Natural Resources Committee on June 18th, 2021

[Michael Wolinetz]

I agree with the statement that if you break new land, you could emit a significant quantity of greenhouse gas emissions. What I don't agree with is that our current bioenergy system depends on breaking new land. Based on what I've seen, cropland in Canada in general has been declining slightly. Nor do I agree with the statement that you would have to break new land to expand the bioenergy system.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

[The Chair, Liberal, James Maloney]

Thanks, Mr. McLean.

Mr. May, we will go over to you for five minutes.

[Bryan May, Liberal, Cambridge, ON]

Thank you, Mr. Chair.

Before I get into the questions I have, I want to acknowledge that Mr. McLean had a very good point, that we might be working with data that's not nearly current enough. I'm wondering if Mr. O'Connor would be willing to share with us that data he referred to. Obviously, he can't do that right at the moment, but I'm sure there's a lot to that data.

Mr. O'Connor, if that's something you could provide to us, I know we would greatly appreciate that.

[Don O'Connor]

There is some information in the public domain that I could share. Of course, a lot of the information I have from companies is confidential. I can't share individual company information, but I do know that there is some information in the public domain.

[Bryan May, Liberal, Cambridge, ON]

Thank you.

Going over to Mr. Plumptre, I'm wondering if you can comment on how we can leverage the opportunity for renewable fuels, low-carbon fuels, and carbon capture, utilization and sequestration present us, and their associated decarbonization to create a just transition for those working in the fossil fuel industry today.

[Bora Plumptre]

Thank you, Mr. May.

Well, it's a very big question, I think.

To pick up on something that Mr. O'Connor was emphasizing in his remarks, one of the things that I think this committee could potentially have an influence on, given the fact that the clean fuel regulations have yet to be promulgated in the Canada Gazette, part II—they're still under development—is to push for a potential reorientation in the design of these regulations and to focus on the development of renewable fuel pathways and energy pathways that are consistent with reductions in that 75% of emissions in the life cycle that Mr. O'Connor was referring to in terms of end-use combustion. Those scope 3 emissions are really what we need to reduce in order to make progress on these longer-term aspirations that we have for net zero by 2050.

Right now, I think the regulation is trying to do a lot of things in terms of supporting pathways like carbon capture and enhanced oil recovery, which may be legitimate things to support when we bring in other criteria like just transition, but in terms of the math of reducing carbon emissions, that focus on scope 3 is something that could be enhanced through the regulation that's under development right now.

[Bryan May, Liberal, Cambridge, ON]

Again, my focus is more on the just transition piece.

I'm wondering if you have any thoughts or suggestions on how we can use the incredible skills of the workforce we have. What type of training, if any, would be necessary to move today's fossil fuel workers into tomorrow's future low-carbon workers?

[Bora Plumptre]

Well, I think we have a bit of a model that the federal government has already started to develop in its just transition task force for powering past coal. We have made federal investments in some centres to develop new training opportunities for oil and gas workers. Clearly, there's not going to be a one-to-one transfer of every type of skill, and the labour market is something that will evolve over time, but I.... This is a tough nut to crack, and you know....

[Bryan May, Liberal, Cambridge, ON]

Fair enough.

[Bora Plumptre]

Yes.

[Bryan May, Liberal, Cambridge, ON]

Quickly, for Mr. Zacharias, my question for you, sir, is about the transportation of hydrogen from the production site to its final destination. How do we store large quantities of hydrogen? Is this method commercially viable if we were to increase nationwide hydrogen production for that export use, whether it be tenfold, 100-fold or 1,000-fold? Do you have any thoughts on the transportation side of this?

[Dr. Mark Zacharias]

It's a good question. We would need to build out a new hydrogen transportation infrastructure if we were to scale up two- or threefold at least. Right now, you can transport hydrogen in trucks at 250 to 500 bar up to 10,000 psi, but it's not all that cost-effective. I think that in the near term blending hydrogen with the existing natural gas stream up to ratios of 20% plus, may be possible.

Many jurisdictions are looking at dedicated hydrogen pipelines at some point. Fortis, in B.C., is looking at the potential to use a disused natural gas pipeline and re-sleeve it. Then it could accommodate up to 100% hydrogen. There are a number of storage and transportation options out there, but I think it's early days for Canada.

[The Chair, Liberal, James Maloney]

Thank you.

Thanks, Mr. May.

We're moving into a third round of five minutes each, starting with Mr. Zimmer.

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

Thank you, Mr. Chair.

To start off, my first question goes to Mr. Wolinetz.

I've asked different groups before about the affordability of renewables. I think it ultimately comes down to the person who is using them. We need to make them affordable. Certainly, our fuel prices have gone up. We need to make it so that it's sustainable for Canadians. They're the ultimate payers of the bill, so to speak. Again, we need to make it affordable.

Mr. Wolinetz, you talked about a contraction in the energy sector and said that it's possible this would occur. I'm in northern B.C. We have huge plays on natural gas. As many know, the largest project ever taken on privately in Canada is our LNG Canada project out on the west coast, all to get that clean natural gas to the world. We all know that's going to reduce emissions. It has a potential impact of halving emissions where they're using high-emitting forms of energy.

What more can we do to promote that clean energy? This is something that's available right now and that we can get out to the world. Even in the next 10 to 20 years, if there are new forms of renewables that come out that might be better, if we can go to electrification, etc., this is certainly a good idea in the mid-term. What are some opinions around that, Mr. Wolinetz?

[Michael Wolinetz]

My opinion is that the greenhouse gas benefit of exporting LNG is transitory. You're absolutely right that burning gas is less emissions-intensive than burning coal. However, I have not seen a very long-term study—to mid-century—in which the world is trending towards very deep greenhouse gas reductions along with a large or growing role for natural gas in any energy system. It's going to have a supporting role that's probably going to dwindle over the years.

I don't think LNG has a very strong role in supporting the transition to clean energy.

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

I'm a bit puzzled by your answer, because we know that even in the United States a lot of electricity is produced using coal and other hydrocarbons. To me, using the fossil fuel that emits the least would seem to be an obvious answer.

I want to ask you about the forestry sector. You referred to renewables and using some of the waste products from lumber processing, such as bark, tree stumps and that kind of stuff.

I live in a very remote part of the province. We're 15 hours away from Vancouver. Even more remote are these logging places that are up the highway. The biggest challenge to getting these products that are often put into burn piles is the remoteness. We all would like to use them in a better way to make pellets and things like that so they are used efficiently.

How do you overcome the life cycle reality that most of this waste that could be used for renewable energy is so remote?

[Michael Wolinetz]

Transportation cost is a big element of any bioenergy system. The estimate I gave that maybe 15% to 20% of our current fossil fuel liquid energy consumption could be replaced with bioenergy produced from residues from forestry and farming takes into account both sustainability criteria and technical criteria, as well as, to some extent, production cost.

The estimates of how much residue is available generally come from spatial analysis that considers where this stuff is relative to our transportation networks and our major processing hubs. The higher the value of that fuel, the further afield you might go to get it. Without a doubt, there are certainly some remote logging operations for which it won't make sense to bring in that residue and there are others for which it will make sense.

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

It brings me back to what my colleague Greg McLean was talking about with the life cycle. At the end of the day, by the time we've gone and collected some of the wood waste and brought it back and gone through all of the process involved in that, have we come out ahead? It doesn't seem as though we have.

[Michael Wolinetz]

In terms of greenhouse gas emissions, we have absolutely.

The analysis tools that we use cover the full economy and all energy used within the economy. They don't show that we somehow run out of energy. The question is not how much energy we have; it's whether we can use energy without causing environmental damage. There are vast quantities of energy available. It's the environmental damage we need to concern ourselves with.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Zimmer.

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

Thanks, Mr. Chair.

[The Chair, Liberal, James Maloney]

We go back to Mr. Weiler for five minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

I want to pick up on a point that my colleague was just mentioning. You mentioned earlier in your opening, Mr. Wolinetz, the potential for substantial abatement if we're using more grassy or woody products.

I think the previous member mentioned a key point in terms of what type of support or regulation it is going to take to incentivize or move us more in the direction of using those products that are now going to waste or otherwise.

[Michael Wolinetz]

I think policies like the clean fuel regulation are very helpful. That said, the clean fuel regulation, to get to a point where we're using those wastes, would need to be stronger. We need to be thinking about where it's going after 2030.

Something more in line with where California and B.C. expect to be with their similar policies by 2030 should do it. B.C., for example, has already provided enough of a transitional signal for the refinery in the greater Vancouver area to start doing co-processing. They're looking at how to actually use these materials and process them at the same time as our fossil crude in order to make a blended renewable fossil product in such a way that we could eventually transition over to a fully renewable product.

I think we're on the right track with the clean fuel regulation, but we need to expect that it will need to get stronger.