That's great. Thank you so much.
We have a busy night, so I'll get started right away.
Thanks for the opportunity, Mr. Chair. It's great to see all members.
By way of background, the Canadian Gas Association represents the delivery side of the natural gas industry in Canada. Our members have nearly 600,000 kilometres of infrastructure that delivers 40% of Canada's energy needs to about 25 million Canadians.
I'll centre my remarks on three issues.
First is whether we can compete with the United States on clean energy.
Second is the scope and implementation of proposed investment tax credits.
Third is an assessment of Canada's clean energy pathways.
To my first point, can Canada position itself to compete with the U.S. in the race for clean energy capital?
The answer is yes, but as a nation we have work to do. We believe Canada remains at a disadvantage due to our current framework for energy project evaluation. As a nation, we should be laser-focused on determining how we can improve our agility and our responsiveness to advancing all clean energy projects. This is a complex issue; however, it is not insurmountable. For example, the United States Fiscal Responsibility Act has set a two-year environmental review time frame for all projects. Further, the act requires that all environmental impact statements be no longer than 150 pages. Therefore, we recommend Canada undertake a review of its energy project approvals process with the goal in mind of two years or less for all projects.
On the second point, regarding the scope of ITCs, or investment tax credits, we support having ITCs. That opens the door for industry to demonstrate leadership and to pick projects that work best for them. Further, they offer a more expedited approach when compared to traditional application-based funding programs.
We offer the following in terms of the current regime on ITCs. First, on hydrogen, we include a reference to the scope of the ITC. We wish to have methane pyrolysis included in the scope of the proposed hydrogen ITC. Methane pyrolysis can leverage one of Canada's key strategic energy assets, natural gas.
Second, with respect to the need for a biofuel investment tax credit, there currently is none. We are recommending one. Specifically, for us that means the inclusion of renewable natural gas in a proposed biofuels investment tax credit.
Third, and perhaps most importantly, we must finalize these investment tax credits. We need to bring forward the legislation to solidify them and to give market participants the confidence they need to undertake the project investments they have. Therefore, we recommend that Canada introduce hydrogen and biofuel ITC legislation in or before budget 2024 and give it priority in the fall economic statement of this year.
The third area I'll speak to is Canada's clean energy pathways. Over the last 18 months many jurisdictions in Canada have been public about looming or existing electricity supply shortages or challenges with supply chain issues. This situation is very different from the one we were in just five years ago when power supply was abundant and forecasted to remain that way. This historic abundance led to forecasts and policies aimed at leveraging ever-increasing supplies of electricity. This is changing fast, however. In contrast, Canada produced and consumed record volumes of natural gas, hydrogen and renewable natural gas in 2022, and 2023 looks to be on par for another record year.
Add all of this to the changing geopolitical realities, rising interest rates and affordability issues, and we're left asking questions about our direction on clean energy: Are the assumptions made five years ago still valid today? Do we have all the supply of power that we thought we would need to do what we wanted to do? Can we better leverage other resources, such as natural gas and exports of LNG to our allies?
These important questions deserve thoughtful assessment. We recommend that industry and government develop a clean energy pathways report that examines the costs and feasibility of various low-emissions pathways under today's market realities, including gas, liquids and electricity.
In summary, Canada is a nation blessed with vast energy resources that are the envy of the world. Let's continue to collectively raise the bar on how we produce, deliver, export and use the energy sources we have.
Thank you very much.