Transport Committee on May 1st, 2012

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Mr. Chair.

Welcome, sir. Thank you for your very enlightening expertise.

First of all, I would like to make some comments to Mr. Davies, and please do not think they are an attack. Far from it.

In your recommendations, you say that “support is needed for attempts to develop a green fleet approach“. Our first problem—and this is not a criticism of you—is that, unfortunately, that concept is poorly defined. Everyone is claiming to be green these days. The technology of natural gas buses is less polluting than diesel, but it can't really be said to be green. As an approach to public transit, it is less polluting. Could we agree on that?

[Russell Davies]

That's correct. There are emissions from a CNG bus—

[Robert Aubin, NDP, Trois-Rivières, QC]

As I listen to you, I get the impression that we are being presented with this technology as a required transition, a faster transition, that will eventually lead us to the use of energy that would in fact be totally green, like the electric car or public transit that runs on electricity.

My first question goes to Mr. Pascoe.

In your experience, could you tell me when the first completely electric vehicle, with a range of 500 km, will be available at a price the average consumer can afford, that is, the same as a current vehicle?

[David Pascoe]

That's an interesting question.

Today, electronic vehicles struggle to get to around the 100-kilometre range. What we've seen as we do work on batteries is that with lithium-ion technology, nickel metal hydride, lead acid, and so on—but nickel metal hydride is the premium one right now—as you add energy into a battery, because to get more range you need to have more energy in a given space, you challenge the safety aspect of the battery. Today we're at 140 or 150 watt-hours per kilogram, and to get to 500 kilometres you'd have to be at roughly 750 watt-hours per kilogram to have the same size of battery in a vehicle, which is already quite large. For all known battery—

[Robert Aubin, NDP, Trois-Rivières, QC]

I have to interrupt you because I have very little time and I have a lot of questions. Could you give us an approximate number? Do we have to wait 5, 10, 15 or 20 years before electric vehicles are standard?

[David Pascoe]

There's no horizon, as far as I know, for an electric car that goes 500 kilometres. For electric cars as a high volume, it would be, in my opinion, greater than, let's say, 10 years, probably greater than 15 years. In the near and medium term, probably just a few per cent of the vehicles will be electric cars.

[Robert Aubin, NDP, Trois-Rivières, QC]

The American government, for example, is investing $25 billion in an electric transportation fund. Do you think that the Canadian government is doing enough? Should we be putting our efforts into that area, or should we have a transition period where we move to natural gas?

[David Pascoe]

What I think regarding investment in electric vehicles is that it's good to look to the future, because if we're going to get there one day we have to make some investment. It's really a bit of a calculated risk, because we don't know when we're going to get to having broad-based, high-volume, across-the-board electric vehicles. But if we don't start, we won't get there. A certain amount of investment makes sense.

In the short and medium term, we have to look at things such as natural gas that have the ability to be more broadly applied and that, given a certain amount of funds from people buying vehicles, can provide more broadly applied fuel savings or emission savings.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

My next question goes to both Mr. Davies and Mr. Pascoe.

Mr. Davies, in your presentation, you said that we have natural gas reserves for about 100 to 140 years. Are those conventional gas reserves or do they also include shale gas?

[Russell Davies]

From what I understand, that's shale gas development. The 100 years is based on what's available today. From all the information we've received so far, the reserves far exceed what we know we have today. That 100 years is very pessimistic, almost.

[David Pascoe]

It is. We were at 40 years of known reserves about 12 to 15 years ago. With the fracking and the shale gas, it's gone up an awful lot without really finding a lot more gas.

[The Chair, Conservative, Merv Tweed]

Mr. Toet.

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

Thank you, Mr. Chair, and thank you to our witnesses.

I have a question, and will start with Mr. Pascoe. I'm going to be fairly blunt, because I had the perception on this from your conversation today, and as Mr. Poilievre said, I thought we'd hear a lot about battery technologies. I'm going to be pretty blunt with my question.

I get a sense that you've lost confidence in the battery technology, especially when you gave us a window of 10 to 20 years down the road. There's been a lot of research dollars invested in this over the years. We talk about innovation and change. When I was a young boy, and that was a little while ago, battery powered vehicles were the big talk back then. We're a long way from that time, and yet we're still looking far away to the horizon.

Is there a loss of confidence in this technology actually being the future?

[David Pascoe]

What I want to express here is that I think there are still lots of places for batteries to be used sensibly in vehicles. It's mainly in the hybrid area. In the electric vehicles right now, batteries can be used, of course, but there needs to be additional development in order to be broadly applied.

For example, for a hybrid vehicle, the payback on your capital investment, which is your battery and other electric attributes of the vehicles, is only about four years as a consumer, which is pretty reasonable. That uses battery technology. Batteries can be applied to automotives sensibly, with a good payback, with today's technology.

With electric cars it can be applied, but only on a smaller basis until we get the battery technology ahead. The outlook for that, in my opinion, is uncertain. There's an awful lot of research going on. It could be soon. It could be a long way off. The answer is, I don't know, and I've spoken to a lot of people. I don't know.

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

That comes back to some of the questions that were directed to Mr. Davies regarding the investment and innovation investment. We've seen a lot of investment happening. As had been alluded to, my background is in business. You talk about a business case where you can make the case for a six-year return, 10 years at the worst, but that includes the development of a facility. Six years is the actual bus payback period, and you've indicated that you may see that quite a bit sooner than the six years.

I was in an investment intensive industry for a long time, an industry that was driven by innovation, where we had new technology which, within several years, would be out of date. We did a lot of investment every year to keep up with that. We were not driven by governments. It was an industry that wanted to see change and wanted to innovate.

Can you rationalize for me why we would need to be able to do that? To me, that's a great return as a businessman, if I could return my investment in six years, and then going forward, it would actually be a great savings. From a business aspect, I'd have a hard time making that case of going to somebody and saying, I actually need your help to do this.

[Russell Davies]

As was mentioned, we have started down that path as the City of Calgary, independently. We have a certain amount of our budget available for new vehicle procurement, which we are earmarking now for CNG bus procurement. We are looking at the P3 model in terms of building the facility. We have been doing it on our own already.

As I mentioned, the majority of the 400 buses that would be CNG would be replacements for our 25-year-old buses. There's a significant amount of investment still needed to be able to deal with the other 600-plus expansion buses that we're going to have. By the time this project is completed, there probably still will be 1,000 buses that we will need to do something with. As I mentioned, at $400,000 a bus, there's no way that even as a fairly sizeable department within the City of Calgary we could get that level of investment.

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

You indicated that the lifetime of a bus is about 12 years, so you're looking at those investments over the next 12 years, whatever the scenario would be. Whether they'd be completely conventional buses or CNG buses, that's an investment, and if I understand right, you're adding about $50,000 per bus for the CNG conversion. Really, in the big picture, even at 1,000 buses the additional investment for CNG is not huge.

That brings me back to the building. You talked about having your building completed by 2015. When do you intend to start on that building process?

[Russell Davies]

The P3 application will be submitted in June this year.

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

But when do you actually hope to be able to start building?

[Russell Davies]

I'm unsure, to be perfectly honest, what the P3 approval timeline is. The reason our timeline of 2015 can be so aggressive is that we already own the land. We have land identified, and it's already transportation land within the city of Calgary.

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

I guess I'm looking at the fact that you want to start your testing in early 2013. You're looking to do an 18-month test and you want to get through two winters. That leaves your building and infrastructure aspect a pretty short winter to be ready by 2015, unless you're going to start building before you've actually completed your testing cycle.

[Russell Davies]

We need to build a bus facility anyway, but we're going to make this facility CNG compliant and allow it to do CNG fuelling. If the trial works out unfavourably, there is minimal risk in terms of the actual building changes that need to be made.

[The Chair, Conservative, Merv Tweed]

I have to stop you there.

Mr. Sullivan.

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

Thank you, Mr. Chair.

Mr. Pascoe, you started your speech earlier with a suggestion that we have to reduce the fuel consumption of our vehicles by about 50% within the next 10 to 15 years. We also have to reduce our carbon dioxide emissions by 75%. The two are sort of interrelated, but we're never going to get to 75% if all we do is move to natural gas. Is that correct?

[David Pascoe]

That is probably correct. If you wanted to look at it as having to move to pure electric cars, I don't think we're going to get there on an economic basis. But you could look at the natural gas as part of the mix, because it certainly is better than diesel or gas by 20% or 25%.