Natural Resources Committee on Feb. 9th, 2022

[The Chair, Liberal, John Aldag]

I call the meeting to order.

Welcome to meeting number five of the House of Commons Standing Committee on Natural Resources. Pursuant to Standing Order 108(2), the committee is continuing its study of a greenhouse gas emissions cap for the oil and gas sector. Today is our second day of eight meetings with witnesses for rthis study.

Today’s meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room or remotely using the Zoom application. Please note that the webcast will always show the person speaking, rather than the entire committee. I would like to take this opportunity to remind all participants that screenshots or taking photos of your screen is not permitted. Today’s proceedings will be televised and also made available via the House of Commons website.

Given the ongoing pandemic situation and in light of the recommendations from public health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe the following is recommended for all those attending the meeting in person.

Anyone with symptoms should participate via Zoom and not attend the meeting in person. Everyone must maintain two-metre physical distancing, whether seated or standing. Non-medical masks are required to be worn in committee rooms and may only be removed when the member is seated in their place during the meeting and is speaking. It is strongly recommended that members wear their masks at all times, including when seated. Non-medical masks are available in the room, and they provide better clarity over cloth masks with respect to our interpreters being able to hear our interventions. Everyone present must maintain proper hand hygiene by using the hand sanitizer at the room entrance. Committee rooms are cleaned before and after each meeting. To maintain this, everyone is encouraged to clean surfaces such as the desk, chair and microphone with the provided disinfectant wipes when vacating or taking a seat.

As the chair, I will be enforcing these measures for the duration of the meeting, and I thank the members in advance for their co-operation.

To ensure an orderly meeting, I would like to outline a few quick rules.

Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either THE floor, English or French. Members and witnesses may speak in the official language of their choice. For our witnesses, I would ask you when you're giving your testimony to not go too quickly to allow our interpreters to keep up.

For the members in the room, if you wish to speak, please raise your hand, and the clerk and I will do our best to keep track of the speaking order.

For the members on Zoom, please use the “raise hand” function, and you will be placed in order. As I’m sure you can all appreciate, this can be a challenge, but the clerk and I will do our best to make sure that the order of hands going up is respected and followed. Before speaking, please wait until I recognize you by name. If you are on Zoom, please click on the microphone icon to unmute yourself. For members in the room, your microphone will be controlled as usual by the proceedings and verification officer. When you are not speaking, your mike should be on mute.

I will remind you that all comments by members and witnesses should be addressed through the chair, and I would like to thank Mr. Barlow for joining us today as one of the substitutes for today's committee.

We are on the study of a greenhouse gas emissions cap for the oil and gas sector. I'm going to welcome our witnesses from the Net-Zero Advisory Body, Marie-Pierre Ippersiel and Dan Wicklum, who are co-chairs.

I would like to thank Mr. Wicklum in particular, who I understand had some technical problems on Monday but went to extraordinary efforts to get himself to a new location where the tech check was able to be successfully completed. He found the House-approved headset and is able to join us on very short notice. I really appreciate both of your accommodating our rescheduling from Monday and being here so quickly after we had the technical issues on Monday. Thank you so much.

I'm going to invite you to give your five-minute opening comments and then we'll get right into our rounds of questions and answers. We will be ending today at 2 o'clock so that everyone can join question period. With that, I will get you started.

I'll also say that we use a quick card system. A yellow card means that there are 30 seconds left. That means the time is up and you can wind up your thoughts. I'll let you know if you go too much beyond the allotted time.

Mr. Wicklum and Ms. Ippersiel, it's over to you for five minutes, please.

[Marie-Pierre Ippersiel, Co-Chair, Net-Zero Advisory Body]

Mr. Chair, Madam Vice-Chair, Mr. Vice-Chair, and distinguished members of the Standing Committee on Natural Resources, we are very pleased to have been invited as witnesses for your study on a greenhouse gas emissions cap for the oil and gas sector.

As you probably know, the Net‑Zero Advisory Body was created in 2021. The group is made up of 11 individuals from all regions of Canada, and all with diverse and established expertise in a range of fields.

Our mandate under the Net-Zero Emissions Accountability Act is to provide the Minister of Environment and Climate Change with independent advice on the most likely pathways for Canada to achieve net‑zero emissions by 2050. We will also explore the building blocks and plans for reducing emissions leading to 2050.

Last July, we released our first publication, with the title “Net‑Zero Pathways: Initial Observations”. The document identifies 10 key values and design principles that we believe should guide the development of transition pathways that are the most likely to lead Canada to achieve net-zero by 2050. By following these values and principles, Canada can not only achieve net‑zero greenhouse gas emissions by 2050, it can also create a fairer, healthier and more prosperous future for all Canadians.

It is interesting to note that, as a general rule, those whom we have met support these values and principles. They may therefore be of use to the committee in its deliberations on net‑zero issues.

[Dan Wicklum, Co-Chair, Net-Zero Advisory Body]

Thanks, Marie-Pierre.

We'd also like to flag for the committee that we organize the work along four lines of inquiry, which is the term used in our terms of reference. You can think of the lines of inquiry as our priorities. Our four priorities, or lines of inquiry, were oil and gas, transportation, buildings, and governance. The Net-Zero Advisory Body worked on these priorities throughout the past summer and fall.

As members of the committee are likely aware, in November, 2021, we also received a letter from the Minister of Environment and Climate Change and the Minister of Natural Resources, in which they jointly tasked us as an advisory body to give advice on key guiding principles that the government could use to inform their development of quantitative five-year targets for emissions reductions in the oil and gas sector.

We accepted this task considering that it aligned completely with the act that brought us into being and our terms of reference.

Also, as engagement is central to our mandate, we reached out to sector and scientific experts, to decision-makers, broadly to Canadians, business and industry, as well as to different types of other organizations and associations, including those representing workers and indigenous peoples, to inform our development of guiding principles.

During this engagement, we participated in discussions and briefings with industry leaders, labour groups, indigenous representatives and environmental experts. We received over 1,200 comments and submissions, including from provinces and territories, and we hosted seven round tables with nearly 60 participating organizations.

This engagement took place across all four of our advisory body lines of inquiry, but most submissions reflected on Canada's broader pathways to get to net zero and the implications for the energy sector, specifically the oil and gas industry. This engagement will inform our submission to the Government of Canada, which will be taken into account as the government develops its 2030 emissions reduction plan as required under the act. The Net-Zero Advisory Body is in the process of finalizing its advice for the emissions reduction plan, including guiding principles for setting quantitative emissions reduction targets.

We'd be pleased to share our final advice with members of the committee at the earliest opportunity.

Marie-Pierre and I, on behalf of the whole NZAB are pleased to have been invited to meet with you and look forward to contributing to your deliberations.

Thank you, Mr. Chair.

[The Chair, Liberal, John Aldag]

Excellent, and thank you for those opening comments.

We're going to get right into our rounds of questions and answers.

For the first round, each of the participating members will have six minutes.

First up is Ms. Michelle Rempel Garner. We'll go to you for your six minutes.

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

Thank you, Chair.

Will the proposed cap exempt new oil and gas projects now under way?

[Dan Wicklum]

That type of question is actually outside of the purview of the Net-Zero Advisory Body. Our job is to come up with key guiding principles to allow the Government of Canada to set the cap and, frankly, to determine the regulatory regime about how to administer that cap—

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

As a guiding principle, do you believe that new oil and gas projects currently under way should be exempt from the cap?

[Dan Wicklum]

We're actually not interpreting our role as getting into that level of detail. We're interpreting our role to the letter of the tasking letter, and we are interpreting our role about emissions, not about production levels or new facilities or older facilities. It's really how would the government come up with a number in terms of carbon equivalence—

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

Thank you.

Would your guidance be to exempt reserves that are proven and on company books?

[Dan Wicklum]

Again, that's a level of detail that we think is outside of our purview, and that would be up to the government to determine the specific regulatory regime about what's in and what's out. Our job is really to help them come up with a number about the cap, and a number, like what would a carbon equivalent emission level—

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

If you're not giving guidance on those things, how can we be sure that this is a cap on emissions and not production?

[Dan Wicklum]

Well, again, I think you should refer that question to the government. It's their job—

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

If this is your job, just to be clear, do you believe that this should be a cap only on emissions and not on production?

[Dan Wicklum]

Absolutely, and I think we're taking our direction from the minister on that. The minister has been quite clear that he does not see this as a cap on production. It is a cap on emissions.

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

So you've given no advice or guiding principles on the questions that I asked earlier with regard to reserves that are proven on the books or approved oil and gas projects that might not have started yet. Has there been any guidance on those things at all?

[Dan Wicklum]

That's a level of detail that really the government has to sort through. Our principles would be at a higher level than that.

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

Do you think that, in terms of principles, announcing the cap without giving guidance on those things might lead to instability for investments in the oil and gas sector?

[Dan Wicklum]

That's another question that I think you'd have to ask the investment community about, whether they consider giving preliminary guidance as policy certainty or preliminary—

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

I thought you consulted with them. Did they tell you that?

[Dan Wicklum]

We didn't get into that level of detail at all. I think—

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

That's really unfortunate.

I'll move on.

Is your guidance giving any credence or room for complementary measures like carbon capture and storage or direct air capture?

[Dan Wicklum]

Again, we don't get into the details. We're really trying to leave our guidance at the strategic level. However, I can say that we feel that carbon capture and storage is probably a very, very important technology for the world to get to net zero, let alone—

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

But that wasn't provided as part of your guidance. Do you provide any guidance on perhaps regulating, if we're proposing a cap on the oil and gas sector, and simultaneously proposing caps on other emitting sectors—like concrete, for example—in order to have equilibrium or a more cohesive approach to industrial emissions in Canada?

[Dan Wicklum]

Again, our specific task is about coming up with principles that the government uses to set targets forward for the oil and gas sector.

I can tell you, though, what we have found. It's very difficult to do that in isolation, so coming up with a target number for emissions for the oil and gas sector really needs to take into account other measures—

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

Thank you.

Did you provide any guidance on what types of substitute goods would be needed to achieve the reductions as part of your guidance for the oil and gas sector? Or let's say—