Natural Resources Committee on Oct. 7th, 2024

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you very much.

My question this time is for Mr. Kabbara.

One thing I liked in your submission here, when you spoke to us, was that these electricity solutions are not consistent across the country. I agree with you.

Electricity in parts of this country is provided by hydro, by nuclear and sometimes by natural gas, which has allowed us to wean off of coal and bring down emissions in Canada significantly, primarily in one or two provinces out west.

I agree with you. You said the grid is going to have to grow by 2.3 times by 2050. Two to three times is what we're going to have to grow. It's a doubling, plus. You're saying that's going to be accomplished with 3% growth, yet the electricity grid has grown that much already. Therefore, it's going to have to continue to grow to meet the growing demand from the increasing use of power in our economy.

Now, power in our economy is roughly one-third electricity, one-third motive power and one-third natural gas for industrial means. You're going to say that we have to get rid of the two-thirds that are hydrocarbon-based and build up the other one by 3% a year in order to get to two to three times.

I think we're going to have to get significantly higher.

Can you comment, please, on how the parasitic cannibalization of the other forms of energy are going to require the electricity grid to grow even further than it has?

[Moe Kabbara]

When we look at the last 20 to 30 years, we haven't seen that much growth in electricity. This has been an era of a flat load, basically. It's been around 0.7%.

I was referring earlier to 7% growth between 1920 and 1960.

I want to also highlight a critical point here, which is that when we say doubling or tripling, around 40% of the energy mix in Canada is still going to come from sources of energy other than electricity. Even in the most ambitious modelling, you see electricity between 40% to 60% of the energy use. That means there's still 40% coming from other things. That includes biofuel, hydrogen—

[Greg McLean, Conservative, Calgary Centre, AB]

What would that be? Where would that 40% come from?

[Moe Kabbara]

It would come from biofuels, hydrogen and fossil fuel with abatement—with carbon capture. Even in the most ambitious climate modelling, we're not going to see electricity be 100%.

[Greg McLean, Conservative, Calgary Centre, AB]

There is going to be no extra electricity required to make the hydrogen, the biofuels and all of these other things. It's going to be, again, parasitic on the electricity supply load.

[Moe Kabbara]

There will definitely be electricity needed as input and that's kind of reflective of that 60%.

Our position in our organization is that we really need to look at options that reduce that reliance on electricity, including blue hydrogen, for example, which is a way to upgrade natural gas to become a net-zero fuel and sequester the carbon. That is a way to ensure that we're not necessarily relying purely on electricity.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

You said these hurdles are not fatalistic. Getting the western provinces off of natural gas and provide for heat and power for their citizens in -40°C degree weather by 2035.... Would that be fatalistic?

[Moe Kabbara]

Our position is that a net-zero grid is something that we need to work toward as part of our net-zero 2050 targets. As mentioned earlier, the current regs that are being discussed in the context of electricity don't necessarily call for net zero by 2035.

We've been working very closely with the industry to ensure that utilities are empowered to do planning that ensures reliability in the context of these regulations. Our position is that, as mentioned, different provinces are starting from different starting points and the policy needs to be considered as—

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

I'm going to move back to Mr. MacDougall.

You talked about Ontario. Ontario has a prospective $10-billion deficit this year provincially. Of that, $7.3 billion is a subsidy for power production for Ontario Power Generation. A $7.3-billion deficit counts as about $2,000 per household in Ontario that they don't see on their hydro bills.

Alberta is the only province where you have a transparent bill that actually shows you what the cost of hydro is.

If Ontarians had an extra $2,000 put onto their hydro bills per year, do you think you would see a little more appreciation for the cost of power across the country?

[Scott MacDougall]

That would be very impactful to people's bills, for sure. I think people would feel that.

I'm not sure what it would trigger in terms of realizations about the bigger picture of the power system.

[Greg McLean, Conservative, Calgary Centre, AB]

Can I go further here?

[The Chair, Liberal, George Chahal]

You're at time. You have three seconds.

Thank you.

We'll now go to Ms. Dabrusin for five minutes.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Thank you, Mr. Chair.

I found this whole conversation with the witnesses very interesting today. It's been very enlightening and helpful. I really appreciate the time they have given us.

I was particularly interested, though, because I heard Mr. Dreeshen talk again, as he has several times over the past, about the cost of decommissioning wind turbines and having to factor that in. Somehow the feeling is that there is no cost to decommissioning oil wells, which we, in fact, know isn't correct.

I have put this on notice, and I would like to move:

Given that:

There are 1,600 abandoned and orphaned oil wells in Alberta polluting farmland, waterways, and air;

The number of abandoned wells in Alberta are set to increase by an additional 1,800 to 2,000;

These additional abandoned wells will cost more than $200 million to clean up;

The Government of Alberta sent back $137 million because they failed to use the funds provided by the Government of Canada to clean up abandoned wells and create jobs in the pandemic;

The Government of Saskatchewan used their allocated funds in their entirety to clean abandoned wells and create jobs;

Companies who abandon wells and fail to pay for their cleanup negatively impact provincial taxpayers and municipalities;

Orphaned and abandoned wells present an economic opportunity to support energy solutions like geothermal energy.

The Standing Committee of Natural Resources begin a five-meeting study on the impact of this failure to clean these wells in Alberta, the impacts of the pollution from not cleaning up abandoned and orphaned wells, the costs of cleaning up abandoned and orphaned wells, the regulations to hold companies to account for well cleanup, and the potential opportunities associated with cleaning up abandoned wells, and report its findings to the House of Commons.

[The Chair, Liberal, George Chahal]

Thank you, Ms. Dabrusin.

We have a motion on the floor.

I'll go to the next speaker, who is Mr. Angus.

Go ahead, Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

We have a motion on the table.

[Mario Simard, Bloc, Jonquière, QC]

Perhaps we can let the witnesses go.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Can we let the witnesses leave, and we'll just finish this off?

[The Chair, Liberal, George Chahal]

I think that's prudent.

Yes, I see consent.

Thank you to the witnesses for joining us today. You can submit a brief to the clerk if there are any questions you missed or if you would like to provide some additional information. Thank you so much.

We have a motion on the floor. The witnesses are released. I'll go back to the motion.

Mr. Angus, you're next on the speaking order.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

I come from a mine-ravaged region where the damages that were done in terms of water, the damages that were done to the landscape and to human bodies, necessitated major changes. If you want to mine in Ontario, you have to have a plan to clean it up, and it's worked very well. It also has made sure that our mining industries remain very strong.

I'm always shocked that the oil industry in Alberta has been given a free pass to pollute. We see the horrific pollution in Fort Chip and the cancers there, the failure to address the huge ecological damage that's been done by abandoned wells and the fact that the federal government is supposed to pick up the tab. Ordinary citizens are being asked to pick up the tab for an industry that made $38 billion in profit in a single year and won't lift a finger to deal with these abandoned disaster zones. I think it's really important that we investigate this.

We know that money was given to the oil industry for cleanup. We've had a very questionable record of whether or not that money was spent properly. We need to have accountability. We need to have accountability from companies that are continuing to ask Canadians to bear the burden.

This summer Jasper burnt—one of our most iconic communities—what did we hear from Rich Kruger? It was that the sun was shining. Well, the sun wasn't shining on people in Jasper. The sun's not shining on people in North Carolina. The sun is shining on an industry that relies on the ability to pollute our planet and not pay, that relies on taxpayers to continually fund them when they're making record profits and they're not putting back. We have this disgrace of abandoned wells that have to be cleaned up. Once again, they're coming to the Canadian taxpayer, asking us to clean up the mess for an industry that has made staggering amounts of profit over the years.

It doesn't cut it to say, well, these are companies that no longer exist, and we don't know who they are. These are orphaned wells. That was an old tactic used by the mining industry for years. Junior mining companies or companies that were no longer profitable were getting sold off to a front company, and then the original owners of the property were walking away. However, that's no longer allowed and hasn't been allowed for decades, because we put serious rules in place to make sure that, if you are going to operate and exploit natural resources, particularly on public lands, you're going to put money into a trust to deal with that.

Unfortunately, we see that in the province of Alberta, the Alberta Energy Regulator is basically an extension of CAPP. They have been given...and able to get away with staggering levels of corporate malfeasance. Again, look at the leakage that came out of the tar sands tailings ponds that was covered up and they were not accountable for. People have gotten sick.

Certainly I would like to see someone like maybe Chief Allan Adam from Fort Chipewyan participate and give his perspective. I know it's beyond the issue of poisoned wells, but it's the issue of poisoned land.

We certainly support this. We think this is a very important study. You can count on the New Democrats to back up this motion.

Thank you.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Angus.

I'll now go to Mr. Falk.

Mr. Falk, you have the floor.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Yes, I'm really intrigued that we would have a motion at this point in the committee work, in the committee business, that we've been doing. We're in the middle of an electrical grid study. We're in the middle of a TMX study. We have a heavy workload that's incomplete, and we keep bouncing around between both of these studies. It would be nice, actually, if this committee were seized with the work that we thought was important some time ago.

We heard from witnesses today who seem to think that we have some very important issues that need to be resolved here. They contributed here, and I appreciate all of their testimony. I don't agree with all of it, but certainly I appreciate the fact that they're willing to tender their opinions here at committee and open themselves up to questions. I think it's terrific that they're doing that.

However, we're in the middle of very important studies. The Trans Mountain expansion pipeline study is something that we are trying to get to the bottom of. What exactly went so horribly wrong there with this Liberal government that they took a project that should have cost $12 billion and ended up at $34 billion?

Mr. Chair, I don't think we've seen the end. We don't have final numbers on that project yet. Now they're suggesting that they're going to put it up for sale, but nobody seems to know what that price is.

I think it is really incumbent on this committee not to get distracted with additional studies at this point, but to finish the work that we've started here. That work is looking at the TMX expansion project to see what went wrong there, why the cost is what it is and how horribly mismanaged it has been by this Liberal government. It is also finishing this electrical study that we've embarked on. I think these are two very important studies, and I would really like to see us continuing with them.

Thank you, Mr. Chair.

[The Chair, Liberal, George Chahal]

Thank you, Mr. Falk.

I'm going to go to you, Mr. McLean, but this was our last meeting for this study for today, just to let all members know. I have some comments at the end of the meeting regarding drafting instructions.

I'll go to you, Mr. McLean.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you, Mr. Chair.

It's been a while since I've been on this committee. My colleague, Ms. Dabrusin, is presenting this, and I've worked with her behind the scenes in the past to try to get her more information on the oil and gas industry. However, the data points are all off. I would request that she get more information on this data because these data points are distinctly different from the reality we're facing in Alberta.

This is a problem. You must recognize that, during COVID, the federal government intervened in order to keep people working in the oil and gas service industry, when everything in Canada shut down and people were given CERB and CEWS in order to kind of keep moving along.

In Alberta, with the oil and gas services industry, it decided to keep people moving, working and getting paid who were taking care of an environmental problem that had existed for too long a period of time. It was a good employment intervention from the federal government, and most Albertans are very thankful for that intervention and the amount it added to keeping people employed—not on some kind of CEWS but actually doing good things for the economy.

The lapse in that.... I'll speak about the Indian Resource Council here as well, because they came and they were prodding the government. They pushed and pushed to try to get the remainder of the funding, which they were being left high and dry with here, post the date, because spending a billion dollars all at once is not an easy thing to do, Mr. Chair, as I'm sure you can realize. They were trying to get that extended to make sure that indigenous workers in the oil field service environmental remediation industry were allowed that extra time to spend this money.

The answer from this government was, no, it would not spend this money. The fault lies as much in logistics and the political will of this government to extend it as it does in anything else, including with respect to our indigenous entrepreneurs.

I will say, however, as a final note—and you'll appreciate this, Mr. Chair, because you're also from Alberta—that the oil and gas industry is heavily regulated by the province. The oil and gas remediation, the orphan well program, is administered by the province. It is provincial jurisdiction. Once again, we're looking into a study here in which a committee of the House tries to step in and tell the provinces how to regulate an industry that they're doing their best to regulate strongly right now.

I will point out that Canada has amongst the most regulated industries of all the oil and gas industries in the world, because it's very environmentally friendly. Yes, it matters in this country because—and I'll tell my friend Mr. Angus—this is one of the only industries left paying taxes to fund hospitals, schools, our social welfare and the myriad of social programs put on the table by the Liberal government. If we don't have the oil and gas industry paying taxes, we will have monumental deficits, beyond the $50 billion in monumental deficits we already have.

I hope that's enough information for my colleagues to reconsider the folly of this motion. We need to move on to study things the House can actually have an impact on, and not those where it's going to pretend to tell other jurisdictions how they should do their jobs.

[The Chair, Liberal, George Chahal]

Thank you, Mr. McLean.

We have more speakers, and I know we're at time.

Mr. Simard, you are next. If we think we are going to be short today.... Otherwise, we can go to a vote. If we think we have a lengthy number of speakers, then we'll have to reconsider.

I want to give it to you, Mr. Simard, and depending on how quick you are—

[Mario Simard, Bloc, Jonquière, QC]

Unfortunately I have a commitment after the committee meeting.

If everyone agrees, we could resume our discussion at the next meeting. Everyone could speak to the issue and we could have a vote then.