Public Accounts Committee on Dec. 2nd, 2022

[Derek Hermanutz]

I'm not sure exactly what the commissioner is referring to there, but the whole of government is responsible for developing the policy analysis and projections that go into the climate plans. ECCC is the coordinator of that process.

[Michael Kram, Conservative, Regina—Wascana, SK]

If it's a whole-of-government approach, would it be safe to say that you have to go all the way up to the Prime Minister then for accountability as to who is responsible for developing the cost-effective decarbonization pathways?

[Derek Hermanutz]

Yes, the document has to go through approval processes.

I'll ask the deputy to respond directly to that.

[Christine Hogan]

I would comment that ultimately, yes, these are approved as Government of Canada documents and plans. I think the specific work that happens on the modelling and the individual data that's collected is typically handled at the officials level.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Kram. That is all your time.

Mrs. Shanahan, you have the floor for five minutes.

It's over to you.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

I, too, would like to thank the witnesses for being here on this very important topic. Certainly it's an educational topic for me.

I'd like to take up where my colleague left off on the risk of being left behind. I, too, am trying to understand the business case for hydrogen. I'm trying to understand the equation between the amount of investment and the actual cost-benefit of using hydrogen.

Mr. Hannaford, can I hear you on that?

[John Hannaford]

Mr. Chair, the potential here is manifold. We certainly have domestic applications of hydrogen that we are already seeing develop. I mentioned the transportation opportunities, but there are heavy industry opportunities as well.

As the technology continues to develop.... I noted that there were a couple of feedstocks for hydrogen. The technology to create clean hydrogen—which is very low-carbon—from natural gas has advanced dramatically over the course of the last period of time.

We have domestic applications that are evolving and are increasingly real, and we have international opportunities, which are likewise evolving and are increasingly real. The degree to which we are being approached by critical partners is one of the indications of that.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I do hear the concerns, Mr. Hannaford, of my other colleagues around just how much money is being invested, by both the public sector and the private sector.

Is there a sweet spot that we can anticipate in the near future? Has there been progress, in other words, in your measurement of the potential of this technology?

[John Hannaford]

Mr. Chair, as I mentioned, a series of conversations have been happening over the course of the last period of time, which increased our knowledge collectively with respect to hydrogen and its potential. I would say that we are seeing quite substantial progress.

As I also mentioned, this is partially driven by our climate objectives. Obviously, the climate crisis is a critical aspect of this, but geopolitics is another. As we talk about energy security and the experience that our European friends are going through as a result of the crisis in Ukraine, issues around diversification of energy supply and the different sorts of fuels and energy generation that are being considered are accelerating, in part because of the realities that our friends are confronting.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Well, that is interesting, Mr. Hannaford. I'm a resident here in Quebec, and we benefit, of course, from a terrifically efficient and cost-effective electricity system.

Can you talk to us about hydrogen's comparative advantage to electricity in powering our transportation?

[John Hannaford]

I think various parts of the country are going to have various advantages with respect to hydrogen. I mentioned earlier the work that we are doing with the provinces and territories through the regional tables, and that's partially to make sure that we are being as focused as we can be on specific advantages that each of the regions has.

In Quebec, where there is the possible generation of hydrogen through clean electricity and the separation of water molecules, one of the benefits of hydrogen is as a means of transporting electricity effectively. You can convert electricity into hydrogen, and then that can be transported and then used at another location to generate electricity. It is the possibility, in effect, of the export of electricity.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you.

Is there anything else you'd like to add?

How does government view hydrogen's role? Is this the silver bullet, in other words, for our challenges ahead?

[John Hannaford]

I would describe it as an area of real potential where we are dedicating very serious attention and serious resources, as we've mentioned, through various investments.

In order for us to deal with the issues of both the climate crisis and energy security, we're going to have to think of a number of different pathways and pursue a number of different pathways in order to achieve what we need to achieve, but hydrogen certainly has the potential of being a very significant part of that mix.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you.

[The Chair, Conservative, John Williamson]

That is time. Thank you very much, Mrs. Shanahan.

Mr. Trudel, you have the floor for two and a half minutes.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

Mr. Hannaford, I would like to go back to our earlier conversation on carbon capture. This new technology sucks carbon out of the air and buries it in the soil. The Government of Canada is a big promoter of this technology, but others remain highly skeptical.

I visited some businesses in British Columbia. Millions of tons of sequestered carbon could be released into the atmosphere due to the melting permafrost and earthquakes. How can we make sure that this does not happen? Can you provide any reassurance? What do you think?

How much time can carbon stay buried in the ground without coming up to the surface?

[John Hannaford]

Mr. Chair, carbon capture and storage technology has been evolving over a number of years. It is not new, and we have applications of the technology that are functioning. In Alberta, the Quest project is an example. There are a couple of references there. There's the storage of the carbon, and there's also the means by which it's captured. Those are a couple of different issues, in a sense.

I believe what you're referring to is direct air capture, which is the drawing out of hydrogen from the atmosphere. It is a technology that's evolving, where Canada is seeing some innovators who are making substantial contributions to the evolution of that technology.

We also, though, have people who are investing in and are real experts with respect to capture through industrial applications, through a variety of other applications of carbon that's generated. Storage of that carbon depends a bit on geologic formations. Canada has real advantages with respect to that as well. In Alberta, there are very substantial geologic formations that can form a real opportunity to store substantial amounts of carbon, and those are subject then to monitoring and to a series of other means by which the carbon is captured effectively for an indefinite period of time.

[Denis Trudel, Bloc, Longueuil—Saint-Hubert, QC]

What would you say to people who claim that carbon capture is a form of greenwashing that allows big oil companies to clean up their act or prove that they are taking measures to reduce greenhouse gas emissions, at least on paper?

[John Hannaford]

I would say that, in order for us to achieve what we need to achieve in terms of decarbonization, we are going to need to pursue a whole series of different kinds of technologies, including carbon capture and storage, and that's been recognized internationally by leading authorities on energy and on climate.

This is a technology that has real potential. We have a leadership role with respect to it, and there are opportunities, again, not just domestically but also in terms of global markets.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Desjarlais, you have the floor for two and a half minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to return now to the assumptions versus what's really happening here in Canada. The assumptions that are pointed out in the commissioner's report are used for a particular set of modelling, as we just heard. There's also, of course, the existing modelling on policies and investments that are happening now.

With that in mind, this is for the deputy minister of Environment Canada.

When approaching the issues that are present within the targets—and you can see within the commissioner's report that reliance on the assumptions-based modelling versus the modelling of the current investments—when asked about whether or not Canada can achieve its targets, it's appropriate to be using the information and modelling that's present within the data that models existing investment. Wouldn't you agree?

[Christine Hogan]

Mr. Chair, I would respond again by talking about the fact that—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

For example, there is a critically important electrical grid that is a cornerstone of the plan that your ministry is taking up, but that hasn't been in the government's current investments, and the assumptions are that this policy will be in place to actually hit those targets. That is not currently in place.

Are there investments to enable the building of an electrical grid today?

[Christine Hogan]

I'm trying to make sure I understand the question.

I think that the modelling effort incorporates all of those elements to the extent that we have that information. It pulls on a number of inputs. It has to deal with policies that we know of, whether they are at the federal level or the provincial level, and that are happening across the economy.

I would also highlight to the committee and to you that this is an evolutionary piece of work. We model efforts for each of our climate plans, but as people will know, when it comes to the progress report that we will have to make against our emissions reduction plan in 2023, there will be, of course, an updated set of projections there, as my colleague Mr. Hermanutz mentioned.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

We won't know. It's evolving.