Good morning, Mr. Chairperson and committee members.
Thank you for the opportunity to present to this committee. Our presentation today will follow the outline requested by this committee and provide answers to the three questions.
In brief, HD-Petroleum is a company that recycles waste motor oil into diesel fuel. This technology was brought in, via my grandfather, back in 2006, and it has given me the opportunity to develop and commercialize it. Each day, every oil change done on an industrial or commercial basis—in the cars we may have driven to work today...each day that oil is changed adds to the ongoing problem.
The diesel fuel that we at HD-Petroleum produce is not a biodiesel. It is a pure petroleum product. We simply take a hazardous petroleum material and truly recycle it into a green, reclaimed source of energy.
On what innovative transportation technologies are important to our business and why, HD-Petroleum has an innovative technology that substantially reduces harmful sulphur emissions compared to current waste oil processing practices. We're a Manitoba company that has developed and commercialized a micro-refinery technology that recycles used crankcase oil into valuable transportation diesel fuel.
The HD-Petroleum process can remove up to 96% of sulphur from waste oil, ranging from approximately 3,500 to 5,000 parts per million, and reduce the amount below 100 parts per million of sulphur content. This meets the low sulphur requirements.
When this project was initiated, the standard in Canada was the LSD, or low sulphur diesel, fuel. Recently, Canada and most of the world has adopted the ultra-low sulphur diesel fuel requirements, which is 15 parts per million or less. In many parts of Canada and the world, used crankcase oil, if it happens to be collected, is often burned as an unrefined industrial process fuel. Statistics on the amount of used oil that is burned is unclear; however, it is safe to assume in Canada that it is the hundreds of millions of litres.
What we do know is that in 2011 Canada consumed 1.1 billion litres of lube oil, of which approximately 196 million litres are currently being refined, with the remainder lost in use, burned as an unrefined fuel, or simply inappropriately disposed of or inappropriately stored.
HD-Petroleum's recycling technology, while bringing value to a used, non-renewable hazardous resource, also substantially reduces harmful emissions like sulphur and greenhouse gas, as well as displacing emissions and costs associated with the production of fuel from crude oil.
The summary of this micro-refinery technology simply brings the solution to the oil, rather than bringing the oil to the solution. As waste motor oil is distributed to all parts of Canada, including the northern communities, we can provide a locally generated source of energy while cleaning up a locally generated source of contamination.
The second question is what barriers are facing users of these technologies or the entrepreneurs of the companies.
Despite reducing sulphur emissions by up to 96% in the case of HD-Petroleum, users of this technology are faced with a limited fuel market because the economic costs to reach ultra-low sulphur diesel fuel requirements using a conventional hydro-desulphurization process is cost-prohibitive on a micro scale.
Not only is this a barrier to advancing sulfur-reducing technologies, but also the burning of waste oil as a dirty fuel continues to be the foremost alternative for many industry users.
For years, Canada has incrementally moved towards reducing sulphur emissions, and rightly so, due to the extremely harmful impact on health and emissions in the environment when sulphur is emitted into the atmosphere. However, the fuel regulations did not, nor could they, consider waste oil as an industrial fuel source, which has excessively high sulphur concentration, as I previously noted.
In addition, a regionally based, cost-effective technology to manage recycling and waste oil did not exist until now. Today, HD-Petroleum has technology that is capable of substantially reducing Canada's overall sulphur emissions from the existing waste oil use, and it is anticipated that, over time, additional inventors, innovation, and entrepreneurs will continue to discover new technologies in this area.
However, the current regulations requiring less than 15 parts per million of sulphur content for diesel fuel creates a substantial market barrier for those technologies.
I will take a moment and summarize our answer to question number two. In this room there are certainly some members who are very smart. Then there are...the rest of us. After all, when we think back maybe to grade 11 and taking home a report card, it wasn't all of us who took home a report card that had a 100% mark. But if we think of taking home a report card that had a 96%, I know how proud my parents would have been. Quite frankly, they'd have been more shocked and surprised. Report cards with 96% were not something that I brought home.
What we're proposing today, what we currently have, is a 96% solution to the problem. We will get to 100%. The improvement is coming. We just require the support of this innovative and green technology to allow us to economically pursue this.
In summary, we're at 96%. It is net-cost neutral. There is no cost input and no cost output required from the government. We create a micro-refining process in the community where the haz-mat material is generated, offsetting the need for importing a portion of diesel fuel into that community.
As to the third question of what we would like the Standing Committee on Transportation to consider, our recommendation is that, in the case of recycling technologies relating to petroleum waste plastics or waste oils, the conversion to a marketable transportation fuel like diesel should be permitted to meet the less demanding, low-sulphur designation, rather than the ultra-low sulphur designation, wherever the overall net emission reduction is significant. This recommendation meets the intent of the low-sulphur fuel regulation to reduce Canada's emissions.
We recognize that technology development is a constantly evolving process and is impossible to anticipate through specific policy changes. Therefore, we believe that the best method of making policy-makers aware of technologies showing a net reduction in sulphur emissions is to consider them on a case-by-case basis, through an exemption process to the appropriate regulating body. This approach brings a solution to the barrier without negatively impacting existing users in the industry that are currently relying on the burning of unrefined and untreated used motor oils.
The Canada that we're all so proud of happens to be really big, and the business of transportation creates a terrific amount of waste motor oil. We don't live on a small island. We're not in a European community where cities are all relatively close together. To move something from our inland ports to our coastal ports, to the people who need it, requires a terrific transportation network. The generation of this vital piece to our society happens to generate one of the most significant sources of waste motor oil. We at HD-Petroleum are confident that there are many opportunities for green technology to advance with the support of the regulatory considerations we are requesting.
Thank you for your attention to this matter.