Natural Resources Committee on April 6th, 2022

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

[The Chair, Liberal, John Aldag]

That ends the time we have together for this afternoon. I understand that the ministers do need to leave right about now.

We do have another panel coming in and need to suspend for that. It will take us about five minutes. The officials will stay with us and we'll bring in the Canada Energy Regulator. So, after we finish a technology test with them, we'll get back. That should give us time to do one six-minute round for each of the four parties. Then at that point, we'll go in camera for drafting instructions briefly.

We're suspended for a few minutes.

[The Chair, Liberal, John Aldag]

We are back in session for our second panel. As I noted, we will probably just do half an hour here. There's a five-minute opening statement from the Canada Energy Regulator, and then we'll do one round of six-minute questions. At that point, we'll end with our witnesses and go in camera for drafting instructions.

Depending on how quickly that goes, we could be done close to 5:30. We have the resources to continue in the room until about 5:45 or 5:50, so that's the timeline we're working with today.

With that, I'd like to welcome Ms. De Silva, Ms. Carr and Monsieur Charlebois. Regrettably, regarding Mr. Moffet from the environmental protection branch, his headset broke so he's not able to participate because of the challenges that would post for the interpreters. Then we have Mr. Hargrove here with us. Those are our witnesses, our experts, this afternoon.

With that, Ms. De Silva, I'll turn it over to you. I think you're doing the five-minute opening statement for the Canada Energy Regulator. I will start my clock.

[Gitane De Silva, Chief Executive Officer, Canada Energy Regulator]

Thank you, Mr. Chair.

Good afternoon, honourable committee members.

My name is Gitane De Silva and I am the chief executive officer of the Canada Energy Regulator. I am joined today by Jean‑Denis Charlebois, CER chief economist and Dr. Genevieve Carr, CER chief environment officer.

I want to acknowledge that I am speaking to you today from the traditional territories of the Treaty 7 people of southern Alberta, which includes the Blackfoot Confederacy, comprising the Siksika, Piikani and Kainai first nations. Treaty 7 territory also includes the Tsuut'ina First Nation and the Stoney Nakoda, including the Chiniki, Bearspaw and Wesley first nations. The city of Calgary is also home to Métis Nation of Alberta Region 3.

Thank you for the opportunity to appear before you today to discuss our work at the Canada Energy Regulator and how it relates to your discussions on our greenhouse gas emissions cap for the oil and gas sector. I am going to speak to you today about the CER, our mandate and how energy infrastructure projects under the CER's jurisdiction are assessed, as well as our energy information function.

At the CER we work to keep energy moving in Canada while enforcing some of the strictest safety and environmental standards in the world. Our mandate is derived from our enabling legislation, the Canadian Energy Regulator Act that came into effect in 2019. It provided us with a new governance structure that separated our operational and adjudicative functions. As the CEO, I am responsible for the day-to-day operations of the organization. Our board of directors provides strategic advice and direction, and the commission is independent in its adjudicative functions.

Our core responsibilities include safety and environmental oversight, energy adjudication, energy information and engagement. In everything we do, safety and environmental oversight are always at the forefront. It is the reason we exist.

As a regulator, we oversee the safe construction and operation of energy infrastructure. The CER does not develop or set government policy, including federal climate policies. Questions on these matters are best directed to my colleagues from Natural Resources Canada or Environment and Climate Change Canada.

The CER Act established the commission of the CER as a court of record responsible for making independent adjudicative decisions and recommendations on pipeline, power line and offshore renewable energy projects within Parliament's jurisdiction. In making a decision or recommendation as to whether a proposed facility is in the public interest, our commission is required to take into account a number of specified factors, including the extent to which the project hinders or contributes to Canada's ability to meet its environmental obligations and commitments in respect of climate change.

The strategic assessment of climate change and the associated draft technical guidance published by ECCC are valuable tools to support us and industry in considering projects through a climate lens.

As outlined in the commission's filing manual, the commission will look at the magnitude of a project's direct GHG emissions and proposed mitigations, associated upstream emissions, its net-zero plan, the applicability of relevant laws and policies and the project's contribution to climate change commitments, in combination with other factors determined by our legislation.

Alongside our regulatory functions, the CER plays a vital role in providing timely and relevant energy information and analysis to support the energy conversation in Canada via our energy information core responsibility. We monitor energy markets on an ongoing basis and produce a series of publications on topical energy issues, such as energy trade, energy supply and demand, as well as pipeline utilization, among a series of other topics. We also model, based on a series of different assumptions, how possible energy futures might unfold for Canadians over the long term under various scenarios in our “Canada's Energy Future” series.

Our most recent version of Energy Futures, published in December 2021, included scenarios where we explored what Canada’s electricity system might look like in a net-zero world, as well as a scenario where Canada and the rest of the world continue to take increasing actions to reduce GHG emissions.

Our modelling indicates that the evolution of Canada's energy system will depend on such key drivers as energy and climate policies, market prices and the pace of technological development.

The next iteration of “Energy Future” is slated to be released in the spring of 2023, and will be expanded to include modelling consistent with Canada's commitment to achieving net-zero emissions by 2050.

Thank you for giving me the opportunity to speak with you today about the work of the CER, and more specifically, about our role relating to GHG emissions.

I look forward to your questions.

Thank you for the opportunity to speak with you today. I look forward to your questions.

[The Chair, Liberal, John Aldag]

That was perfect timing. Thank you so much.

For anyone who has just joined us, I use the card system. The yellow card means 30 seconds left. The red card means the time is up, but don't stop mid-sentence. Just finish your thought and then we'll move on.

Our first round of six minutes starts with Mr. Maguire.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Mr. Chair.

I want to thank Ms. De Silva for her opening remarks.

Has the Canada Energy Regulator ever reviewed the safety and environmental standards in such other countries as Saudi Arabia, Iran, Venezuela, Russia, China and Iraq? If so, I'm wondering if they've actually done a review of their requirements as well, for a comparison.

[Gitane De Silva]

Thank you for the question.

We are committed to continuous improvement, so we would look to regulatory structures in other countries to see where we might improve as a regulator.

We do that domestically within Canada as well. We're a member of something called the Western Regulators Forum, for example. We work with a series of western provinces to compare our approaches and see where we can, as I said before, continue to improve as a regulator.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I just wonder if you could table with the committee any analysis that you might have, just for an update. This is the last meeting we're having, I guess, on this topic, so if we could just get that, we could peruse that as well.

[Gitane De Silva]

Certainly. We'll make note of that.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Is there maybe similar information for over the last 10 years, if the CER keeps track of this, on how much Canadian crude oil and natural gas have been transported by truck and rail? Can you break that down and provide information for us on that?

[Gitane De Silva]

We do provide regular market snapshots, monthly usually, on crude-by-rail exports. We don't regulate crude by rail, but we do track that in our energy information programs. We'd be pleased to provide the past snapshots we have, if that would be of interest to you.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Yes. I don't know if it would go back 10 years or not, but if you have that information, and by truck too maybe, that would be great. Thanks.

I'm wondering if you could table a list of energy projects that your organization has received applications from since 2015, regardless of whether they were approved or the company decided to abandon their projects. It's just so that we can get a list of those who have applied.

[Gitane De Silva]

Certainly. The applications we receive do form part of the public record. We'd be pleased to provide that information to the committee.

[Larry Maguire, Conservative, Brandon—Souris, MB]

In terms of how much time it takes for energy projects to get approved, has the CER ever reviewed where Canada's current legislation and regulations stand in comparison with other nations? We'd like an analysis of that for our perusal as well.

[Gitane De Silva]

All right. We'll make note of that request as well.

[Larry Maguire, Conservative, Brandon—Souris, MB]

I have one more here. The Canadian regulator deals with energy companies every single day. In the newly released emissions reduction plan, the government wants a 42% reduction in emissions from the oil and gas sector by 2030, as we've heard. However, there are no details explaining how the government plans on doing that.

I just wondered if you would agree that the Canadian energy sector wants predictability, and that announcing caps without details could scare away investments.

[Gitane De Silva]

As I mentioned in my opening statement, the regulator in fact is not a policy department. Questions of policy would be best directed to my colleagues at either Enercan or Environment and Climate Change Canada. If it would be of interest, we could explain how we factor in climate change analysis in our commission review, our application review process, but the questions on policy would be best directed to my colleagues at Environment and Climate Change Canada.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you. I would take your assessment of that as well, then. You just pointed out that you do that, and we would certainly like to have that information as well.

Chair, how much time do I have?

[The Chair, Liberal, John Aldag]

You have just over two minutes.

[Larry Maguire, Conservative, Brandon—Souris, MB]

My colleague had to leave, but he had a question.

On page 48 of the recently released “2030 Emissions Reduction Plan”, we read, “Modelling of the most economically efficient pathway to meeting Canada's 2030 target projects that the oil and gas sector would make a significant contribution...”.

I'm just wondering what production forecast was used in this modelling.

[Gitane De Silva]

I will defer that question to my colleague Jean-Denis Charlebois, who is our chief economist and works on our energy futures projects.

I'll pass that over to you, Monsieur Charlebois.

[Jean-Denis Charlebois, Chief Economist, Canada Energy Regulator]

Thank you, Ms. De Silva.

Mr. Chair, tif I understood the question correctly, the modelling that was just referenced was done by Environment and Climate Change Canada, I presume, as part of the development of the emissions reduction plan.

If I understood the question correctly, I think our colleagues from Environment and Climate Change Canada would be best positioned to speak to the modelling they have done to assess the contributions of the oil and gas sector to the emissions reduction.

[The Chair, Liberal, John Aldag]

I'll stop the clock.

Regrettably, the member from Environment and Climate Change broke his headset and we weren't able to get him online today, so we don't have anybody from that department.

[Gitane De Silva]

Perhaps if I could clarify, Mr. Chair—

[The Chair, Liberal, John Aldag]

Just before you do, I'll—