Transport Committee on Oct. 19th, 2011

[An hon. member]

Yes.

[The Chair, Conservative, Merv Tweed]

It's up to the committee. I don't make that decision.

Okay? It will be five minutes, starting now.

[Denis Coderre, Liberal, Bourassa, QC]

I will postpone the study of my motion to the next meeting. Is that okay?

[The Chair, Conservative, Merv Tweed]

We'll defer it to the next meeting.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you very much. I have to say that I really liked that the presentation was given in both official languages. I appreciate it.

I don't have a problem with natural gas being used, on the contrary, since it can be clean energy. But I have three questions about the recommendations in the final report.

First, when we talk about natural gas, we are also talking about shale gas. But the extraction of shale gas poses problems in terms of fracking. The gas in vehicles might not create any problems, but getting the gas could lead to environmental problems. What do you think about that?

Second, do you think that the Canadian government should have a transition fund to allow municipalities or the provinces to change the types of engines they use? That would also entail investing in research and development.

Lastly, in terms of diversification, Quebec chose electricity, but there is also natural gas. According to you, the national strategy should give a choice between various sources of clean energy. You are saying that natural gas is an option, but there can also be other options.

[Dr. Sam Shaw]

Yes, and I would support your recommendation. The Robert trucking company, for example, has embarked upon looking at natural gas for the trucking industry. Gaz Métro has been a leader. I would absolutely say yes. I think the federal government, in looking at municipalities, could ease that for municipalities in helping them over that bridge of the capitalization.

In regard to looking at extraction of natural gas, there is conventional and unconventional, and you're referring to unconventional. I can say to you that the industry is coming out with principles around hydraulic fracking. In Alberta we've been hydraulic fracking for 30 years, so again, I think there are some really good principles and testaments of how well industry has responded to making it a responsible steward kind of opportunity to extract resources.Again, I think it's important that industry has responded to the regulations and so forth. So it is being done.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you.

[Dr. Sam Shaw]

Thank you for your questions.

[The Chair, Conservative, Merv Tweed]

Thank you.

Pierre.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Dr. Shaw, thank you very much for being with us today.

I have a couple of questions for you. To start with, there is a clear price advantage for natural gas right now. Your graphs show that. All of the public data confirms it.

There's a capital cost involved in switching over to natural gas powered vehicles of any kind, whether it's the infrastructure within the vehicle or the fuelling station. We can only determine whether or not that infrastructure investment is worthwhile by looking at the payout in savings on fuel prices over the long term, as represented by the gap per million BTU between gas and oil.

Here's my question. Are you sure that this price advantage is here for the long run? Or are there factors like the shipping of LNG to big markets like Asia that could increase natural gas prices in North America and eliminate that price advantage, thus undermining the return on investment on the infrastructure side?

[Dr. Sam Shaw]

Thank you for your question.

Let me just raise the caution on any forward-looking comments I may make to an investor or a future investor, but if you look at most of the data that's been presented--again, referencing the Senate committee on energy--you'll see that the long-term view of natural gas prices remains low. Certainly, EIA from the U.S. supports that view, because of the supply and because of the surplus.

Even if you look at export markets of LNG to Asia, you should also be aware that Australia and China do have finds of natural gas. I mean, the marketplace is a limited one right now. Asia certainly would pick up on the LNG. But I don't think that in the long term you're going to see sharp prices in natural gas.... That's why that uncoupling is really being predicated based on what we know of the supply today.

If you look at the price of natural gas today, you'll see that it's $3.68 BTU, so it would have to go a long way, and certainly when the supply goes up, you're going to have more supply and demand, and again, that will push the 100-year supply. So I doubt very much, long-term, that it in fact would impact that decision. I think it would be a justifiable decision to go to natural gas because of the long-term relationship of having a low natural gas price.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Are there obstacles that governments are putting in place that are preventing the conversion from petroleum-based gasoline to LNG or CNG?

[Dr. Sam Shaw]

I don't know whether I would position it as barriers. Certainly, standards are one thing we need to look at, interprovincial standards. As I said in the presentation to the FINA committee, we need to look at these standards. There needs to be harmonization between the U.S. and Canada. That's very important. Certainly, as you look at public transit and at the actual capital, it needs to be seamless with the U.S.

The other element to this is certainly in regard to looking at some of the programs that come out. If you look at the eco-programs, I would ask any member to find the reference to natural gas on the transportation side—I didn't see it—as alternative fuel. So in terms of some of the programs that are already there, we need to reference that there are opportunities for natural gas.

[The Chair, Conservative, Merv Tweed]

I have to interrupt there. I'm sorry, Dr. Shaw. Because of the vote, we'll shorten this meeting. I'm sure we'll get an opportunity to visit with you again.

[Dr. Sam Shaw]

May I ask the clerk to distribute the materials? Also, if there any questions, please, if they go to the clerk, I would be happy to answer them.

[The Chair, Conservative, Merv Tweed]

We will do that. Thanks very much.

The meeting is adjourned.