Natural Resources Committee on Feb. 28th, 2022

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

Thank you, Mr. Chair.

I just wanted to go back again as well. I've mentioned in previous committees my enthusiasm for technology in our industry to be able to develop systems through the private sector and universities and colleges to reduce greenhouse gases around the world and, obviously, for the 1.8% or 1.6% we have here in Canada, to do everything we can to get that to zero as well.

There are concerns from my colleagues as well, in that if we did hit zero, the 2% would be very easy to replace by the types of oil that have much higher carbon content than what we have in low-carbon content in Canada.

I want to ask Mr. Tarvydas this, and maybe I'll have time for others. In regard to the study we're doing in that area, it's on an emissions cap. Some have said they want to see a production cap, but the witnesses we've had so far have all agreed that this would be an emissions cap, and that's good for the world.

I want to hear your thoughts in regard to the use of technology around the world—we have the expertise and it's already being done here in Canada—on how that would play out if we could actually export the technology around the world and get greenhouse gas emissions down. A prime example is the coal industry, which some mentioned earlier. We already have systems in Canada that will scrub it as clean as liquid natural gas, basically, but it's very costly. Can you respond to that first? I know that you mentioned the nuclear advantage and everything, but I'd like to have your opinion on that.

[Robert Tarvydas]

Mr. Chair, I think Canada is relatively uniquely positioned to further the development of certain technologies related to carbon reduction. CCUS is one, and direct capture from the atmosphere is another one. We do have a pretty active energy industry in this country. I think we have the opportunity to develop these technologies.

Of course, the technologies wouldn't be limited to just Canada. They could be used anywhere else in the world where somebody wanted to reduce the amount of carbon out there. This would be one area in which, potentially, Canada could take a leading role and actually export technology, potentially to the benefit of the Canadian economy.

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

What impact would putting a limit on production in Canada have for our existing oil and gas industry?

[Robert Tarvydas]

Well, as I said in my opening statement, I think that putting a production cap in place is certainly possible. As I think almost everyone around the table here has been saying, that is not the goal. The goal is to have an emissions cap. The production cap is potentially the most draconian way of getting there. It would inherently reduce the amount of emissions that go with it, but it would obviously also then decrease the benefits of adopting some of these technologies. Using something like carbon capture and storage does allow you to continue to produce a certain amount of energy at the same time you are lowering or eliminating emissions.

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

Thank you.

Ms. Winter, I wonder if I could get your opinion here, as well, on what I'm going to say and whether or not I'm on the right track. It's important that we look at decreasing greenhouse gas emissions around the world, but that being said, the production could still increase by 2050, because we need to gauge what the energy needs of the world will be at that time. As my colleague has said, greenhouse gas emissions have gone down for our own oil content, but we could still have more production 10 years from now than what we have today but still with a smaller amount of emissions around the world.

Can you give us your thoughts on that?

[Dr. Jennifer Winter]

Conditional on substantial emissions improvements in oil and gas production, yes, there is absolutely the possibility of increased production and lower total emissions. It's also conditional on emissions intensity improving by more than production increases.

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

Thank you.

Would anyone else like to chime in on that as far as the overall world levels of production or usage of energy in the future go?

[The Chair, Liberal, John Aldag]

Ms. Levin has her hand up.

[Julia Levin]

Thank you.

As has been said many times, the problem is the carbon embodied in the product. I'd like to disagree with the last witness, Professor Winter. If we increase the production of oil and gas, that will increase the amount of emissions in the atmosphere. Even, let's say, if we use carbon capture and storage—and again there was a question earlier about how much the industry wants—the industry wants $50 billion from the government to pay for carbon capture and storage. That's why 400 of Canada's leading scientists and economists sent a letter to Minister Freeland saying that this is a bad use. A tax credit towards locking in a sector that is incompatible with a climate-safe future would be a terrible use of public dollars.

Even by using carbon capture and storage, we can actually tackle only between 3% and 9% of the carbon associated with the life cycle of oil and gas. There's no way we can talk honestly about increasing production if we want a livable future.

[The Chair, Liberal, John Aldag]

Unfortunately, we're more than a minute over on this one. We need to keep going.

I know Mr. Leach's hand was up, and I saw another hand. We won't be able to go to you now.

I will move to Ms. Jones, who will have five minutes. She can either pick it up or move on to her own round of questioning.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you, Mr. Chair.

Thank you to all the panellists for their presentations today. It's very interesting, not unlike several of the meetings we've had as a part of this study, where we've heard support directly for carbon pricing and from others for cap and trade, from some with regard to production and from some feeling that we need to focus on carbon and not on production. We keep hearing different messages from different panellists.

When Mr. Angus was questioning Mr. Marshall, Mr. Marshall indicated that we could not reach the targets we've set by 2050. I'd like to ask Mr. Keith in particular, because we haven't heard a lot from him so far in this panel, if he shares that perspective, and if he shares the perspective that we need to cap at 2019 levels but keep reducing until we get below 2005 levels.

If there is any other panellist who would like to respond to that, I'm interested in knowing if you share that view or if you have a different view or a more optimistic view about where we're going and the direction we're headed in, but I'll certainly start with you, Mr. Keith.

[Dr. David Keith]

Predicting energy futures is very hard. If you look at the quality of the historical projections, they were extremely inaccurate. My personal judgment is that the chance of meeting those targets is very low, but I don't actually have a lot of confidence in my own judgment. It's also important to say that the targets are fundamentally political. They don't come from some cost-benefit trade-off. They're not actually what scientists say, and I'm one of the scientists.

It's also important to say that economists do not actually say that carbon pricing is always the most efficient thing. That is not what careful econs say, because it is only true in a world where technology does not respond to prices. If you have an economic model in which technology is what we call exogenous—doesn't respond to prices—then just going up from the lowest price to the highest is the right thing. But in the world we actually live in, which is much more uncertain than the world of those models, it is not necessarily true that carbon pricing is the most effective thing, and maybe in some cases and not in others.

[Yvonne Jones, Liberal, Labrador, NL]

Thank you.

I don't know if there is anyone else who is really pressed about sharing an opinion on that. I would like to take one more response if there is one. If not, I'll move on to my other question.

[Dr. David Keith]

On this topic?

[Yvonne Jones, Liberal, Labrador, NL]

Yes.

[Dr. David Keith]

On the cap, I would prefer a strong cap for reasons that I said are really reasons of industrial and social policy in Canada, to reduce the chance of a crash. That is, to be clear, that is a separate policy objective from climate. It's related, but separate.

I'll also take the time to say that I happen to be the founder of a company in Canada that does direct air capture, so I'm pretty involved. I think there are ways it could be very useful, but I don't see a scenario, as our witness from TC Energy does, in which this is just used to compensate for emissions from oil in the future. If you think about this under a roughly even carbon pricing scenario, that is not a world that happens.

[Yvonne Jones, Liberal, Labrador, NL]

Okay.

I'd like to move on to Ms. Levin on a question.

Obviously, whatever we do here as a government is going to have a significant impact on workers and families and on economies in various provinces, especially in the Prairies right now, where we're hearing a lot about this. I know it's easy to say that we have to get behind the transition. I think we're all behind it. I think the majority of Canadians are very much behind this and want to see real results; however, there is a serious issue here that affects the economy as well and affects workers and their families.

You suggested that we have to create those opportunities. What are those opportunities? What would you be proposing today to those provinces and those thousands of workers who are going to be impacted? That is a responsibility that our government has to look at, as well as the climate piece. We want to do both, and we want to do both well.

[Julia Levin]

I think it's incredibly important that we make sure the way we are putting in climate policies brings workers alongside. We know that investments in the fossil fuel sector have the lowest job creation potential of any sector of the economy.

That $50 billion to oil and gas would result in so many safer jobs, good-paying jobs, if we took that money and invested it in the renewable energy sector, in energy efficiency and in the clean growth economy, which have a future in a carbon-constrained world, whereas, as I said before, oil and gas are on the way out, as we see car companies committing to go fully electric. This is the sector that is the sector of yesterday.

We decide whether we want to equip our communities to succeed in the parts of the economy that actually have a future and bring those workers along, or we're stuck in the past, and it's workers who will suffer as a consequence.

[The Chair, Liberal, John Aldag]

We're out of time on this round.

We'll go to Monsieur Simard for his final two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Just like with Smarties, I saved the best for last.

I have a quick question for Mr. Langlois-Bertrand. In your opening statement, you said that costs and technological constraints would make it difficult to achieve our emission reduction targets, especially in the oil and gas sector. You also said that sector should be putting forth the most effort. I want to point out that the Minister of Environment and Climate Change recently stated his intention to phase out fossil fuel subsidies by 2023, calling them inefficient.

As we know, the devil is in the details. What, then, makes a subsidy efficient versus inefficient? I don't want to put words in the minister's mouth, but my sense is that Canada is about to provide financial support for strategies such as green hydrogen production and carbon capture. However, there is a basic principle when it comes to environmental measures, the polluter pays or bonus-malus. Therefore, activities with a low carbon footprint should be rewarded and those with a large carbon footprint should be discouraged. In light of that, could you comment on federal government investments in hydrogen and carbon capture strategies?

[Dr. Simon Langlois-Bertrand]

Thank you for your question.

You have to be careful when it comes to carbon capture. Indeed, short-term investments can seem appealing. I'm going to refer to a few of the statements made earlier. The idea is to achieve net-zero emissions by 2050. Technology will get better, but right now, that means a staggering amount of gas already has to be captured, unless we stop all agricultural, industrial and other such activity. If every sector starts capturing carbon instead of reducing emissions, despite being difficult in the short term, the future of carbon storage is likely to be riddled with complications. The quantities will become impossible to manage, mainly because we have little experience in storing huge quantities of carbon.

On the hydrogen front, the future is very uncertain, in Canada and elsewhere. Many companies and countries are choosing to go in another direction, while others continue down this path. It's tough for the government to make a choice at this stage in the game. It needs to move forward on a gradual and short-term basis. It's not an easy solution.

[The Chair, Liberal, John Aldag]

Thank you.

Mr. Angus, you get the last two and a half minutes.

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

Thank you, Mr. Chair.

I would like to give my friend and Green Party member, Mr. Morrice, an opportunity to ask his questions.

[Mike Morrice, Green, Kitchener Centre, ON]

Thank you, Mr. Angus, and thank you, Chair.

I think it's important that we're having this conversation today, the day on which the UN Secretary-General, speaking of the most recent IPCC report, said—his words—“This abdication of leadership is criminal. The world’s biggest polluters are guilty of arson of our only home.”

Mr. Marshall—and Ms. Levin, if you'd like to add to it—you said “call the industry's bluff on emissions intensity”. I think it's important that we do away with myths and stick with facts in this committee. I know you've spoken with this committee before. Can you share the fact of Canada's emissions intensity as compared with global peers and how it has risen over recent years?

[Dale Marshall]

There have been a number of different academic research papers written about the carbon intensity of different sources of oil. Last time I was at the committee, I mentioned that Masnadi et al. in 2018 had found that Canada's oil was the fourth dirtiest on the planet out of 50 major producing regions.

I had hoped Dr. Leach would have been able to weigh in when he was contradicted. The emissions intensity of Canadian oil has gotten worse over the last 30 years. That's because we've moved from conventional oil to more oil sands, and in the oil sands we've moved from oil sands mines to in situ.

Canada's not going to solve the climate change problem by exporting more oil. Our oil is dirty, and it's getting worse.