Natural Resources Committee on Feb. 9th, 2022

[Tim McMillan]

Thank you for the question. I appreciate that global perspective, because this truly is a global marketplace.

We are seeing, as everyone is, that wind and solar are becoming more cost-effective. The IEA expects them to continue to grow to about 6% of global primary energy demand by 2040, so they are going to expand their role. Nuclear is something that people are always looking at into the future, even though it's tough to get them off the ground at any given time.

We're seeing a substantial sea change in how they move traditional energy with LNG. LNG was a relatively minor product a decade ago. Today, it's meaningful, and a decade from now, it'll be even more so.

The unfortunate answer to your question, though, is where there are constraints and where oil and gas are not readily available, it is coal. It has been a very difficult fuel to dislodge. Natural gas has done a good job of it in a few countries, such as Canada, the U.S. and Europe, but in the developing world, it is an incredibly durable fuel and hard to displace.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

That seems to be the evidence that I've seen as well. Many countries that have looked for reliable and cost-effective forms of energy have turned to coal. We see that in Europe and Asia, as some of you testified earlier.

I guess the next question is, if oil and gas continue to also be part of that mix and if Canada cannot supply the growing demand.... We know that the world continues to be hungry for energy—if not Canada—and we've referenced the fact that it's going to come from other places.

Let's go into that. What are we talking about when we're talking about....? Even the general population doesn't know what we're talking about when we say “OPEC”. They don't know what we're talking about in terms of alternative sources of oil and gas.

[Tim McMillan]

When you look at the global top 10 producers of oil and gas, it is a group that Canada and the U.S. are part of, but beyond those two democratic nations, it is Russia, Saudi Arabia, Nigeria, Iran, Iraq and Venezuela, and Norway no longer even reaches the top 10, nor does the U.K., the North Sea.

When you look at where that major supply comes from, Canada and the U.S. are the most democratic members. After that, it gets to regimes that don't share the values of most Canadians.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

If we're looking purely to test the concerns about the environment, let's set aside the human rights records and the governance records of those countries and look at their environmental records. What are we looking by way of comparison?

Unfortunately, we're an importer of oil and gas. The U.S. is, for certain. Let's look at the other countries.

[Tim McMillan]

It's truly across the board. The difference with a country like Venezuela is their very high emissions profile for their production. A country like Saudi Arabia has a relatively low profile—we think—for a lot of their production, although Saudi Arabia has a heavy oil that they export as well. It truly is across the board.

When you look at a country like Russia.... We have done so much work on venting and flaring. We have our methane emissions down to minuscule amounts. The rest of those countries probably aren't even monitoring them. They don't have the regulatory structure that we have. It is something where our expertise truly could be helpful, and we probably need to continue to push what we know broadly.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

This, I guess, is my concern. If we, here in Canada—

[The Chair, Liberal, John Aldag]

I'm sorry. We're out of time, Mr. Warkentin.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

I apologize. Thank you.

[The Chair, Liberal, John Aldag]

It goes quickly. I just want to make sure we get through the last three.

We're going to jump to Mr. Maloney, who has five minutes. Then we'll finish up with Monsieur Simard and Mr. Angus for two and a half minutes each.

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

Thank you, Mr. Chair. I'll try to be quick.

Mr. McMillan, I'm going to start with you. Thank you for being here. It's always good to see you. I have a straightforward question to start out with—at least I think it is.

I am not clear. Are you in favour of a cap or not?

[Tim McMillan]

No. I think we would like to know what the government's intent is with the cap. At this point, our intent is to work to have an efficient regulatory system that lowers emissions and puts the right incentives to drive investment and emission reductions.

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

I get that, but you didn't answer my question.

The answer is no. Is that fair?

[Tim McMillan]

Again, I won't give you a blanket answer until I know the depth behind what's intended with this cap.

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

Okay, so based on that answer, I will interpret it as meaning that there is a scenario in which you could live with there being a cap. It's just not the current environment. Is that fair?

[Tim McMillan]

If it enables Canada to play a role in lowering global emissions, then I think that scenario would be broadly supported.

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

Okay, so let's talk about that for a second.

You mentioned earlier that Canada can play a large global role in technology and that responsibly produced Canadian energy can play a role internationally, but you keep going back to coal. Wouldn't you agree with me that nuclear energy has played a big role in that scenario as well?

[Tim McMillan]

I think it would be great if nuclear played a larger role. It's obviously not in my mandate, but if it can take a bigger toehold, it certainly meets some of the criteria we're looking for.

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

Great. We can agree on that.

I live in Ontario. The reason we don't have smog days in Toronto any more is because of nuclear energy, not because of wind or solar, and we got off coal only because of our ability to transfer to nuclear energy. There's all kinds of nuclear power that's being developed now, which can do exactly what you're doing.

My point is simply that I don't think it's fair to characterize a cap leading to coal, because there are other alternatives. Would you agree with that?

[Tim McMillan]

I guess it comes down to the time frame. I would say there's no silver bullet. Coal is going to be part of it, but I think displacing coal with natural gas is probably the most immediate thing we could do.

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

Mr. McMillan, I understand who you represent, and I want to say thank you to your entire industry because without you, our economy would be in very difficult shape. As we discussed earlier today, the enemy is emissions and not production. I want you to understand where I'm coming from. In fact, I think you knew that already.

[Tim McMillan]

Absolutely.

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

Now I'm going to go over to Mr. Goodman.

Mr. Goodman, thank you for your six points. Picking up on what Mr. McMillan was saying, your first point was to use existing climate policy frameworks. I'm not quite sure what you mean by this. Does that mean to stay where we are and not add any new layers of policy that will complicate things? Is that what you're trying to say?

[Tristan Goodman]

No, that's actually not what I'm trying to say. The reality is that you may need to introduce new policy. A democratically elected government obviously has every right to do that, and we'll work with whatever policy is put in place.

What I'm trying to get at there is that there are some existing frameworks. Probably the biggest one here is.... Well, there are two—methane and carbon pricing—which are being absorbed within our industry, and they're being absorbed by other industries and Canadians. We see how to work within that framework.

There are some constructive positives there that we can look to, and where we can build on that under those existing policies, that's useful.

What we're looking for is what happens, for example, to an emerging clean tech industry that many of our members are involved in and investing in? Does that get negatively impacted in any way? I'm not suggesting it does, but you would want to know that.

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

Fair enough. Thank you.

I will take it, then, that you will agree with what Ms. Pierce said earlier. She's supportive of the fuel charge, the clean fuel standard and the output-based charges that are in place now.

[Tristan Goodman]

I'm always cautious to agree with Ms. Pierce, but the reality is that, yes, we generally would agree with that.