Evidence of meeting #77 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was product.
A recording is available from Parliament.
5:10 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Sorry, you called this synthetic Albian crude. Is this one of the condensate and oil mixes? I'm not familiar with this.
5:10 p.m.
Director, Response Readiness, Western Canada Marine Response Corporation
That's correct. It's a product that's very similar to diluted bitumen.
5:10 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Beyond the field experience, has your company done any empirical research to understand the weather? I know spill to spill things are very different in terms of wave action and in terms of weathering, all of these factors that we deal with on the north coast.
5:10 p.m.
Director, Response Readiness, Western Canada Marine Response Corporation
Yes, absolutely. We have been involved with Natural Resources Canada on undertaking studies, in which we look at the behaviour, the weathering of the product, and how it affects our ability to recover it in those types of circumstances. We want to understand the product and how it behaves on water. We've been part of a number of studies by industry and government.
5:10 p.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
From an industry perspective, I've had dealings with your company in its former iteration and the current one. I've heard various numbers as to what a successful spill recovery looks like for recoverable oil. Of course we had the extremes of the Valdez, where very little, a single-digit percentage of the oil, was ever recovered. In 2017, what is considered the gold standard, what is considered a silver, and what's terrible with respect to an oil spill recovery rate?
5:10 p.m.
Director, Response Readiness, Western Canada Marine Response Corporation
That's a difficult question to answer, but certainly there are lots of data out there that suggest that mechanical recovery is not always very effective. We have seen instances in which we're highly effective when we're recovering product, and we've seen instances in which we are not recovering a great percentage of the product. We focus on the sensitivities, how we can protect those, and how we can contain and recover oil. Those are our strategies.
5:15 p.m.
Liberal
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
Thank you, Madam Chair.
My first question is for Mr. D'Avignon.
You mentioned that the dependance on hydrocarbons is going to go up by one-third. Is that right?
5:15 p.m.
President and Chief Executive Officer, Business Council of British Columbia
That's correct. The International Energy Agency, in its most recent report, shows that hydrocarbon consumption is going to continue to represent a significant portion of global energy demand, particularly with an emerging middle class, particularly in south Asia, central Asia, and Asia as a whole.
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
What's the baseline? What's the starting number on that?
5:15 p.m.
President and Chief Executive Officer, Business Council of British Columbia
I don't have that information in front of me, but I'd be happy to forward the International Energy Agency's most recent report to the committee.
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
Could you, please?
Do you happen to know what our contribution is currently to the global demand?
5:15 p.m.
President and Chief Executive Officer, Business Council of British Columbia
Globally, the only customer for Canadian fossil fuels is the United States. They are now a net exporter of oil, including an exporter to Canada, in excess of 430,000 barrels per day. We are the fourth-largest supplier of oil in the world, but to one customer.
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
You also mentioned capital investment. I missed your point on that. Were you saying that there was foreign capital investment?
5:15 p.m.
President and Chief Executive Officer, Business Council of British Columbia
If you were to quantify the total capital investment that is placed in Canada by the private sector in any given year.... In 2015, 25% of that capital investment came from the energy sector in Canada. It has since been reduced, given the lower price of oil. It's about 19% today, but at its height it has been 25%. Currently, the entire energy sector, from a private perspective, is just over 10% of the national GDP, and by province it's obviously significantly higher or lower, depending on the basket of energy products.
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
Thank you.
My other question is for Ms. Drysdale.
With regard to your CanaPux—that's a great name, by the way—I know the minister said that there would have to be testing for it to be considered a dry good and that the technology is encouraging, but I think that's just one aspect. You also have to have producers producing it, and refiners with the ability to actually refine it. Has there been any movement in that space? Are you in dialogue with either of those?
5:15 p.m.
Vice-President, Corporate Development and Sustainability, Canadian National Railway Company
We are in dialogue with a number of Canadian producers, all under non-disclosure agreements. We also have had initial discussions with people who could potentially refine it on the other end. At this point, I would say that there is strong commercial interest in the product and in following its development.
5:15 p.m.
Liberal
Gagan Sikand Liberal Mississauga—Streetsville, ON
That's good to hear.
Ms. Moran, I know you got cut off there. If there's anything you want to add to your remarks, you can add that now, and I have a question as well.
5:15 p.m.
President and Chief Executive Officer, Ocean Networks Canada
I think one of the most important things is to actually monitor shipping on the northern coast. One of the biggest risk areas is really from other kinds of ships that don't have to follow the voluntary exclusion zone that tankers do. We have demonstrated over the past six months that tankers are following the voluntary exclusion almost to the letter of the law, but in fact, the other ships actually have a higher risk level. Therefore, we are advocating, as a world-leading observatory, that we should begin to monitor shipping in a much closer way and to provide alerts to prevent accidents. We've talked about response, but the best thing we can do is prevent accidents. We're advocating that robust monitoring be in place to prevent all accidents, particularly in ships that do travel very close to the coast, have high windage, and if they lose power, can readily go aground on the coastline.
5:15 p.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
Thank you, Madam Chair.
First, I want to give some clarification to some comments that Mr. Chong made earlier with respect to Bill C-48 and dealing with disputed marine borders. Bill C-48, just to be clear, does not deal with disputed marine borders. It's a land-based moratorium. I think that was made clear at the last meeting.
I do want to congratulate CN for taking a forward-looking approach, for looking at not just the moratorium we're dealing with and, of course, the possibility of it then moving forward, but also at taking it steps further than that and coming up with new products and new approaches to the impact of this moratorium.
5:20 p.m.
Vice-President, Corporate Development and Sustainability, Canadian National Railway Company
Thank you.
5:20 p.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
With that, I'm going to give you time here, Ms. Drysdale. You're about corporate development; I get that. I know you want this time to communicate the business plan, the approach that you're going to take to attempt to put a positive business approach on all of this moving forward with respect to the movement of this product.
5:20 p.m.
Vice-President, Corporate Development and Sustainability, Canadian National Railway Company
The next key step is really this pilot project we are undertaking. We have gone out to the marketplace to look for an engineering, procurement, and construction firm to help us in that endeavour. We are rapidly advancing that and narrowing in on the chosen provider. As Ross mentioned, we would be gearing up to do a kind of pilot project at some point next year. Our goal is to have a type of demonstration facility, if you will, that would be located at one of our distribution centres in Edmonton. I kind of liken it to a model house in a new condo development, or something along those lines, where people can come and see the product actually being solidified and reliquefied.
We are progressing in our discussions with interested producers. I will say that those who are interested are the ones who are not currently connected to pipelines and who probably don't have much reasonable probability of having a pipeline connection.
In terms of the end market, we've done some initial analysis on our own, and certainly Asia would appear to be the strongest end-market possibility, not only for the bitumen but also for the polymer once it's separated out. There are end markets, certainly, in Asia for that polymer if it's not used in a closed-loop cycle to bring it back.
I would just caution the committee that it's early days. This is really true R and D work, but as we've taken every step in this process, every step has been very encouraging.
5:20 p.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
That said, and looking at the R and D side unfolding and accruing over time, are you working with folks such as the business council? Are they aligning with you with respect to moving in a strategic business direction? Utilizing the resources and as an enabler, as you are, but also within industry, is there a discussion now happening on aligning?
