Thank you very much and good morning, Mr. Chairman and members of the committee.
My name is Peter Boag, and I'm the president of the Canadian Fuels Association. With us via video conference from Calgary this morning is Brian Ahearn, vice-president of our western division and one of our leadership people on this particular file.
First I'd like to say thank you very much for the opportunity to participate in your examination of the safety regime for the transportation of dangerous goods. It is a very important subject, and we very much appreciate being here today.
For clarity, the Canadian Fuels Association represents Canada's petroleum refining sector, that is, the companies that refine, distribute, and market the petroleum products across the country. They're the manufacturing component of Canada's oil and gas value chain, converting crude oil into transportation fuels, which is about 75% of the sector's output, as well as into a broad range of other products including home heating oil, asphalt for roads, and petrochemical feedstocks that are essential components in hundreds of consumer goods that Canadians use and rely on every day, from plastics to textiles to pharmaceutical products.
The transportation fuels that our members produce are a vital component of Canada's energy system. Of the energy that Canadians consume, 30% is for transportation. That's close to 90 billion litres of fuels such as gasoline, diesel, and aviation fuel every year. These are the fuels that keep our economy moving and enable our high standard of living.
With our vast geography and dispersed population, it should come as no surprise that Canadians are among the highest per capita users of transportation fuels in the world. Eighteen refineries in seven provinces produce the fuels that Canadians rely on for 95% of their transportation needs.
Getting fuel from the refinery to wholesale and retail customers is accomplished through a distribution system comprising a network of transportation assets, pipelines, trucks, trains, ships, 21 primary fuel distribution terminals, 50 regional terminals, and some 12,000 retail sites across the country.
Pipeline and truck are the primary modes of shipping fuels from the refinery to market. Rail service is generally used when long distances are involved and there is no pipeline. For some locations, rail may be the only mode of transportation available. For example, many of Canada's northern communities rely exclusively on the rail supply of fuels.
The majority of crude oil that is shipped into refineries is via pipeline and marine tanker, but rail supply of crude is increasing. It's a relatively recent development, a reflection of Canada's expanding oil production, which is outgrowing our oil transportation infrastructure, and of the desire of eastern Canadian refineries to gain access to western Canadian crude for which pipeline access does not exist. Rail is also an important transportation mode for the transport of biofuel inputs, principally ethanol and biodiesel, which are blended at the terminal to meet provincial and federal biofuel-blending requirements.
Canadian Fuels Association members place a very high priority on protecting the health and safety of employees, contractors, and their neighbours. They conduct their business with a dedication to safe and sustainable operation that goes well beyond companies' boundaries and extends into the communities in which they operate. They have developed an excellent safety record operating alongside Canadian communities for more than 100 years.
Indeed, the safety record of Canadian Fuels Association members' refineries is among the highest of all Canadian manufacturers, and their safety record continues to improve. Total recordable injuries for refinery, distribution, and retail employees are down nearly 80% across the sector since the year 2000. This record is the result of tight management across all facilities, systems, and processes to prevent incidents, as well as of constant attention to safety by all employees.
Five elements drive our safety management efforts: a safe work culture; integrated planning and operations; sharing resources in emergencies; continuous improvement in all our safety-related activities; and a commitment to leadership in all safety matters. Our members have a very active spill prevention and response system for the truck transport of petroleum products. We have a mature national program in place based on three critical principles: prevention, preparedness, and response.
For the rail transport of petroleum products, our members rely heavily on the rail carrier for the care and custody of our products. They expect rail carriers to conduct their operations with the same care and commitment to safety that they themselves have in their refinery operations. Thus the focus for improving the safety regime for the transportation of dangerous goods by rail must be on requirements for safer rail operations.
From that perspective, we support the recent Transportation Safety Board recommendations on enhancing the safety of rail operations.
But a safe TDG regime extends beyond rail operations. To that end, Canadian Fuels Association and its members are actively involved with Transport Canada in an examination of additional measures in the areas of prevention, preparedness, and response. We have been working closely with our upstream colleagues at CAPP on a coordinated petroleum industry response and input to recent Transport Canada initiatives.
We are an active member on working groups established by Transport Canada. We support recent working group recommendations provided to Minister Raitt to implement tank car design enhancements for DOT-111 cars and to enhance emergency response through expansion of the ERAPs, emergency response assistance plans, and the establishment of a cooperative single-entity response organization.
With respect to new tank car standards we support a risk-based approach to the implementation of new means of containment standards that puts a priority on high-risk substances, provides realistic timelines for replacement and retrofitting of existing cars, and maintains alignment with regulatory requirements in the United States.
Recognizing that many of Canada's northern communities completely rely on the rail supply of fuels, we really recommend that the government and this committee in its recommendations pay appropriate attention to prioritizing the competing demand of new tank cars for products versus crude to ensure that we don't unnecessarily constrain the ability of northern communities to have access to the fuel they desperately need.
On emergency response enhancements, while supporting expansion of the ERAP, which was a recent recommendation from the working group examining this issue, we have highlighted the risks of a major expansion of ERAP requirements to all flammable hydrocarbons without substantive modifications to the current ERAP framework. We see the need for a more consistent and coordinated approach to response through the development and implementation of a single national entity for response to rail incidents and rail spills. We believe that rail carriers are best placed to lead that new entity.
To that end, the Canadian Fuels Association and our colleagues at CAPP have initiated discussion with the Railway Association of Canada to further advance the concept of a single entity emergency response organization. As well, we're in close discussions with the Canadian Association of Fire Chiefs to examine how to better address the transport of dangerous goods product education and training needs of first responders.
An existing program, TransCAER, well established with our colleagues at the Chemistry Industry Association of Canada, is being actively considered as a potential platform for addressing first responders' TDG product education needs for petroleum products and crude oil.
To summarize, Mr. Chair and members of the committee, we recognize that public confidence in the safety of the transportation of dangerous goods has been shaken. We accept that improvements in the safety regime for the transportation of dangerous goods are necessary to restore confidence. Safe operations are a cornerstone of our industry, so we're committed to working with government and stakeholders to achieve the necessary improvements.
Thank you and I look forward to your questions.