Natural Resources Committee on Feb. 16th, 2022

[The Chair, Liberal, John Aldag]

I call the meeting to order.

Good afternoon, everyone. My apologies for the late start today. We had a vote. I appreciate the witnesses standing by.

I'll go through some of the required preambulatory items. Then we will get right into the meeting as quickly as possible.

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

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

On health and safety, I think everyone has heard the requirements. If you have any questions, come and see me during opening statements. We will move right through that part.

For the witnesses and members, there are a few rules to follow. Interpretation services are available for those joining us online. You have the choice at the bottom of your screen of using floor, English or French. Members and witnesses may speak in the official language of their choice. For those in the room, raise your hand. We will try to keep track of it online. If you have something to say, raise your hand using the Zoom function.

Wait until I recognize you by name before speaking. On Zoom, please unmute your mike yourself. Within the room, the team here will look after you. When you're not speaking, your mike should be on mute. All comments by members and witnesses should be addressed through the chair.

Today for our study of the greenhouse gas emissions cap for the oil and gas sector we have a few witnesses.

As individuals, we have Angela Carter, an associate professor at the University of Waterloo, and Bruno Detuncq, a retired professor from École Polytechnique de Montréal.

From the Alberta Federation of Labour, we have Gil McGowan, president.

From First Nations Major Projects Coalition, we have Chief Sharleen Gale, chair of the board of directors. I believe Sharleen needs to leave at 5 o'clock today. Mark Podlasly, the director of economic policy, is able to be here for the duration of the meeting.

Regrettably, for our next witness, Dale Swampy from the National Coalition of Chiefs, we were not able to get his technology at his home working today. We tried several times. We are working to find an alternate location for him to participate in the future. We will do our best to have him at a future panel.

From Student Energy, we have Meredith Adler, executive director.

Although we have a late start, we have lost one of our witnesses, and another needs to leave at 5 o'clock. My hope is to see if we can get through as many of the questions as possible, if we're nice and tight with our time, to end at 5:30 p.m. I'm happy to revisit that when we're at the 5:30 p.m. time slot. Otherwise, I'm ready to get right into it.

Mr. Morrice, welcome. You have been a reliable participant here. It's good to see you again.

Witnesses, we will be using a card system. A yellow card means you have 30 seconds left and a red card means your time is up. When you can't see the card anymore, please wrap up your thoughts and stop talking. We have lots to cover today and lots of discussions.

With that, let's go first of all to Ms. Carter.

I will give you five minutes.

[Dr. Angela Carter, Associate Professor, University of Waterloo, As an Individual]

Thank you, Mr. Chair and members of the committee, for the invitation.

I'm speaking with you from the province of Newfoundland and Labrador. I am on the island of Newfoundland, which is the unceded traditional territory of the Beothuk and the Mi'kmaq people.

My province has become heavily economically dependent on oil production over the last 20 years. This was after tremendous upheaval from the collapse of the cod fishery. Today, as you know, we face great economic distress.

I want to give you a sense of my perspective before we get in, because I think perspectives matter for the information that's coming forward.

I'm from a working-class family. All the men in my immediate family have worked directly in oil as tradespeople in Alberta and Newfoundland and Labrador. Today I am a university researcher. That means I have the privilege of choosing my research areas freely and independently. I'm not paid to deliver a particular message, but rather to conduct research based on evidence.

Regarding the Prime Minister’s promise to cap oil and gas emissions today and ensure that they decrease tomorrow to reach that net zero by 2050, I have two points to make.

The first is on structuring that cap and cut. This is urgently important. As the Intergovernmental Panel on Climate Change signalled this summer, the intensifying climate crisis is a “code red for humanity”. Humans' emissions are causing all of the things we've grown to find really distressing, like heat waves, droughts, wildfires, floods, extreme storms and so on. This is just a pre-show because emissions and temperature continue to rise.

The key point is that the vast majority of emissions causing the climate crisis are from oil, gas and coal. In fact, that sector was responsible for 86% of global emissions over the last decade.

That climate and fossil fuel problem is really clear in Canada. As you’ve heard, the oil and gas sector is the largest and fastest-growing source of emissions in the country. It is outpacing ambitious efforts to reduce emissions in other sectors. It's the primary reason why we haven't hit one of our climate targets in 30 years.

The cap is one way to ensure the oil and gas sector does its part, but to be effective and credible it has to start soon—by 2023. We need to cap emissions at 2019 levels and then ratchet them down every year, ideally faster in the first years in order to front-load.

At a minimum, to meet the federal government's targets of a 45% reduction from 2005 levels, that signals about an 88 megatonne cap by 2030. More should be expected of the oil and gas sector, given the sector's out-sized contribution to emissions and also given that Canada is expected to strengthen its climate commitments over time.

The Climate Action Network Canada’s analysis gives us a much lower cap of about 64 megatonnes by 2030. This cap has to be a hard cap and not based on the emissions-intensity, but on absolute emissions. It has to cover all of them, from fugitive emissions, production, upgrading, refining to orphaned wells—the whole cycle—with enforcement that's significant enough to deter non-compliance and without financial support or subsidies.

Importantly, and I look forward to hearing what Mr. McGowan has to say about this, it has to be integrated within just transition policies to ensure that oil-dependent workers and communities, particularly indigenous communities, don't experience hardship because of the cap.

My second point is about an extension of the cap. It's about skating to where that climate policy puck is going. More is needed than a cap on emissions because it doesn't address the elephant in the room, which is production. The global community has a carbon budget to keep within that 1.5° warming limit. That translates into fossil fuel production limits.

By updated analysis, to have just a 50% chance of keeping warming to 1.5°, global oil and gas production has to decline 4% a year every year until 2050. Based on the International Energy Agency's “Net Zero by 2050” report, which just came out recently, this means there can be be no further exploration nor expansion of production of fossil fuels.

This reality is reshaping global climate policy. We're seeing this now in rising national bans on fossil fuel extraction, the fossil fuel non-proliferation treaty and the Beyond Oil and Gas Alliance, of which Quebec is a joining signatory.

Yet the Canada Energy Regulator is anticipating increasing production. Canada is going in the wrong direction at full speed. This is a climate problem, but it's also a missed opportunity for workers and communities who would gain from a low-carbon transition or be put at risk by not implementing that transition.

I look forward to the chance to really dig into this with you folks further over the next hour and a half.

Thank you again.

[The Chair, Liberal, John Aldag]

That was excellent time. It was just under the five-minute mark. I really appreciate that.

I should have mentioned for our witnesses that because we have simultaneous translation going on, try not to go too quickly through it. The speed of the comments we just heard was very appropriate and good.

Also, when we get into the interactions, if we are talking over each other, which sometimes happens, the interpreters obviously can't interpret both conversations. We usually give the benefit of the doubt to the members who are pursuing their lines of questioning. If you've been talking as a witness and then one of the members steps in, we would just encourage you to kind of stop, so that the member can then redirect the conversation. They're not trying to be rude. I'm getting to know this crew; it's a very congenial group. It just makes the job easier for the witnesses.

We're going now to Mr. Detuncq for five minutes.

[Bruno Detuncq, Retired Professor, École Polytechnique de Montréal, As an Individual]

Thank you, Mr. Chair.

Ladies and gentlemen, thank you for the invitation to have a dialogue between citizens and elected officials on a critical issue for the future.

I am going to start with two highlights.

First, if the largest sector in terms of greenhouse gas, or GHG, emissions does not do its part, it will be impossible to reach the carbon neutrality target.

Second, renewable energy pathways, energy efficiency in all sectors and energy sobriety are the way forward for a sustainable future.

I will now paint you a picture of the global situation. Since 1990, climate change has accelerated, GHG emissions have not stopped growing and the concentration of atmospheric CO2 has risen from 350 ppm in 1990 to 420 ppm today. This increase is largely due to the use of fossil fuels.

Planet Earth has biophysical limits that are essential to know and respect. A global and long-term vision is necessary. Many people use the International Energy Agency, or IEA, report from last year as a reference to argue that certain scenarios would allow for the production of even more hydrocarbons, but it should be noted that the IEA is not a climate specialist, and on the other hand, choosing a scenario that suits short-term economic interests is like looking at the sky with a microscope.

A serious analysis must be based on the Intergovernmental Panel on Climate Change, or IPCC, 2019 interim report and on the first part of the IPCC's sixth report published last August. Here I remind you of three key findings: Human influence is the primary cause of climate warming; the current trajectory of emissions is leading us towards a probable temperature increase of about 2.6 degrees Celsius; and reducing GHG emissions is a critical imperative.

With respect to the situation in Canada, GHG emissions in 2019 were 730 megatons of CO2 equivalent, an increase of over 21% since 1990. In 2019, the oil and gas sector emitted 191 megatons, or 26% of total emissions. It is the largest emissions sector in the country. The increase in GHG emissions from this sector between 1990 and 2019 was around 87%. According to the report entitled “Canada's 2021 Nationally Determined Contribution Under the Paris Agreement”, the country must reduce its emissions by 40% to 45% below the 2005 level by 2030.

In the Canada Energy Regulators report published last year, it says on page 12 that crude oil production will peak “at 5.8 million barrels per day (MMb/d) in 2032... After 2032, production declines steadily, reaching 4.8 MMb/d in 2050.” It is a similar path for natural gas production. However, the report states on page 4 that “while this implies a significant reduction in GHG emissions by 2050, achieving net-zero will likely require more change than is included in this scenario.”

Canada's oil and gas production exports penalize all of humanity. Responsibility is not a matter of geography, but of behaviour. It is therefore essential to quickly cap hydrocarbon production and to impose a planned decrease so that all actors can agree on a scenario that is consistent with climate realities. In this way, indigenous communities, workers, companies and the various levels of government will be able to adjust to an inevitable evolution. There are only 28 years left before 2050.

An important criterion to consider for any energy project development is the evaluation of the energy return on investment (EROI). Producing hydrogen from natural gas or oil sands and sequestering CO2 underground is an energy aberration. It is also an economic one. The primary goal is to continue to extract hydrocarbons. Burying CO2 is a false solution similar to burying nuclear waste. It sees the subsoil as a garbage can that future generations will have to deal with.

Thank you for your attention.

[The Chair, Liberal, John Aldag]

Thank you for those opening comments.

Mr. McGowan, we'll now go to you for your five minutes. The floor is yours.

[Gil McGowan, President, Alberta Federation of Labour]

Thanks, Mr. Chair, and members of the committee.

You've asked me to weigh in on the subject of an emissions cap for Canada's oil and gas sector. I'm not here to dissuade anyone from acting on this commitment, but rather to urge you to proceed carefully to make sure you consult with workers in the sector and to communicate clearly with those workers throughout the process.

Some may find it surprising that a labour leader from Alberta is not automatically opposed to an emissions cap on oil and gas. You shouldn't be, and I say that for two reasons. First, Alberta workers, including the majority of workers in the oil and gas sector, accept both the science of climate change and the need for policies to reduce emissions. Climate change is real, it's serious, and Canada needs to do its part.

Second, we here in Alberta, have experience with emissions caps and that experience tells us that they can actually be helpful to the oil and gas industry. This may seem a little counterintuitive, so let me elaborate. In 2015, when the previous Alberta government introduced its climate leadership plan, it included a 100 megatonne cap on emissions from the oil sands. Lots of people know about this, but what you may not know is that Canada's major oil sands producers actually asked for the cap. It wasn’t in the original plan. Companies like Suncor, Cenovus and CNRL asked for it to be added.

Why would they do such a thing? They could see the writing on the wall. Even at that time, eight years ago, global investors were starting to feel leery about fossil fuels. Canadian oil sands companies were worried about becoming global investment pariahs, so they embraced the policies contained in the climate leadership plan, including carbon pricing, output-based allocations and the emissions cap, as a way to show investors that Canada was taking climate change seriously. And it worked. The cap and other policies produced concrete incentives for companies to reduce their per barrel emissions. In turn, this gave investors more confidence and now the industry has made a commitment to be net zero by 2050.

Emissions caps and other related policies are not some sinister plot to shut down Canada's oil and gas industry. Done well and carefully, they are simply reasonable, even necessary, policies to help the industry adapt to changing circumstances. But to be honest, from the perspective of Alberta workers, an emissions cap is not the biggest issue facing our province's oil and gas sector. It's not even close. The biggest issue is the unfolding global energy transition itself.

Contrary to the spin coming from certain politicians and pundits—

[The Chair, Liberal, John Aldag]

I'm sorry, Mr. McGowan. I'm going to jump in for a second.

Your audio is cutting out a little bit. I wonder if you could just shut off your video for now, just to save some bandwidth, and see if that helps stabilize the audio feed for us.

Sorry to interrupt you, there, mid-sentence.

[Gil McGowan]

Okay, I'll do that.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

I was just going to ask if he could pick up from “not”.

[The Chair, Liberal, John Aldag]

Yes, perhaps you could go back maybe a sentence.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

There was "not" and I missed what came after "not."

[The Chair, Liberal, John Aldag]

Perhaps you could go back maybe a sentence or two from where I cut you off. I've stopped the clock so you still have the time we've lost here.

[Gil McGowan]

Okay, thanks very much.

[The Chair, Liberal, John Aldag]

Are you ready to go?

[Gil McGowan]

I am.

[The Chair, Liberal, John Aldag]

Please proceed.

[Gil McGowan]

But to be honest, from the perspective of Alberta workers, an emissions cap is not the biggest issue facing our province's oil and gas sector, not even close. The biggest issue is the unfolding global energy transition itself.

Contrary to the spin coming from certain politicians and pundits, the energy transition is real, it's happening whether we like it or not, and it is not being driven by policies from Canadian governments. Instead, it's a global phenomenon that is largely outside of our control. We could ignore or deny it, and end up with regional economies that look like the American Midwest rust belt after ill-advised trade deals sent hundreds of thousands of good manufacturing jobs overseas, or we could acknowledge that the transition is real and put plans in place to support affected workers through it and pivot towards the economic opportunities that the transition creates.

As the leader of Alberta's largest worker advocacy group, I firmly believe that adaptation and planning are better than denial and delay. Having said that, I don't want to suggest that navigating the energy transition will be easy. There are 140,000 Alberta workers directly employed in oil and gas, and another 50,000 workers work in oil sands related construction. The value that these workers create represents more than 25% of our provincial GDP. It also sustains countless Alberta families and communities.

However, change is coming and it's coming fast. Oil and gas employment in Alberta is already down by 42,000 jobs from its peak in 2013. Despite record prices and record profits over the past six months, employment in the sector is not increasing. This is the future. If you really want to help Alberta workers, I urge you to stop trying to score political points and instead start talking about an ambitious industrial policy for the provinces affected by the energy transition on the scale of the mobilization for WWII, the postwar Marshall plan or the American moonshot in the 1960s. If that's not this government's priority, then it will be hard for me to get behind any of your plans, including the proposal for an emissions cap.

Thank you.

[The Chair, Liberal, John Aldag]

Thank you.

Again, my apologies for having to interrupt you, but we got the last bit, so that was excellent.

Now we're going to go to Chief Gale and Mark Podlasly from First Nations Major Projects Coalition.

If you're ready go, the floor is yours for five minutes.

[Chief Sharleen Gale, Chair of the Board of Directors, First Nations Major Projects Coalition]

My name is Chief Sharleen Gale. I'm chief of the Fort Nelson First Nation, and I'm also the chair of the board of directors for the First Nations Major Projects Coalition.

I am here in my role as the chair of the First Nations Major Projects Coalition. I'm with Mark Podlasly, who is from the Nlaka'pamux First Nation, also known as Cook's Ferry. He is the coalition's director of economic policy and initiatives.

It is important that I recognize I am speaking to you from my home in Fort Nelson First Nation, which is part of the Treaty 8 territory.

I'd like to begin by expressing the First Nations Major Projects Coalition's support for the Government of Canada's commitment to achieve net-zero emissions by 2050. For our members in B.C., we have had a record year for climate catastrophes that stem from decades of inaction on climate change in Canada and around the world. Examples of climate catastrophes that many Canadians have heard about are in B.C. The first nations along Highway 8 had access to their communities destroyed by floods that were also down most of the B.C.'s highway arteries. Last year's wildfire season destroyed the entire town of Lytton, and an overall catastrophic wildfire season for the whole province followed an unprecedented heat dome in North America.

First nations are on the front lines of climate change. Diminished habitat availability, species extinction, poor air quality, infrastructure loss and extreme weather events are all having a direct impact on first nation communities. They have serious financial, health, economical and emotional impacts on our communities, and the first nations have been sounding the alarms for decades.

We need to ensure that the measures put in place to achieve the Government of Canada's target of net-zero emissions by 2050 do not disadvantage first nation communities, further increasing the hardship to indigenous communities. In any policy, including the GHG cap, hardship should not fall disproportionately upon first nation communities, including those indigenous communities invested in oil and gas. While multinational corporations can better absorb the transition costs required to meet these caps, first nations, typically, cannot.

We recommend that you build indigenous opportunities into Canada's GHG cap, in particular, clean energy opportunities with indigenous equity ownership of new projects and financing government collateralization of investments. We emphasize that this degree of indigenous involvement in investments in both clean energy projects and the oil and gas sector bring value not only to first nations, but also to the Canadian economy in the form of investor certainty.

The Tu Deh-Kah geothermal clean energy project in my own community, Fort Nelson First Nation, is an an excellent example of the clean energy investment that has enabled transitioning away from fossil fuel-driven electrical generation, indigenous equity ownership, local indigenous jobs for those previously in the oil and gas sector, indigenous board management-level decision-making and repurposing an old oil and gas well site to develop this geothermal project. All five of these aspects should be the centre of a Canadian net-zero policy, including the GHG cap.

We should all remember that the Canadian Net-Zero Emissions Accountability Act requires a recognition-of-rights approach, implementation in accordance with the Declaration on the Rights of Indigenous Peoples as well as consideration of indigenous knowledge when setting greenhouse gas emission targets. We recommend that the same approach be taken with your committee's study of the establishment of a cap on oil and gas sector emissions. It should include similar requirements.

Finally, we emphasize the value of capacity development to support first nations to participate effectively in the transition to clean energy opportunities as part of the development of an emissions cap. For examples of what this may look like, I would welcome your committee members and others to attend the upcoming First Nations Major Projects Coalition conference, Toward Net Zero by 2050, in Vancouver, April 25 and 26. This is an online and in person hybrid event that will feature provincial and federal ministers, senators and corporate sector and indigenous sector thought leaders to discuss the most cutting-edge aspects of indigenous ownership and net-zero projects.

Mahsi cho, hai hai. Thank you.

[The Chair, Liberal, John Aldag]

Thank you for your opening comments.

Last for opening statements will be Ms. Adler.

You have five minutes.

[Meredith Adler, Executive Director, Student Energy]

Thank you for inviting me to be here today. I am honoured to be joining you from the unceded territory of the Squamish people in British Columbia.

Student Energy was founded in Calgary, Alberta, in 2009 precisely because young people in Canada wanted to determine how they could be part of creating a sustainable energy system that no longer contributed to climate change or the inequities we see around the world.

[Mario Simard, Bloc, Jonquière, QC]

I'm sorry to interrupt, Ms. Adler.

We no longer have any interpretation, Mr. Chair.

[The Chair, Liberal, John Aldag]

Just one second, Ms. Adler. We'll make sure you have—

[Mario Simard, Bloc, Jonquière, QC]

The interpreter told me that her mike went off, but she is now able to start interpreting again. So, the problem is fixed.

[The Chair, Liberal, John Aldag]

If you could start from the beginning, that would be appreciated. I'll reset the clock. Apparently the interpreter's microphone was off.