Natural Resources Committee on Feb. 7th, 2022

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

I have five seconds left.

Do you think we have adequate levels of modelling right now in Canada?

Yes, yes, yes, no, no, no.

[Colleen Collins]

No, we do not.

[Dr. Mark Jaccard]

Absolutely yes.

[Dr. Sara Hastings-Simon]

Yes.

[Colleen Collins]

No.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

That's spicy.

My time is up.

[The Chair, Liberal, John Aldag]

Thank you, everybody, for what seemed like a bit of a rapid-fire round there. I appreciate everybody jumping in as they could.

I think as we go through this, it must be hard for the interpreters and for record-keeping if we're doing thumbs-up as opposed to being using the mike somehow. Well, we'll see how we work that out.

Anyway, thank you, a good round.

We're going to go now to Mr. Maloney for six minutes of questions.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Thank you, Chair.

Ms. Rempel's right: there's a lot of information to cover here.

I'm tempted to say to the witnesses, do any of you want to expand on those yes-no answers she tried to get you to give during her six minutes, because she covered a lot of ground? Feel free to do so during the six minutes if there is more you want to add.

Professor Jaccard, I want to start with you.

I was going to start by saying the problem with this discussion any time I have it is that the enemy is greenhouse gas emissions, not the oil and gas industry, and I think that's what you were trying to get at when you said you contrasted emissions versus production. That's a narrative that has to be reinforced over and over again whenever we're having this discussion, because even at this committee sometimes we get into the polarized debate about you're after the sector.... You know where I'm going.

I appreciate you for saying that. I guess my first question would be to you, sir. Generally speaking are the policies that have been put in place in recent years reflective of that approach?

[Dr. Mark Jaccard]

Thank you for that.

Yes, they have. It's taken us a while to get there but it is to get the policies focused on the pollutant, on the greenhouse gases, and not harming a particular industry or region.

I'll just quickly say that I published a book 20 years. It did quite well. It won the Donner Prize. It was called Sustainable Fossil Fuels, and the reason I wrote that book was to get people to understand that if you care about climate, it doesn't mean that you have to be against fossil fuels.

We have tons of fossil fuels in the earth's crust—they're all over the planet—and so we need to make sure that we stop polluting whether in the production of fossil fuels or in the consumption of products made from them, like hydrogen and electricity. That's the focus of my remarks.

To me it almost seems trivial to say that, but I do know that in the dialogue across the country, the very reason I wrote that book was because people still say, oh, you're trying to hammer Alberta, Saskatchewan, Newfoundland and so on. The idea is to solve a global problem, so we have to focus on emissions, not the production.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Absolutely, and that was Ms. Rempel Garner's point, which I agree with for the record.

Does anybody else have anything to add to what Professor Jaccard said?

Ms. Collins.

[Colleen Collins]

I guess my concern is that while I do appreciate that the language is around emissions, it all depends on how the cap is set.

If the cap is set that will allow for additional production in response to oil prices due to a war in the Middle East, or in response to increasing process improvements that reduce emissions, then it's fine. However, that's the challenge. Are we actually going to talk about this policy with respect to an opportunity for increasing production when there are efficiencies available, or will the cap basically claw back any production efficiencies that reduce emissions?

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

I'm going to assume, and Professor Jaccard can correct me if I'm wrong, that what he meant when he started making his second point on policy was that you have to adjust the sector targets to maintain a competitive nature for the oil and gas sector. I think that's what he was getting at, because the last thing we want to do is to hurt the sector by having hard and fast rules that are going to do exactly what Ms. Collins just said.

Professor Jaccard, am I right about that?

[Dr. Mark Jaccard]

Yes, but at the same time, Ms. Collins, I would just emphasize that it could be that production over the next 20 or 30 years goes down, because for humanity we need that to happen, and we're pretty high-cost producers. You wouldn't want to delude people in a region and say, hey, let's just keep increasing production, because then you're just building a house of cards, which is what we partly did over the last couple of decades, so you want to be careful about that.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Fair enough.

[Colleen Collins]

That's where the Alberta policy set that direction, and you now have the six oil sands producers with their pathways to net-zero programs. Because it was very targeted, it had a positive impact and got that part of the sector on board.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

It's an expensive pathway.

There have to be different levels of government working together and all striving to do this the same way, at the same speed and at the same time. I don't think we see that right now, frankly. I honestly believe that everybody on this committee wants the same thing. We're just taking different routes and going at different speeds to get there.

Do you have recommendations? Let me back up. What is your view on provincial versus federal regulations right now, which are trying to achieve what we're trying to achieve in working toward these targets?

I'll start with Dr. Jaccard.

[Dr. Mark Jaccard]

Humanity is way too slow in getting global greenhouse gas emissions down. First, wealthier countries need to be going fast like us, and then we also need to be using trade measures to make sure that other countries around the world are acting and following that.

The policies we need, I really argue, should be at a federal level, and they should be focused on emissions. That was my first point, so I will stick with that point. We're so much closer to that than we were 10 to 20 years ago, so I'm quite encouraged.

I'll stop there.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

I think we all have to stop there, because I'm out of time.

Thank you very much.

[The Chair, Liberal, John Aldag]

We'll now go to Monsieur Simard, for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I want to thank the witnesses.

I'd like to start by asking Mr. Jaccard and Ms. Collins a question.

I must say that I was a little confused by your comments. I'm having some trouble understanding how we can reduce emissions without capping production. I want to understand your reasoning better.

In your view, when we say that we must reduce emissions from the oil and gas sector, it means that we must reduce emissions from producers. However, the gas and oil that they produce will be consumed afterwards, whether for transportation or for industrial processes, and that too will create GHGs. Without a cap on production, I don't see how we can reduce greenhouse gases.

Am I making sense or am I off the mark?

[Dr. Mark Jaccard]

Indeed, the producers must reduce their emissions. They have the technology to do so, even if they produce oil products for consumption in Canada or for export.

In Canada, we have policies such as the carbon tax and regulations for cars and oil to reduce emissions from domestic consumption to zero. When it comes to exports, however, the emissions produced by the consumption of gas and diesel from Canada fall under the responsibility of the countries to which these products are exported. That's what the Intergovernmental Panel on Climate Change says, and that's fine. It's better that way. It should be noted that, in these countries—

[Mario Simard, Bloc, Jonquière, QC]

I understand. We can be irresponsible, because we aren't the ones burning the oil. Nevertheless, I understand the logic.

I want to quickly hear from Ms. Collins on this topic.

[Colleen Collins]

You can't just focus on production without focusing on consumption. We have a set of policies that address consumption. Production doesn't just go to producing gasoline. For example, there's been a challenge in British Columbia. British Columbia introduced an emissions cap, and the debate has begun. How can B.C. expand its LNG production and exports if that production causes the province to exceed its cap?

Since the time that initial policy was introduced, we've seen LNG production in B.C. declining very rapidly in terms of its GHG intensity. That LNG, despite the fact that China has installed more renewables in the last five years than the rest of the world combined, has—

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Ms. Collins. Sorry to interrupt you. I don't mean to be rude, but I don't have much time.

You spoke about technology to reduce the carbon footprint of the oil and gas sector. Everything I've seen about carbon capture strategies indicates that they're possible as long as the sector has government support.

I'm not an economist. However, I know that, in economics, the first principle is competitiveness and profitability. In my view, a low‑carbon oil and gas sector is neither profitable nor competitive, so it needs government support. The proof lies in the two major carbon sequestration projects worth $2.5 billion, 57% of which comes from either the Alberta or Canadian governments.

This means that the decarbonization of the oil and gas sector will be accomplished through a massive investment of public funds.

Do you agree?

[Dr. Mark Jaccard]

The issue is that this constitutes a global objective. The logic that you just explained applies equally to the aluminum or cement sector, for example. Basically, all sectors engaged in international trade must receive support in order to reduce their emissions, because this affects the cost of production.