moved that Bill C-46, An Act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, be read the second time and referred to a committee.
Mr. Speaker, it is a privilege and an honour for me to serve the constituents of the great Kenora riding and to proceed with the debate on pipeline safety.
One of our country's greatest success stories is Canada's extraordinary ability to develop our natural resources through the use of new technology and innovation. Whether we are unlocking the incredible energy potential of the oil sands, mining uranium to generate nuclear power, or developing our vast hydroelectric power resources, Canada's energy industries continue to rise to the occasion.
As Canada's production of energy resources grows, we have an opportunity to export more of our energy products to international markets with growing demand. The choice is simple: build the energy infrastructure to reach these markets, or leave these products in the ground.
Expanding our energy trade in not merely a priority for our government, it is an imperative. We recognize that for this opportunity to be realized, we must ensure that the public is confident in the safety of our infrastructure.
Through our responsible resource development plan, our government strengthened environmental protection, enhanced aboriginal consultation, and provided predictable timelines for regulatory review. This included bringing forward regulations that ensure that companies, not taxpayers, are responsible in the event of an incident.
There are over 73,000 km of federally regulated pipelines that criss-cross our country. They deliver oil, natural gas, and petroleum products from coast to coast to coast and beyond our borders. These energy products heat our homes and our workplaces. They power factories and farms. They fuel cars, buses, trains, and planes. They transport us across town, across the country, and around the world.
More specifically, in 2013, Canada produced over 3.5 million barrels of oil and 13.7 billion cubic feet of natural gas per day. The vast majority of it, over $100 billion worth, was shipped by pipeline.
While the economics themselves tell a compelling story, we have been clear that if projects are to proceed, they must be proven safe for Canadians and safe for the environment. In fact, more than 99.999% of petroleum products, going through more than 72,000 km of federally regulated pipeline between 2008 and 2013, was transported safely. Much of the credit for this solid track record rests with our stringent regulatory requirements and the excellent work of the National Energy Board.
Companies operating pipelines must anticipate, prevent and manage potentially dangerous situations associated with their pipelines. They must develop programs to address safety issues, deal with emergency situations, manage the integrity of the pipelines, educate the public and protect the environment.
The National Energy Board reviews and audits all of these measures. Although the pipeline safety record is impressive, our ultimate goal is zero incidents. That is the purpose of this bill. The pipeline safety act seeks to further improve Canada's record by modernizing the National Energy Board Act.
This legislation would send a clear signal. Our government would be fulfilling our commitment in the Speech from the Throne to have a world-class safety system that enshrined the polluter pays principle in law.
We are determined to reduce risks to public and environmental health and safety as we capitalize on Canada's energy wealth to create jobs and prosperity for Canadians. This ongoing commitment to safety and environmental protection is part of our plan for responsible resource development. The plan is a continuous process of finding new and better ways to improve our world-class regulatory system.
This legislation represents the next step in our continued process of strengthening Canada's pipeline safety system. It would build on previous pipeline safety measures that gave the National Energy Board new authority to levy administrative monetary penalties and to increase the number of NEB inspections and audits. The pipeline safety act would go even further. In other words, we would build on that 99.999% safety record for more than 72,000 kilometres of federally regulated pipelines.
Our objective here is to ensure that we have a world-class, in fact, elements of it world-leading, pipeline safety system. It would be built on three pillars: one, prevention; two, preparedness and response; and three, liability and compensation.
The pipeline safety act would deliver on our pledge to enhance efforts to ensure that aboriginal peoples are engaged in all aspects of pipeline safety operations.
Let me explain each of these improvements in greater detail.
First, we will look at the preventive measures. In order to develop our resources responsibly, we need to do everything we can to prevent incidents from occurring. We will be asking the National Energy Board to provide direction on using the best technologies available for building and operating pipelines. Technologies continue to improve, and the government is committed to ensuring that every project is environmentally sustainable.
As an additional preventive measure, the act sets out the National Energy Board's powers related to audits and inspections. It stipulates that companies have a legal obligation to respond to any requests the board may have in relation to such audits. To protect pipelines from accidental damage, the National Energy Board will strive to align federal and provincial pipeline safety zones.
Companies must inform the authorities and obtain approval before digging or building in the safety zones. This safety measure will prevent damage to pipelines.
We will also take action in terms of preparedness and response measures. We are strengthening requirements, particularly financial requirements, to ensure that companies are able to deal with an incident, if necessary.
The pipeline safety act enshrines the polluter pays principle. The bill requires companies operating pipelines to hold a minimum level of financial resources for responding to oil spills, set at $1 billion for companies operating major oil pipelines. The companies must demonstrate their financial capacity and a portion of those financial resources must be readily accessible to ensure rapid response to any incident.
The bill includes other measures. It gives the National Energy Board the authority to take control of incident response and cleanup in exceptional circumstances. This means that the government will provide financial security to ensure that the NEB has the necessary resources to pay for the cleanup costs. If a company is unable to pay damages to those affected, the government may establish a pipeline claims tribunal to streamline the complaints process.
In both cases, the legislation expands the NEB'S authority to recover costs from the companies if it is called to respond. Canadians can rest assured that every incident will be dealt with properly and that taxpayers will be protected.
I want to emphasize the government's commitment to working with aboriginal communities. Together with communities and the industry, we will develop a strategy to increase aboriginal participation in pipeline safety measures.
I also want to emphasize the government's pledge to work with aboriginal people in a way that protects the local environment and respects ancestral treaty rights.
The third key area or pillar covered by the legislation is liability and compensation. In this regard, we are world class, if not world leading. Building on companies' unlimited liability when they are at fault or negligent, this legislation would implement no-fault or absolute liability for all companies operating pipelines. For major oil pipelines, the figure would be $1 billion. What this would mean is that pipeline companies would be responsible for damages, regardless of what happened, who caused it, or how an incident arose. This is a standard that would leave no doubt.
The pipeline safety act would provide government with the ability to pursue pipeline operators for the costs of environmental damages. The legislation would also give the NEB authority to order reimbursement of spill cleanup costs incurred by governments or individuals. Companies would bear the full cost of cleanup and compensation.
Also of significance, the legislation would ensure that companies would remain responsible for their abandoned pipelines in perpetuity. In the event of an incident, operators would cover all costs and damages related to their pipelines, even if they were no longer in use. This would reassure landowners that they would never be in a position where a pipeline would become their responsibility.
As well, the act would expand the board's authority to recover its own costs for stepping in and taking charge if industry failed to adequately respond to an incident. Again, operators would be held financially accountable for costs and damages.
Tally up these amendments and the message is clear. The Government of Canada will ensure that Canada's pipeline safety system is world class, that first nations are involved in pipeline safety operations, and that taxpayers are protected.
The oil and gas sector is vitally important to the lives and livelihoods of Canadians, contributing 7.5% of our country's gross domestic product. Canada sold $117 billion in energy products to the world in 2013. That is more than one-quarter, 27%, to be precise, of our country's merchandise exports.
While we have an enormous endowment of petroleum resources, we have only one significant export customer. One hundred per cent of our natural gas exports and 97% of our oil exports currently go to the United States. This relationship has served both countries well and will continue to do so in the future.
However, it is clear that Canada will need to find new markets as Canadian and United States' oil and gas production grows. There are incredible market opportunities, particularly in Asia and Europe. In Asia's case, the International Energy Agency forecasts that by 2035, the world will need one-third more energy than is being consumed today. The rise of China and India, among other emerging nations in that part of the world, is propelling the bulk of that demand.
Although we are making progress toward developing alternative and renewable energy sources, according to the International Energy Agency, by 2035, fossil fuels will still be meeting three-quarters of global demand.
Canada's energy sector can contribute more to our economy and global energy security, but only if we build the pipelines to transport energy to markets, including the domestic market.
Our country needs to develop a new energy infrastructure to diversify its markets and seize this unprecedented opportunity. This is critical if we want Canada's energy sector to prosper and stimulate our economy in the future.
The economic benefits for Canadians would be enormous. According to the International Monetary Fund, building new energy infrastructure would boost Canada's GDP by an additional 2%. That is equivalent to $1,000 for every man, woman, and child in the country.
First nations communities are especially well positioned to benefit from responsible energy development. Many of the existing or proposed energy resources and infrastructure projects are located proximal to their communities, and over the next decade, hundreds of major resource projects worth more than $675 billion are planned or currently under way.
As technology evolves, Canada's oil sand reserves could double to over 300 billion barrels to become the largest reserve in the world, leading to an even greater opportunity in the future for Canada.
Likewise, Canada's marketable natural gas resources are estimated to be up to 1,300 trillion cubic feet. These are incredible reserves. That is not only enough to meet our domestic demands for over 200 years at current production rates, but to meet the burgeoning demand from markets like Europe and Asia over the medium term. That is before we have even considered offshore gas reserves and new discoveries potentially revealed or realized through fracking.
According to the Conference Board of Canada, between 2012 and 2035, the natural gas industry could invest over $386 billion in Canada, almost half of it in British Columbia.
As global energy markets change, Canada also needs to change in order to unlock this potential. Other countries are moving quickly to capture growing energy markets in places like China and India. We cannot lag behind if we want to continue to make the most of our energy resources.
We have a world-class and, in some cases, unique regulatory system to monitor this sector. This legislation further strengthens the regulatory system. It sends a message to Canadians and international clients that pipeline safety is paramount to Canada.
If we continue to innovate in the technology sector and remain committed to working constructively with aboriginal groups and protecting the environment, we will then have all the elements needed to ensure Canada's place as a world leader in responsible energy development.
Furthermore, the government is committed to ensuring that Canada's pipeline safety system is a world-class system that Canadians can trust. We will not be satisfied with a system that is almost perfect; we want absolute excellence.
The legislation we are debating today builds on our world-class safety regime, but the job is never done. We will continuously examine the pipeline safety system to better protect Canadians and the environment. We are striving for zero incidents. We will get there by maximizing advances in technology and innovation.
We can take inspiration from Sir Henry Royce, the English engineer and car designer who co-founded Rolls Royce Company. He built a dynasty in his quest for perfection. His motto was “Strive for perfection in everything you do. Take the best that exists and make it better.” That remains our goal and our focus as we continue to develop and transport Canada's natural resources responsibly.