Natural Resources Committee on Feb. 9th, 2022

[The Chair, Liberal, John Aldag]

Thank you.

We're going to go to Mr. Maguire, who will have five minutes for his round of questions.

Mr. Maguire, it's over to you.

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

Thanks, Mr. Chair.

Thanks to all the witnesses for your testimony before this committee.

I've been a big proponent of trying to put incentives in place, if you would, to be able to develop the technology that would help reduce greenhouse gas emissions around the world, not just right here in Canada, so I'm very pleased to hear your presentation today, Mr. McMillan, in regard to the impacts of the high emissions in other areas of the world. I believe that for our 1.6% we should do everything we can to get it to zero as well.

Can you expand on your comments? If we do the very best thing that we can do in our own zone here and reduce it, if we cut it in half, say, to 0.8% or something like that, are we in fact not allowing other areas of the world to fill in the gap? You're saying that they may do it with coal and they may do it with high-carbon energy as opposed to the low-carbon energy that we have.

[Tim McMillan]

I guess I'm reflecting on what we're seeing happen today, in that today we're seeing coal-fired power plants coming back online in Europe and new ones being built in Asia. I think that to get to our ultimate goals, which is the 1.5°C or less, it's going to take all of the tools that we have, including the ones we work on today that won't be ready for implementation for 5, 10, 15 or 20 years from now.

I think we need to take an approach that is all-inclusive, utilizing the best technology and resources we have today, and work like heck to make sure that we have good answers in the years ahead.

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

Thanks.

I don't know if anyone else wants to chime in on that or not.

Mr. Goodman, would you have a comment on the technology side of it as well?

[Tristan Goodman]

Yes. I have a couple of comments.

First, we all recognize that we have a serious problem before us here, and the reality is that we are making progress. There are quite a few positives. First, we are seeing the emergence of this clean-tech sector. Many of the members that we're representing are actually invested in that and are producing some positive results. There is also another benefit, in that as you move forward and you reduce, people are recognizing that there are products that are moving down, and they're actually willing, in some cases, to pay an additional premium for those products. That actually gives Canada a potential competitive advantage.

It is about how fast and where you put your resources into this, recognizing that this is a global problem, not just a domestic problem. There is a commitment here, but we have to find ways to fit into that broader global problem.

Thank you.

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

We export wheat around the world so we can provide people with better food, and I get where you're coming from on the energy sector as well. I was in Taiwan a few years ago and they said they would buy all the liquid natural gas we could sell them if we could just get our act together to get it to them.

Ms. Pierce, you indicated that you've made a lot of technological changes at Shell over the years. I know the companies have. Could you just outline one or two of those for me?

[Susannah Pierce]

Maybe I could just comment on the important relationship we have with customers, which drives demand. I don't think that's really been identified as well as it needs to be, because we can produce cleaner energy. I'll give hydrogen as an example. In Vancouver we've had two hydrogen refuelling stations for years. The challenge we have is that nobody is driving hydrogen cars and that the trucks that consume the hydrogen are not yet economical for the truckers.

For us to produce the cleaner energy, with or without subsidy or any kind of government incentive, we need to have that relationship with customers. That then incentivizes us to make the investment so that they can in fact take that energy, which would produce lower emissions.

Technology can be driven by customer demand, and as I mentioned we're in this unique place today because our customers have made net-zero commitments, which then helps us to meet those commitments with lower-carbon energy.

Technology also today is not economical simply because it's not yet at scale. It hasn't been thoroughly commercialized. If we want to accelerate it, because it's necessary to meet our climate commitments, there is a role for government to help us do that through regulation and through incentives, because in and of itself, it won't happen in the time that we need it to. I think carbon capture and sequestration is an example of that. It is a technology that works, and it is a technology that every credible climate report recognizes as being critical to meeting our net-zero targets.

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

Ms. Pierce, I'll also ask you a further and similar question to what I just asked the others.

[The Chair, Liberal, John Aldag]

I'm sorry, but that's the end of the time, so you might have to wait for the next go-round. The five minutes goes quickly. My apologies.

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

Okay.

[The Chair, Liberal, John Aldag]

I'm sorry, Mr. Scholz, that we didn't get to you. I saw your hand up.

We're going to jump right to Ms. Lapointe for five minutes.

Go ahead, please.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

We heard earlier today from the Net-Zero Advisory Body. They said that globally we have lost the opportunity for an emissions-reduction paradigm by failing to act, and now we're forced to shift to an emissions-elimination paradigm.

The Net-Zero Advisory Body went on to say that this means a change in the onus on leadership, that this no longer requires just one federal department but every federal agency, every province and territory, every municipal government and especially the private sector to act. From what I understand and from what the advisory body is saying, the question is no longer what the government can do but rather what everyone can do, especially the private sector.

My question is for both Ms. Pierce and Madame Brouillette.

In applying this testimony to the oil and gas emissions cap program, where can we look outside of the government to partner efforts to help this program's success in reducing emissions?

This is for Ms. Pierce first and then Madame Brouillette.

[Susannah Pierce]

Thank you.

Again, I think we do have a role in the private sector to work with customers within a given sector to see what it would take for them to consume lower-carbon energy and what those pathways are.

For sustainable aviation fuel, for example, if airlines have the aircraft that can take 100% sustainable aviation fuel and if we can create the technologies and build them at scale to produce it and meet their demands, then we at least have those two end points from the production to the consumption to work between. The cost of that and the transmission of that fuel from where it is produced, what the inputs into that are and how it's consumed need to be managed as part of that pathway.

As the private sector working with a non-private sector, or the public sector and non-profit sector, we can convene sectors with which we can discuss the pathways through which we can look at the opportunities and the constraints to help us meet climate targets.

We are in a stage of reducing, and in order to eliminate we need to reduce. The fastest way to shut emissions down is to shut down the economy, and we don't want to do that. We do have to have pathways to reductions that manage and mine how energy is being consumed and what type of energy is being consumed today so that we don't strand people, so that we can meet demands, and so that we don't see prices....

Thank you.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

Madame Brouillette.

[Caroline Brouillette]

Thank you for your question.

Actually, I'm going to take this opportunity to put some things that have been said in the proper perspective.

First, I feel it's important to note that emissions from the oil and gas sector have gone up 87% since 1990. So we've reached the point where the government needs to step in.

Despite what some of the other witnesses today believe, if we want to avoid a climate disaster and a temperature increase of more than 1.5 degrees Celsius, we need to ask ourselves how Canada can lower demand if we want to avoid a climate catastrophe. In its carbon neutrality report, the International Energy Agency says we've already hit the ceiling for global oil demand and will hit the ceiling for gas about halfway through this decade.

Every country thinks it will be the last to produce what's left of oil and gas. However, the fact is that Canada is a huge polluter in terms of carbon intensity, and it's also extremely expensive to produce oil and gas.

This emissions cap is an opportunity for us to gradually transition our economy and diversify to sectors that are globally competitive right now, making workers and communities the primary concern in the transition, because it's already happening.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Ms. Brouillette.

My next question is for both of you again.

I want to ask my next question of both of you, and I'll need a quick response again.

One thing that I've noticed is that the necessity of having a net-zero economy by 2050 is unanimously recognized across science, government and industry. Conversely, the how, or the path to get to this goal is anything but unanimous.

A declining emissions cap is a significant action in the right direction.

What would be your top recommendation, the one thing you see as non-negotiable, on the pathway of placing a declining cap on the oil and gas emissions?

I'd like to hear from you first, Ms. Brouillette.

[Caroline Brouillette]

For Climate Action Network Canada, it's crucial that this policy be accompanied by a just transition and that workers and communities be the first to benefit from the transition.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

I've run out of time.

[The Chair, Liberal, John Aldag]

Unfortunately, we're going to have to wind that up.

We're going to go over to Mr. Simard. He'll have two and a half minutes for his round of questions.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Ms. Brouillette, thank you for your remarks, which put some information that may have been wrong into perspective. Well, we can debate it.

You know, when we talk about the extent to which the oil and gas industry should be held responsible, we're often made to reflect the impact that it can have on workers.

You talked earlier about a just transition. Can you say a few words about the implications of the transition for workers in the energy sector?

[Caroline Brouillette]

Thank you for that important question.

In the past, I feel that Canada has often ridden the wave of natural resource booms, and unfortunately we've not planned for the inevitable collapses that follow. Just look at the forestry industry in British Columbia, commercial saltwater fishing in the Atlantic, or asbestos in Quebec. These are but a few examples of sectors whose once thriving resources have eventually been depleted, and where we have left local communities struggling with the resulting economic dislocation.

Oil and gas workers are definitely threatened by the energy transition. The transition can't be avoided in the global context, and also a growing number of jobs are being automated in the sector.

Rather than reacting to this transformation, we have an opportunity today to discuss it, to make a plan, and to make workers the central focus of that plan. A just transition bill is being drafted. It's important that this be done in conjunction with the oil and gas industry reducing its emissions.

[Mario Simard, Bloc, Jonquière, QC]

I know the rationale tells us we shouldn't cap production, we should cap emissions.

I'd like you to talk about that briefly, Ms. Brouillette. I know I really don't have much time left

[Caroline Brouillette]

Internationally, it's very clear that the amount of oil and gas companies plan to produce isn't going to keep temperatures from rising more than 1.5 degrees Celsius.

If we're really serious about reducing emissions, we need to put a cap on them. We also have to stop developing resources in Canada.

[The Chair, Liberal, John Aldag]

Thank you.

Mr. Angus, we'll jump right to you for your two and a half minutes.

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

Thank you and thanks, everyone.

This is a fascinating discussion.

Madame Brouillette, if I heard correctly today from our friends in the oil sector, it's not that they're looking at a cap. They're looking to increase production into the global south where none of what happens is counted as emissions.

Does it make sense for the planet that we can sell an extra million barrels a day, coming out of TMX, export it to China or India, and whatever happens elsewhere is not going to affect us? Does that, in any way, seem credible?