and storage or electricity.

It's really shifting the paradigm of what you compare those costs to, and yes, you're absolutely right, when you look at the cost that we see for renewable natural gas now, it is in that $20 GJ number range that you brought up. If you look at the cost of gas coming right out of the ground, it is in that same range that you talked about, which is, depending on the market conditions, anywhere between let's say $2 and $5 a GJ.

That's the picture that we have to see clearly so that we can make those trade-offs and make them cost-effective for our customers. At the end of the day, what you're looking at is comparing renewable natural gas as a heat source delivered to our customers, burner-tip costs, to the same thing that they would need to get electricity from, say, renewable or hydro—whatever that clean energy is—transmitted to those customers for that same purpose. That's how the economics have to be compared.

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

One of the comparative advantages that Canada has over its economic competitors has been our low-cost electricity, whether it's hydroelectricity in B.C. or cheap natural gas in western Canada or hydroelectricity in Quebec. How do you think businesses and families are going to be able to survive if they're facing a 2000% increase in their home heating bill or their business heating bill? Even if it's just a quarter of that number, how are they going to survive and compete at a 500% increase in their heating bills?

[David Hutchens]

Yes, I would recognize, obviously, the great portfolio that Canada has from an electricity perspective. It is very clean to begin with, but when you look at the amount of energy and the amount of capacity that would need to be added to, say, completely electrify the province of B.C., that would basically be, in terms of projects, about eight additional site Cs that would be needed to provide the capability to deliver that same amount of energy that the electric system currently provides and to replace the natural gas system. But you have to look at it too.... I'll give you a burner-tip/plug comparison.

When you look at that $20 per GJ number for renewable natural gas, that's equivalent to about eight cents a kilowatt-hour, which is still competitive with getting electricity from a province and providing that same heat source to our customers. That's the difference. Yes, there would be an increase in gas bills, and of course, we're talking about leaping to that 100% renewable natural gas—

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

Even at 50%, even at 25%, the percentage increase remains static, with very little change.

[David Hutchens]

You're right. The percentage increases, the bill increases, but you also have to remember that the portion of the commodity on our bill is only about 20% to 25%. So the rest—

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

Then you get all of those fun delivery charges that you companies get to charge.

That's good. I appreciate that.

I'm wondering, what are the life-cycle emissions of biofuels as opposed to natural gas? I don't think we could say that biofuels are necessarily a net-zero or a net-negative fuel source—albeit may be lower carbon. What is the life-cycle impact of carbon emissions with methane and such?

[David Hutchens]

Yes, Mr. Lloyd, that's another good question. It gets about as close to net zero as you can. That's going to be something that has to be absolutely figured out on a going forward basis—

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

Are you counting the diesel that farmers burn to grow the crops? Is that included in there, and the transportation?

[David Hutchens]

Yes, it's really just the difference between that CO2 being released naturally from the decomposition process at that farm or at a landfill or being flared, whatever it might be, and capturing that. So it is truly, when you look at it on an apples-to-apples basis, a net zero from a carbon cycle perspective, because anything additional that used to process that gas has to be worked into that equation as well.