Natural Resources Committee on May 7th, 2021

[Josh Gustafson]

First I'll say that both the provincial and the federal government have been working with associations such as the Canola Council of Canada, SaskCanola and Canadian Canola Growers Association. One thing that's helping to provide the supply needed for the transition into using canola oil in renewable fuels is the vast amount of research and development going into producing new, better-yielding canola varieties.

Farmers are really good at adapting. We're really working hard. There are tons of new advancements in machinery to help make better farming practices.

As for the debate about taking acres away from other crops, such as wheat and such things, farmers are pretty good stewards of the land. You know that you can't grow canola back to back to back. It just doesn't work. You have to implement a crop rotation, and there's only so much you can do before running into disease problems from trying to push canola.

Farmers are going to steward it. Even now, with canola being at an extremely high price historically, you see a modest increase in canola acres, but it's not through the roof. It's not “abandon ship” on everything else and put in canola, because the bottom line is that there's only so much you can do to push that narrative.

Along with that, wheat prices are looking good, and lentil prices are looking good, so there are other avenues to keep pushing on those other varieties and the other commodities as well.

[The Chair, Liberal, James Maloney]

Thank you.

Thank you, Mr. Cannings.

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

I wanted to say hi to Bob Larocque too. I was going to ask him a question, but....

[The Chair, Liberal, James Maloney]

He's popular for a guy who's not answering a lot of questions.

I'll say hi too, Bob.

We'll go over to Mr. McLean.

[Greg McLean, Conservative, Calgary Centre, AB]

Can we all say hi to Bob?

[The Chair, Liberal, James Maloney]

Yes, we should.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

Witnesses, thanks very much for coming, but I'm going to ask a question here of Mr. Kumar.

I think we're getting somewhere with your research and I hope you can commit to giving us some pretty clear ideal outcomes in written format after this.

Let me ask, just for prodding here.... I know my colleague Mr. Simard talked about a $2-billion bioplant, and my colleague Bob Zimmer talked about getting into the actual cost of this and the life-cycle emissions. If you're talking about building—correct me if I'm wrong—a $2-billion plant that processes 500,000 tonnes per year of biomass, if that's the ideal, can you give us, all in, how big a mass of land you're talking about culling it from?

Also tell us first, please, what you're talking about as far as the CO2 emissions associated with the building of the facility itself are concerned, if that's included in your life-cycle analysis.

[Dr. Amit Kumar]

Thank you for your question.

If you think of, let's say, 500,000 tonnes of biomass annually, it's equivalent to about 1,500 tonnes of biomass per day of processing. Now, in that area it will depend upon what type of feedstock you are using to support the plant. If you are looking at, for example, forest biomass—the whole tree biomass—the yield, if I think about it, is about 84 dry tonnes per hectare. This is from a good site. You can, then, get 84 dry tonnes from a hectare of land.

Now, if I go about the footprint of supporting this per year, using this much biomass, you are looking at about a 50-kilometre radius for getting that biomass. Again depending on the yield, where you are locating it, that is—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you. I'm sorry. I have to be quicker here.

For the $2-billion facility, which is presumably going to be built of wood, steel and concrete, what are the CO2 emissions built into it?

[Dr. Amit Kumar]

The construction emissions are the lowest component of emissions over a life cycle. You are looking at even less than 1% of the total life-cycle emissions that you are considering when you compare this with a fossil-fuel plant. Overall, then, this is a very low component. The major components would be harvesting, transportation and getting the whole feedstock to the plant.

[Greg McLean, Conservative, Calgary Centre, AB]

Okay.

What percentage of the fuel mix, if you're talking about natural gas mixed with renewable natural gas, would this plant be able to supply, given the ideal sizing and costing of this?

[Dr. Amit Kumar]

In terms of the yields, I'll probably have to get you the number, but typically the yield for renewable natural gas goes at 30% to 40%, or 0.3 to 0.4 kilograms of renewable natural gas that you could produce per kilogram of biomass. To get to 500,000 tonnes, however, that's what we need to do—

[Greg McLean, Conservative, Calgary Centre, AB]

How much of the gas could you replace with the renewable, then, given the facility you're talking about?

[Dr. Amit Kumar]

How much to replace that will depend on what my baseline is, so what I'm comparing with.

[Greg McLean, Conservative, Calgary Centre, AB]

I appreciate that. If you can give us a model we can go on there, it would be really instructive. I thank you very much.

Because Mr. Angelucci had some good comments here, I want to ask him about biodiesel. He talked about cost comparisons with natural gas, and the price gap between biodiesel and regular diesel—15¢ versus 3¢ is written here—but let me ask you this: Does this include the cost of excise taxes that are incumbent upon diesel and that aren't imposed on biodiesel?

[Giovanni Angelucci]

Thank you for the question.

Yes, that is supposed to be an applies-to-apples comparison, when you're comparing biodiesel to regular diesel, so sort of taxes—

[Greg McLean, Conservative, Calgary Centre, AB]

That's with no tax on biodiesel, but there's excise tax on real diesel.

[Giovanni Angelucci]

Yes. Factoring in some of the benefits that it already has, we're seeing still that kind of gap between biodiesel and diesel. It fluctuates, and to be very truthful, diesel and biodiesel are always fluctuating—

[Greg McLean, Conservative, Calgary Centre, AB]

If we took the government's extra costing into diesel, how would they compare, one with the other?

[Giovanni Angelucci]

If I understood the question correctly, it's what you see: It's about a 15¢ spread between a zero blend and a B20 blend.

[Greg McLean, Conservative, Calgary Centre, AB]

So the zero blend does include...?

[The Chair, Liberal, James Maloney]

I'm going to have to stop you there, unfortunately.

Mr. Lefebvre, we go over to you.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

My thanks to all the witnesses for joining us today.

Again we have another really good panel of witnesses, just to show us the ingenuity in Canada, as we are tackling climate change and looking at economic opportunities, which this represents. I really want to thank all of the witnesses who are here today for the work you do.

Actually, I'll ask Bob a question.

How are you?

It's good to see you.

We've heard a lot about food versus fuel, which I find very interesting. At the same time, though, we talk about supply and demand, because that obviously drives the economy. As I say, we're looking at this as an economic opportunity. It's a necessity. At the same time we're looking at how we reduce our greenhouse gas emissions.

Your members are obviously among some of the largest fuel producers in Canada. How do they see this economic opportunity and their role in reducing greenhouse gas emissions at the same time?

[Bob Larocque]

Thank you very much, Paul.

To put it in perspective, for the clean fuel regulation, that's B10, if you wish, or bio-based 10% and ethanol at 15%, we need billions of litres in Canada by 2030—anywhere from six billion to 10 billion. We will send a brief to the committee about those numbers of litres versus percentage and cost that we talked about. We are taking this very seriously. We're looking at every single option.

Hydrogen is also an option for us. Electrification is another one, with charging stations in our sites. We're also looking at coprocessing, which is actually putting crude right into a refinery. That's something that we haven't talked about yet, but there's a facility in Burnaby, B.C., right now doing this. They want to double it. Tidewater is also talking about that in their investments.

This is significant, and billions of dollars are going to be invested. We already saw $1 billion go into two facilities in the last three months, and we'll see a lot more.

[Paul Lefebvre, Liberal, Sudbury, ON]

That means that the businesses are seeing a big opportunity to do this.