Natural Resources Committee on June 14th, 2021

[Simon Moore]

Thank you for the question.

We absolutely believe that sequestering CO2 is indeed safe when it's done in the right way and in the right geological formations. It has been done for many years in different places, so yes, the short answer is that we do think it's safe when it's done the right way.

[Mario Simard, Bloc, Jonquière, QC]

I would like to put a question to Mr. Romano.

I own an IONIQ, which I really like, and I recently learned that the battery used in the IONIQ 5 model will be able to charge to 80% in 15 minutes. You mentioned earlier that the lack of charging infrastructure was a challenge, and that it led us to believe that hydrogen was a good solution.

However, don't you think that, within five or six years, it will be possible to charge an electric vehicle to 80% in less than 15 minutes?

[Don Romano]

That's a good question. I believe that is going to happen if we commit ourselves to requiring the fast-charging DC infrastructure that's necessary. For instance, today in Ontario we have only 94 fast chargers versus thousands of gas stations. If you consider everybody is moving in that direction, if every gas station had a fast charger, then yes, 15 minutes is not a ridiculous time to wait to get an 80% charge.

I would also say that I don't think there is going to be one solution to our zero-emissions problems. We are going to find that there will be multiple solutions, especially, as my colleagues have talked about, with the heavy-duty truck industry, the bus industry and even the train industry being able to run more efficiently on hydrogen. With a hydrogen vehicle, with our Nexo, which you can buy today here in Canada, if you have a place to refuel, you can charge that in five minutes. It's no different from filling up a vehicle with gas. It provides you the ultimate fast charging, plus you get over 600 kilometres on that charge.

Even though we're getting closer to 500 kilometres and although I do believe battery technology will improve, my main point is that whether it's a battery or a fuel cell, without the infrastructure moving faster and even with our industry already investing $300 billion in zero-emission vehicles, we have a problem coming up, which is that we have too much supply compared to the demand.

[The Chair, Liberal, James Maloney]

Thank you. Thanks, Mr. Simard.

Mr. Cannings, we will go over to you.

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

Thank you. I'm going to turn to Mr. Moore.

You talked about a project in Saudi Arabia where you're producing hydrogen, I believe you said, for export. This is something I've heard from other sources. I was at a G20 meeting where the German minister talked about investing in green hydrogen projects in Chile with massive solar panels—I assume this is what's going on in Saudi Arabia—and then capturing that energy as hydrogen and exporting it around the world. The Japanese minister indicated the same sort of thing.

I've asked this of other witnesses in this study. I'm wondering if you could comment on the future of that global market in hydrogen, how it could play a role over the next 30 years as we go to net zero globally, and what opportunities there are for Canada, especially in green hydrogen and perhaps also in blue hydrogen. I might get to more on that later, but what are the opportunities for Canada to play a role in that global hydrogen export-import market?

[Simon Moore]

That's exactly right. Just to very briefly describe this project, it's solar power and a wind farm creating renewable electricity using an electrolyzer to create carbon-free hydrogen. We then turn that into ammonia to simplify the transportation around the world, and then dissociate that ammonia back to hydrogen at or near the point of use to provide carbon-free hydrogen fuel mobility.

The reason the project is in Saudi, and I know this sounds incredibly simple, is that the sun shines a lot and the wind blows a lot in the northeast part of Saudi Arabia.

As you mentioned, for places like Chile, obviously what it comes down to is that the cost of renewable energy is a huge part of a carbon-free project that is driven by an electrolyzer. You obviously have capital downstream, but the cost of the renewable energy is very important. Places in the world where renewable energy is available at a very competitive price have the potential to be locations for exporting hydrogen to places around the world where it's not economical to produce that renewable energy.

You mentioned Germany. Some of you may be familiar with this. Throughout Europe and particularly in Germany, they are embracing the idea that they're going to need to import hydrogen, because it's not practical to produce hydrogen economically within Germany. Obviously, as everybody knows very well, Canada is blessed with some very attractive costs of renewable electricity, and that absolutely is a potential to be leveraged to produce electrolyzer-driven carbon-free hydrogen, either for use in Canada and/or to be exported.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings. Mr. Zimmer, we'll go over to you for five minutes.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Mr. Chair. Thank you, guests.

I have just one question, Mr. Romano. You talked about incentives, mainly around infrastructure around renewable energy. I have a big question, which I'm sure you understand affects a lot of Canadians. It is about the term “affordability”. We've heard the term many times before when talking about the taxpayer not wanting to subsidize certain sectors and certain industries. We've certainly heard that around the natural resource side of things.

When do you see renewables becoming self-sufficient to the point they don't need a big government subsidy, either via insurance or for purchasing the vehicle or by providing funds for infrastructure? When do you see our getting to the tipping point where the taxpayer isn't paying the bill?

[Don Romano]

I think it really has to do with the infrastructure. Again, we have more supply than we have demand. I can deliver an electric vehicle today, and with subsidies, I can deliver it in Quebec for under $30,000. Affordability isn't the issue.

The concern comes down to the charging infrastructure and the range. We're able to tackle the range. With our Kona EV, we now get over 400 kilometres, so range is becoming less of an issue. However, the charging is a concern. Over three million Canadians still live in apartments and don't have that infrastructure. Once we have that in place and we start getting our volume over the 50% mark—when over half of the vehicles we're producing are electric—I believe we'll be at the inflection point and we will have bridged the gap between the cost of an electric vehicle and that of an ICE vehicle. We're probably five years away.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Maybe I'll be more specific.

You talked about the necessary infrastructure. I'm in British Columbia and I often go to Vancouver, where I see a lot of charging stations. However, I live in Fort St. John, where the charging stations are few and far between. Even thinking about an electric vehicle, for me.... My destination is usually Prince George or somewhere in between in my riding. It's around five hours. In the winter, it would be impossible to use an EV in my job.

This is spitballing it, and I don't know if your industry has looked at this aspect. You talked about $300 billion in the industry around EVs. How much does the industry see is necessary in terms of dollars to set up the necessary infrastructure? You were talking about the shortfall.

[Don Romano]

When you talk about the infrastructure, do you mean infrastructure for building the vehicles or building the charging—

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

No, I am talking about the charging infrastructure.

[Don Romano]

If you put the charging infrastructure on top of the cost of the vehicles and require the manufacturers to supply it, I don't know how long it's going to take to make an affordable EV. Right now we make vehicles that don't require us to pay gas stations to produce and distribute gasoline.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Right.

[Don Romano]

I think there are people in better positions to provide the electricity, while we provide the cars. Does that make sense?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Yes, but I wasn't asking you as an industry to set up that infrastructure.

What is the cost, or has your industry costed to other sectors the amount required to build that infrastructure? Esso is an example. They set up an electric charging station. To meet the demand, how much infrastructure is required?

[Don Romano]

I got it.

I would ask, “What's the cost of not doing it?” I don't know what all these 12,000 gas station operators are going to do for a living when we are committed to an electric future, and it's not just me. I'm the former chairman of the Global Automakers of Canada. This is not just Hyundai; this is the industry that's committed to going in this direction. I don't know what they're going to do. What are we going to do with all the people who are employed by the gas stations? Are people going to shop at stores that don't have EV charging available to them? We're going to see a whole change in the dynamics.

I don't know what that cost is going to be. I just know that the cost of not doing it is that there will be a lot of empty gas stations on a lot of corners.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

How much time do I have, Mr. Chair?

[The Chair, Liberal, James Maloney]

You have 50 seconds.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

One topic that I'll bring up, just because it's in my backyard and it's a way to reduce emissions dramatically—we see this around the world—is natural gas. I remember talking to the Canadian Gas Association many years ago about setting up filling stations at your home. You could simply attach to the natural gas line that comes to your home. Why don't we don't hear more about natural gas as a better way to reduce emissions in Canada?

I'll throw that out there for anybody.

[The Chair, Liberal, James Maloney]

Anyone?

[Dr. Jacques Roy]

In the trucking industry, efforts have been made in that area. Although natural gas helps reduce greenhouse gas emissions, it is not a zero-emission technology. So it does not help reach that goal. What is more, as far as I understand the trucking industry's experience, natural gas leads to other problems, including in terms of engine maintenance.

At first glance, it is an attractive solution, but, in practice, the zero-emission energy objective is not being reached, and the use of natural gas leads to other difficulties in terms of maintenance.

[The Chair, Liberal, James Maloney]

Thank you. Thanks, Mr. Zimmer.

Ms. Jones, we'll go over to you.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you, Mr. Chair.

I want to thank our panellists this morning for some wonderful presentations.

I have a couple of things.

As you know, with respect to the hydrogen strategy for Canada, we've already put it out there. The objective is both to ensure there is more development and also to have the right regulatory measures and so on.

Mr. Moore, I appreciate the suggestions you made in your presentation. I would ask that you follow those up in more detail so that our committee can look at them as we move into preparing our final report and putting forward our recommendations.

[Simon Moore]

Thank you. We'd be happy to do that.