Natural Resources Committee on June 18th, 2021

[Dr. Mark Zacharias]

Yes, maybe.

I would look at Canada, particularly in the battery medium, heavy-duty vehicle space. We're doing quite well.

Lion Electric has an order for 2,400 trucks from Amazon. GM is going to be building vans at its plant in Ontario. We have the metals and minerals to supply battery manufacturing, and a lot of work going on in that space. It's happening through government right now.

Again, it's not hydrogen related and it's not low-carbon fuels related, but it generally has the same objective at the end of the day, which is decarbonization of transportation.

[Lloyd Longfield, Liberal, Guelph, ON]

That's terrific. Thank you.

I'm going to switch over to the Pembina Institute in my last 50 seconds.

Looking at carbon capturing storage, Pembina Institute gave me some very good information on that last summer when I was doing some research around that, where the 45Q program in the States had some tax incentives.

I understand that Finance Canada has an open call for people wanting to contribute to tax policy around encouraging carbon capture and storage. Are you involved with that with the Pembina Institute?

[Bora Plumptre]

Certainly I would be happy to connect you with my colleagues who are leading our participation in that consultation process, which I believe is ongoing.

I think that the government is looking to have that concluded by the fall so that investments can start getting under way.

[The Chair, Liberal, James Maloney]

We appreciate that.

We have about 16 minutes left. We're going into another round of six-minute questions, which would mean only two people would get to ask. If everybody agrees to reduce it to four minutes per person, we can get everybody in for one round. Does anybody disagree with that? No? That's great.

Continuing with the Lloyd theme, Mr. Lloyd, you are next.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Chair.

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

I'm passing my time on to Mr. McLean.

[The Chair, Liberal, James Maloney]

Okay.

Mr. McLean, you have four minutes.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

Thank you to my colleague Dane Lloyd.

I'll remind Mr. Longfield, the last speaker, that last week in the House he voted against carbon capture, utilization and storage, so I thank Mr. Longfield for putting in a new wrapper that might look a little better from his perspective. It's much appreciated.

I'll go to Mr. O'Connor here.

Mr. O'Connor, you talked in your testimony about increasing yields from crops. Now, Mr. O'Connor, increasing yields is probably built on things like fertilizers and technologies, all of which, of course, are carbon intensive, energy intensive. Give me the circular rationale for how we actually get more energy efficiency by actually producing more, if you will, carbon in order to kind of get to the biofuels at the end of the day.

[Don O'Connor]

It's not really true that we're using more fertilizer per tonne of product. We actually see increases in nitrogen-use efficiency in most crops across Canada, but we also have things like new varieties being developed. Tractors are getting more efficient. Implementation of innovation practices in agriculture is actually a very social kind of exercise, and all of the agriculture groups are looking at how they can help even their average producers become as effective as their most efficient producers.

[Greg McLean, Conservative, Calgary Centre, AB]

I'm sorry but I have only a little bit of time here.

I'll move to Mr. Zacharias.

Mr. Zacharias, in the same vein, trying to circle some of the facts here, you talked about 100 gigawatts of hydrogen power coming in the near term here as equivalent a hundred Site Cs. Site C was anticipated to cost $16 billion and it is way beyond delivery. We're actually only going to get power out of Site C at best by 2025, so that will mean way more costs and way more time.

Tell us how far away these hydrogen solutions are that are one hundred times Site C that we're talking about.

[Dr. Mark Zacharias]

I gave the example of Western Australia looking to scale up over the next decade. It has, much like the southwest U.S., tremendous solar opportunities and wind opportunities. We may not have those in Canada.

Canada's scale-up of hydrogen is likely going to be stepped, and it will be blue hydrogen—which is happening now—with very modest increases for specific applications, followed probably by green hydrogen, which is happening already in Quebec. There's an 88-megawatt electrolyzer being built there. Basically, in those provinces that actually have energy surpluses at certain times of the year where there's existing load available to produce—

[Greg McLean, Conservative, Calgary Centre, AB]

Let's stop there, because we do have to talk about capacity and not just about excesses at certain points of time in the year. I think we agree on that.

I'll ask one final question, Mr. Zacharias. We've talked about how we're going to need two to three times as much energy, and yet replacing the natural gas delivery network, as far as power goes in Ontario and Quebec alone, is going to require—Enbridge was before the committee and provided us with that—seven times the 15,000 megawatt facilities...in a Grande-Baleine style of project. That is not going to happen in the short term, is it?

[Dr. Mark Zacharias]

No, it takes many years to scale up.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you very much.

I have one final question here for Mr. Plumptre.

In your presentation, you talked about a lot of things, including de-risking. I spent 20 years in the financial industry, Mr. Plumptre, and when I hear somebody saying things like “de-risking”, it means transferring risk from the actual project components to the taxpayer. We call that “rent seeking”. We say, “Who's going to benefit from this at the end of the day?” and it had better be the taxpayers of Canada, because it's the taxpayers of Canada who are actually the ones paying for it.

Can you comment on that, please?

[Bora Plumptre]

I would absolutely agree that these policies are implemented with taxpayers or, more preferably, citizens in mind.

I think when I was discussing the idea of risk, what I was trying to get at was that in my experience interacting—and I should be clear of course that I don't represent the clean fuel industries as I am participating here on the panel—with investors in these spaces, what I've consistently heard, is that relying on some form, some expression, of the public purse, whether through tax expenditures or through direct subsidies in one form or another, is much less preferable in getting projects under way than is having a secure, dependable regulatory program in place that they know is going to be there in five, 10 or 15 years.

[Greg McLean, Conservative, Calgary Centre, AB]

You're talking about all these things—

[The Chair, Liberal, James Maloney]

Thank you, Mr. McLean.

[Greg McLean, Conservative, Calgary Centre, AB]

—when you talk about direction.

[Bora Plumptre]

Okay.

[The Chair, Liberal, James Maloney]

Mr. Lefebvre, you're next.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I'll continue talking to Mr. Plumptre.

Certainly in the study we're looking at clean fuels, and I was wondering if maybe we could get your feedback for this committee on the importance of having a price on carbon, or a carbon tax, and whether we can reach our climate targets without a price on pollution or a carbon tax.

[Bora Plumptre]

I know the committee has heard from Professor Jaccard on this matter. Strictly speaking, from an economics perspective, these targets could be reached without a carbon tax. I think that from a practical perspective, when I look at where Canada is today, my answer is, no, we can't do it without a carbon price, but that doesn't obviate the need for complementary regulations in order to get to where we need to go.

[Paul Lefebvre, Liberal, Sudbury, ON]

Yes, and just like the clean fuel standard is very important as well, certainly.

However, what's optimistic, I guess, on a go-forward basis, is that now we have all political parties that agree on a carbon tax. For a while, the Conservatives were obviously fighting against it, but now they're on board, so I find that at least we're all on the same page in moving things forward.

Mr. Zacharias, I asked you a question a long time ago now—about an hour and a half ago—on the hydrogen storage that you talked about. I think it's very important that we understand this. Very quickly, here's what I want to know. How do we store large quantities of hydrogen? Is that currently viable? If we're going to see a tenfold or 100-fold increase in nationwide hydrogen production, what are the challenges and what are the opportunities?

[Dr. Mark Zacharias]

There are many different ways to store hydrogen. You can store it in tanks under pressure. You can store it underground in salt caverns, which is happening in the U.S. You can convert it into another product such as ammonia, and you can transport it long distances. You lose about 30% of the efficiency on hydrogen by doing that. Also, like natural gas, you can store it in pipelines if you have a dedicated pipeline network, and that can provide quite suitable and long-term storage.

Those questions haven't yet been sorted out. Again, I think we're a ways away before being able to answer those.

[Paul Lefebvre, Liberal, Sudbury, ON]

We had a witness last week who talked about how, certainly in the U.S., there was a hydrogen pipeline. It was very interesting for us when looking at what kind of infrastructure you need for that, right? Can we convert an existing pipeline to a hydrogen pipeline or not? Those are questions that are top of mind as we go down that path. What are your thoughts on that?