Transport Committee on March 13th, 2012

[Mike Sullivan, NDP, York South—Weston, ON]

You're saying it's there now for the smaller trucks. It needs to be developed—

[Claude Robert]

Again, these trucks are very expensive, and for people buying them.... Coca Cola, for example, does it for show.

[Mike Sullivan, NDP, York South—Weston, ON]

Right, but not for—

[Claude Robert]

They couldn't afford to do it if they were truckers; because they sell Coke, they can do it.

[The Chair, Conservative, Merv Tweed]

I have to go to Mr. Toet.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

You'll have to excuse me this morning. I'm somewhat raw.

I'd like to get back a little bit to the regulation issues, and I was very intrigued by what you said about propane being the baseline for the LNG regulations. Have you put anything forward to the regulators in regard to LNG? What are our opportunities there to work with them to really go back to a baseline that is an LNG baseline and not a propane baseline? How are we going to go about that? Have you given that some thought, and do you have anything we could actually bring forward to the authorities on that issue?

[Claude Robert]

To be very open with you, with all the people we've met, we had opportunities.... If you go on the Internet and you punch in LNG, you get about three months of reading. Everything is there, you know. They've discussed it and we've discussed it, but the big question is whether they have the capacity to make a decision and say, “Yes, you have a green light here; go ahead. We are going to talk to the municipal authority, the county, to authorize it. Don't worry; everything is fine.”

It seems they have no authority, so there has to be a direction line because they do have the information now. At the beginning, if I go back two years ago, they did not have the information. They did not even know what LNG was. If you talked about LNG or about CNG and stuff like this, there were some people who didn't even know what it was.

Today they have the information and they know where to get the information about what they did in the States and whatever. There have been some standards established, but in Canada we are restricted on a lot of things we do. It would take too long to tell the stories, but one thing is clear: all our people do is put new regulations in place. There is nobody who is taking the old ones away.

Sooner or later they should clean up their act and say, “Okay, fine. What do we need today?” That's what we need for LNG; let's have only what we need for LNG. Don't look at what is in the book elsewhere. Talk to me about LNG. That will be solved. That's it, because it's not that complicated.

Also, what we need is to convince the suppliers, the people who produce parts, components, and everything, to join the club. We came in to a dealer in Cardinal two weeks ago with an LNG truck. The guy refused to get our truck into the garage. For sure, we have LNG, yes, but if we have a leak, what do we do? Okay, fix it outside. Yes, but it was minus 15 degrees, and it was snowing. We had to tow the truck back to Montreal, because our garage has to be modified and ventilated and everything to accept LNG trucks inside.

There are a lot of things we can talk about, and it goes far beyond saying that I'm running LNG trucks. It's not as simple as this.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Part of it is education, even an industry-wide education too. If you're running into situations like you talked about in this garage, there's also an educational aspect too.

[Claude Robert]

Yes, education is needed for the dealers, the OEM people who do repairs. If you have a flat tire and it's winter and the guy wants to bring the truck inside, when he finds out it's an LNG truck, there's no way he will do it. He won't fix it outside, so you have to go and have it fixed elsewhere.

[The Chair, Conservative, Merv Tweed]

Thank you.

Go ahead, Mr. Richards.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you, Mr. Chair.

I appreciate all the witnesses being here today.

Mr. Robert, I have some questions for you as well. I guess I want to talk a little bit about some of the barriers. I know you mentioned earlier some of the issues, such as fuelling stations and garages. I'd like to ask you about that, but you also talked a little bit about the EPA standards. You've talked somewhat about that. Can you tell me what exactly differences there are in those certifications from what we deal with here in Canada?

I understand that obviously the industry is integrated and that we have to cross borders—those standards are important to us as well. Can you just tell me what the differences are, really briefly?

[Claude Robert]

To give you an idea, a Westport engine—they call it a GX—is actually a Cummins engine, the 15-litre ISX, that used to run on diesel. The EPA developed a program of certification for this Cummins ISX engine, including a catalytic converter, a PDF, and injection of urea into the exhaust system, and all this to meet the EPA requirements.

On that same engine, Westport changed the injector and modified the ECM, which is a computer that runs the engine. That's all they did, and instead of introducing diesel into it, you have a drop of fuel that creates the fire on the piston; then comes the LNG that creates the explosion, and the piston goes down. That's all there is.

Now you are burning 95% LNG, which is a clean gas when you compare it with diesel. Trust me or not, they applied the same damn regulation to the GX engine made by Westport that they applied to the Cummins ISX engine. This is the same engine. If I were to show it to you, you would never see the difference unless I told you; however, in terms of the emissions, one is virtually at zero naturally, while the other one has to go through three processes to get to half that level.

These three cans cost $20,000 per truck, and you still have to have them on the trucks when you use natural gas, which is ridiculous, because you burn only 5% diesel.

In the meantime, they have just authorized Navistar and other manufacturers. Instead of injecting the natural gas to the piston with an injector, these manufacturers put it into the intake, where the air goes into the engine. They throw the natural gas in there, and they use up to about 50% natural gas and 50% diesel. For them, this is fine—no problem.

You wonder about the EPA attitude, and now everybody is reacting. Even the Americans are saying it's ridiculous, because the largest buyers of Westport technology are certainly not Canadians. We've probably sold 75 trucks in Canada so far this year; in the United States, they have probably sold 2,000 trucks, so the EPA is not done for Canadians.

[The Chair, Conservative, Merv Tweed]

I have to stop. How times flies.

I'm going to end with one more round each of three to four minutes, so if you could keep your questions succinct and the answers the same, we can get a lot in.

Go ahead, Mr. Nicholls.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Thank you.

We've been talking about the future today, and we often forget our most important resource for the future, which is water. In finding solutions for a sustainable future, I hope we're not putting the cart before the horse.

I know that there are challenges with natural gas extraction, in certain instances in terms of hydraulic fracturing sometimes jeopardizing water resources. There are challenges with all fuels and with the use of water in the oil sands, so I'm wondering—this is an open question to everyone—about alternative fuels. What about biodiesel? If we look at biodiesel, perhaps it could act as a stimulant to our agricultural sector here, and we could have domestic production of our own fuel in Canada. Is there a future for biodiesels in the trucking sector in any way? Has it been an alternative that's been explored?

[David Bradley]

It's the law in Canada now, at least in Ontario west.

Does biodiesel have potential? Perhaps, if there were regulated quality standards so that we could rely on the fuel and if we had assurances that it wasn't going to impair our warranties, which right now are only to B5. Under the new regulation, it's an average 2%, which means at some times of the year it's going to be well in excess of B5.

We don't have the ability as an industry to be able to guard against it. It's even less efficient than regular diesel fuel, which lands us in trouble from a GHG perspective, so I think we have to look at all alternatives. The industry's view is that, rated against some of the other things coming, whether natural gas or hybrid electric, biofuel is not the solution we want to see in the industry. Whether it's the United States or Europe, they're now starting to back away from their biodiesel mandates, so it's not one that's high on our hit parade.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

My second follow-up question would be about waste gasification, gases made from waste products. Is that along the same line as biodiesel? Is there any future for that? I know there's a company in Houston, InEnTec, that's doing it, and NRCan in Edmonton makes fuels from waste products as well.

[Claude Robert]

I can tell you that right now in Quebec, at EBI, two trucks are running on biodiesel. You can recoup methane from the dump site, and people do that. It has to go through a process of compression and then filtration, but they reuse it.

However, in my opinion you have to keep in mind that in 10 or 15 years from now, you won't be able to go to a dump site anymore. Why? Because if you go to Europe today and visit England, Germany, or Holland, you'll see that all the garbage from houses is segregated and all the organic and the other products are burned. They create electricity and steam with it and use it to heat houses and everything. I believe that the dump yards people see today are not going to be very evident in the future.

Maybe we’ll have to find a way to recycle some of the plastics. I don't know which types and I'm not a chemical analyst, but from what I've seen—we have a division which is a little into chemicals and biomass—they burn mostly everything. It's incredible.

[The Chair, Conservative, Merv Tweed]

Thank you.

Mr. Coderre is next.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you, Mr. Chair.

What strikes me today is that it's kind of common sense versus interest. I truly don't understand why we haven’t settled those kinds of issues. It's a matter of political will, I guess, and just connecting the dots. I hope we will all work together and find some recommendations, specifically on the regulation aspect. I just don't understand.

It's also about diversifying. Why can't we go to Europe? It's like we're depending on only one side all the time.

Mr. Robert, I want to commend you for your passion. I can see why you have been in the business for over 40 years. It must be contagious.

Now, let's move on to the nuts and bolts.

I'll have the question same for Mr. Bradley.

Have you met with the minister?

We make recommendations, and we will make more. The people at the department can take them into consideration, but sometimes that doesn't mean much. Do you get the sense that the department and minister are hearing you? Is anything happening there?

We are natural gas suppliers. I have bad memories of diesel, especially when I think of the Shell refinery that closed in Montreal. It's been converted into a gas storage centre, because they want to move European diesel through Portland. It was not done in the public interest, but in the company's.

What is your relationship with Transport Canada like? How can we help you, both with the minister and the department, so we can push ahead with what you have told us this morning?

Mr. Robert can respond quickly, followed by Mr. Bradley.

[Claude Robert]

David and I have had to go to Ottawa nearly 50 times in the past 2 years.

[Denis Coderre, Liberal, Bourassa, QC]

It's a milk run.

[Claude Robert]

We've explained the merits of this project to everyone. I try to explain that it extends well beyond Transport Robert. This was a crazy idea thought up by the people in my group, at Transport Robert. We realized we needed to look at alternatives for the future, environmentally speaking and so forth, and to figure out our approach. It is important to note that all aerodynamic processes have their limits. Once you hit those limits, that's it. After that, you have to change the type of vehicle; it's not working with Transport Canada.

[Denis Coderre, Liberal, Bourassa, QC]

Tell me about the outcome. Tell me about Transport Canada and the minister.

[Claude Robert]

After that, it was Mr. Lebel. There have been quite a few ministers in the past three years. I can say that we were able to meet with Mr. Lebel. He was aware of the problem, but when it comes time to take action, it's always the same story. We met with Mr. Paradis, the natural resources minister. We met with everyone. But without a shared vision and the desire to take a stand and say enough is enough, we can't move forward. Do you understand? We feel somewhat as though we are preaching in the wilderness.

I agreed to appear before you today because I thought it was a positive forum. To be frank, I'm almost sick of fighting. I will do my own thing in my business, and when everyone else wakes up, they wake up. You know, there is not much we can do. You can't exactly force a horse three times your size to drink water; what can you do?

[Denis Coderre, Liberal, Bourassa, QC]

You can lead him to water, but you can't make him drink.