Evidence of meeting #34 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 carbon.
A recording is available from Parliament.
Special Advisor, Clean Energy Canada
I don't know the answer to that. I do know that there are a number of institutes working on that very question right now that are going to be reporting out over the next year or two. It's a good question.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Okay.
From your observations, where is most of the private sector investment going in the hydrogen space? Is it going to blue hydrogen or green hydrogen? Where are you seeing the private money going in this country?
Special Advisor, Clean Energy Canada
Globally, I would look at green hydrogen as where the investment money is going for those countries that don't have natural gas assets. Right now in Canada, I think I see blue hydrogen as being kind of a source, and attractive for capital right now, mainly because we have natural gas at very low cost. We have a trained work force. We have companies that are set up and ready, and we have uses for natural gas right now as well. Blue hydrogen can be used in steel, cement, chemicals, fertilizers, as well as in the refining processes.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Something that Mr. Cannings was talking about is that some people have been trying to push against this enhanced oil recovery. It's an issue that's quite close to my heart because the Alberta Carbon Trunk Line, which you referenced, begins in my riding at the Sturgeon Refinery. We know we're sequestering over a megatonne of carbon dioxide every year going into these somewhat nearly depleted conventional oil wells near Red Deer.
Would you agree that if we are going to be using oil as a resource for decades to come, enhanced oil recovery is probably the most carbon efficient way to produce that oil?
Special Advisor, Clean Energy Canada
I would agree that if we are going to produce oil and continue to produce it in decades to come, EOR is one of the most efficient ways to do it. It's certainly much more efficient than oil sands mining and the refining that comes along with that.
Again, we can get into a further conversation around, kind of, oil forecast futures, but right now, EOR does seem to be a low-cost and fairly sustainable way to produce oil.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Do you think it's also a good transitional way...because it seems that it's very profitable for people who are investing in carbon capture to take that carbon? Quest, I believe, is injecting it into some of these formations, but it's not being used for EOR.
Do you think it could be a good transitional way for some of our energy companies to invest more in carbon capture over the years to come—that EOR could help that transition?
Special Advisor, Clean Energy Canada
Absolutely. We're at the beginning of a journey around hydrogen. The infrastructure and the assets that you build today, whether it's road, rail, pipelines or processing, even though it may be specific to blue hydrogen now, it may transition to green hydrogen later, and it may provide us with a competitive advantage to transition to green hydrogen at some later date.
I think those assets and that experience—
Conservative
Conservative
Liberal
The Chair Liberal James Maloney
You will get lots more opportunity, though, so don't worry.
Mr. Lefebvre, you're up next.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you, Mr. Chair.
Once again, this is a great panel of experts and witnesses here today. Thank you so much.
I would like to make a comment to my colleague from the Bloc Québécois, Mr. Simard, concerning carbon capture, utilization and storage, or CCUS. He seems to have some reservations about the scientific evidence, but all the witnesses speak favourably of it.
I would encourage him, perhaps in a future term, to go to Mr. Lloyd's area. There are some incredible technologies there, and I think we should all see them first‑hand to understand their importance.
I want to touch base on a few things.
Mr. Wolinetz, in your remarks, you shared your concerns with jobs as we transition to a low-carbon economy and said that it will not be enough to offset the loss of jobs in the fossil fuel industry.
I want to know your sources on that, because it's a big statement to make. What analysis, what studies are you basing that conclusion on?
Maybe start with that.
Partner and Senior Analyst, Navius Research Inc.
Sure. At Navius Research, most of our forward-looking analyses are produced with what's called a “general equilibrium model”. This is a model that shows all of the interactions between the different sectors within the economy, so it tracks allocation of capital, commodities that are used and produced by different sectors as well as employment. Within this model, we can simulate the impact of greenhouse gas policy, for example, that would lead us towards a net-zero greenhouse gas emissions future. We can look at how that changes activity in different sectors as well as emerging sectors—these would be green energy sectors that may not exist yet—and from that, we can infer the quantity of jobs that may be lost in some sectors and that may be gained in other sectors.
The challenge with the transition we're facing is that we have a significant export industry in conventional energy sources that are emitting greenhouse gas emissions. In that transition, we may be able to supply ourselves with low-carbon fuels, but if we don't seize opportunities to also continue to find ways of exporting energy as well, then there may be a contraction in the overall size of the energy sector.
I would want to put this in context, though. Nationally, the energy sector is an important sector, but Canada has a vast number of jobs in almost every other sector, notably service-related sectors. Regionally, of course, though, it may be more important to support green energy growth and green energy jobs in some parts of Canada, notably Alberta and Saskatchewan, to mitigate economic impacts in those regions.
Liberal
Paul Lefebvre Liberal Sudbury, ON
When you have that analysis and as you're studying this...we're talking here about hydrogen and the future of that potential, certainly for Alberta and Saskatchewan with respect to the CCUS. That's what we're talking about here, the blue hydrogen. We're also talking about biofuels a lot, the clean fuel standards.
With regard to the potential that has certainly for the agricultural industry, are all of those jobs taken into context, as well as the potential this has, as we're going down that path?
Partner and Senior Analyst, Navius Research Inc.
We look across the full economy. The potential for new jobs from green energy sectors is very large, but, to be honest, most of our analyses show that you're at high risk of net losses of jobs from Alberta, for example.
On seizing an opportunity to export green energy in the form of hydrogen, I'm not as optimistic as Mr. Zacharias is, but that would certainly go a long way to mitigating that situation.
Liberal
Paul Lefebvre Liberal Sudbury, ON
However, we're still at a point of saying that we know we need to decarbonize and at the same time trying to produce jobs or keep jobs or transition these jobs. That's kind of the focus of our government. Thank you for that, because it's a concern that we all have. We know that we need to head in that direction, but at the same time, how do we transition these workers to the same type of lifestyle that they have? If we leave people behind, it's tough to get everybody on board.
Mr. Zacharias, on the hydrogen storage—
Liberal
Paul Lefebvre Liberal Sudbury, ON
could you maybe expand on that? What is the cost of that and what is the potential of that?
Special Advisor, Clean Energy Canada
Mr. Chair, do I have time to respond?
Liberal
The Chair Liberal James Maloney
That's really brief. That's perfect. Thank you.
Next we have Mr. Simard for two and a half minutes.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you, Mr. Chair.
Mr. Wolinetz, you seemed to be puzzled by the hydrogen issue. I think you ended your presentation by saying that you were skeptical.
Could you say more about that?
What are the reasons for your reservations about hydrogen?
Partner and Senior Analyst, Navius Research Inc.
There's a lot of excitement and news about green hydrogen becoming cost-competitive with blue hydrogen in the near term. I think there is some nuance and some context there that causes me to be somewhat more reserved in my excitement.
The first one is that we have to think about the context. For making green hydrogen from solar power, the costs are truly plummeting for solar power. Canada has a good solar resource, but not nearly as good as what the U.S. southwest has, for example. The cost of solar power here will never be as low as it is in the U.S. southwest.
The other cause for excitement is the fact that you can make green hydrogen from electricity at hours of the day or times of the year when that electricity has a relatively low value. The problem is, as soon as you enter into that market, you suddenly have use for that electricity, and people will enter into that market until that electricity becomes expensive again. What's more is that hydrogen is not the only use for that electricity. We're also seeing costs of battery energy storage plummeting so that energy utilities or other players in the energy market could use that electricity, store it, and deliver it at a time when it's much more valuable. This idea of an off-peak resource for hydrogen is real, but it's by no means unlimited. It's always going to exist at the margin.
Bloc
Mario Simard Bloc Jonquière, QC
You just mentioned the cost of battery technology, which is improving.
Are the costs associated with storing carbon to produce blue hydrogen high?
Are they such a deterrent that companies that want to make blue hydrogen will be tempted to seek federal government support?
I am asking because I wonder what the advantage of hydrogen produced from carbon capture would be over hydrogen made from storage in batteries.