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Standing Senate Committee on Energy, the Environment and Natural Resources report Now or Never: Canada Must Act Urgently to Seize its Place in the New Energy World Order.

Debates of the Senate (Hansard)

1st Session, 41st Parliament,
Volume 148, Issue 117

Wednesday, November 7, 2012
The Honourable Noël A. Kinsella, Speaker

 

Study on Current State and Future of Energy Sector

Fourth Report of Energy, the Environment and Natural Resources Committee—Debate Adjourned

The Senate proceeded to consideration of the fourth report of the Standing Senate Committee on Energy, the Environment and Natural Resources, entitled: Now or Never: Canada Must Act Urgently to Seize its Place in the New Energy World Order, deposited with the Clerk of the Senate on July 18, 2012.

Hon. Richard Neufeld moved the adoption of the report.

He said: Honourable senators, I wish to rise to make a few remarks about the Standing Senate Committee on Energy, the Environment and Natural Resources report Now or Never: Canada Must Act Urgently to Seize its Place in the New Energy World Order. It was deposited with the clerk on July 18, 2012, by agreement of the Senate. It was a report that was chaired by Senator Angus, well known to everyone in this room as a senator and a chair who did a very good job. We started working on this report in 2009, went through an election and a few other hiccups and finally finished it in 2012.

Obviously, when one starts talking about energy as it relates to Canada and the world, there is an awful lot of information to be digested and a lot of information that we wanted to get out to people across Canada about Canada's energy resources.

I would like to thank Senator Angus again for his good work in moving this committee forward. It was a unanimous report. This is not always easy — something that takes that long and can be very controversial — and I think he did an astounding job in accommodating the viewpoints of everyone on the committee.

We were helped greatly by two people who helped us write the report. After we had all this information and started looking at how we develop a report that would be readable and that people would take an interest in, it became pretty hard to figure out how we would actually move all the information that we had received from 2009 to 2012 into a report that could fit on one shelf. We enlisted the help of Peter Tertzakian, a well-known person from Alberta who has a vast knowledge of the oil and gas industry and has written a number of books about it, and a writer by the name of Sebastian Gault to help us with the process. They worked very hard at that, within some very short time frames, and brought it down to a 65-page report. I think that is probably unheard of, to try to encapsulate everything into 65 pages that are very readable. I would encourage all honourable senators, if they have some time and are not too tired after reading the new rules, to read the report to find out some very good information.

I would also like to thank our clerk and staff from the Library of Parliament who did an awesome job of keeping up with all that work from 2009 to 2012.

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We started this report when I came to the Senate and became a member of the committee. A number of us brought forward the idea that we need to start talking to Canadians about our energy resources and how valuable they are to all Canadians — not just to some Canadians — and to the world. We need to involve more people in what we do, how we do energy in Canada, how we look after the environment in Canada and how we look after all of those things that would be attached to developing oil and gas reserves across the country, from coast to coast to coast, because it truly is from coast to coast to coast.

We thought we would try to produce a report — and that is why we got it down to 65 pages — that would be easy for the public to read, if in fact they wanted to. They could understand it; it is not written in legalese. They could understand more about our energy.

I realized this from when I was the Minister of Energy and Mines in British Columbia for eight years. I was fortunate enough to hold that post for that long. Although I was quite involved with the oil and gas industry because of where I lived all my life — it was not new to me — many people in the Lower Mainland, even in British Columbia, did not understand that we had an oil and gas industry in British Columbia. The knowledge and the literacy about the subject were not there.

I brought the idea to the table with Senator Angus and others, as did some other senators, that we had to provide something that we could distribute to the public so they could become more knowledgeable about oil and gas.

People do not realize how intertwined the oil and gas industry is in our everyday lives, regardless of who we are or where we live. It is something that we take for granted because we have become accustomed to it. People generally do not know about the industry. Other than when they drive up to the gas pump, fill their car at the price of $1.35 a litre and they are upset about that, they do not realize how much more the oil and gas industry is involved in their lives.

I would like to read for the record a few things about how the oil and gas industry is intertwined in our everyday lives.

I talked about fuelling up a car. From where I come from, people often talk about wanting more asphalt and better roads. One can see a lot of asphalt driving around Canada. Good roads are the bottom of the barrel; the bottom of the barrel of the oil is the asphalt. There are those who think that if on Friday afternoon we do not have an oil and gas industry that by Monday everything will be fine, but the world does not work that way.

Tires on cars and skis — Senator Raine will understand skis — are made from oil and gas. Crayons are, too. When we buy the four-litre jugs of milk from the grocery store, the containers are plastic. That plastic comes from oil and gas. Water pipes, roofing shingles, golf balls — for those who play golf — fishing rods, shampoo, hand lotion, linoleum, soft contact lenses, food preservatives, disposable diapers, make-up, lipstick, fertilizer — almost everything one can think of has some involvement with oil and gas.

Senator Tkachuk: We can't get it from wind.

Senator Neufeld: One could get some of that from wind; one could try.

Regardless, it is involved in our lives in a way that most people do not understand or maybe do not appreciate.

The difficulty of trying to deal with oil and gas in an environmental sense is also very difficult. We try to do that.

The report lists 13 priorities. If I have time, I will get to a few of them. However, I would suggest that if honourable senators want to look at the report, please look at those 13 priorities. They are interesting and straightforward. I also encourage other members of the committee to stand up and speak to the report. I am sure they will. I know that the deputy chair, who was there through the whole development of this report, wishes to speak and others would also like to speak as well.

Honourable senators, I wish to provide some statistics about energy in Canada and how fortunate we are to have the abundance of energy that we do. That is what makes our lives and living in Canada so great. If we look around the world and at countries that do not have energy, we see a totally different lifestyle than we see in Canada, where we have energy at our fingertips. That energy is relatively cheap, depending on the region of Canada in which one lives. It is cheap energy compared to other places in the world. We are fortunate to have that.

The following comes out of Europe; it is not a Canadian statistic. The International Energy Association is a think-tank in Europe that focuses on energy. The IEA projects that the global demand for oil will rise by one third from 2010 to 2035. In 2010, we consumed about 85 million barrels of oil a day.

China and India will account for 50 per cent of that growth. When one takes the population in China and India and starts thinking about those people wanting to live the same lifestyle and having the same things that we enjoy in Canada at relatively cheap prices, they will need to access that much more oil.

Fossil fuels will remain the dominant supply for decades to come. That is envisioned by any organization that has any knowledge about oil and gas. We will continue to use fossil fuels.

We will continue to use fossil fuels in different ways, as technology teaches us how to use it differently, which it has over the past decades. We use fossil fuels much differently today than we did 20, 10 and 5 years ago. Technology will continue to help us. In fact, when one looks at alternative supply and energy-efficiency gains from technology, that will not offset the demand of increasing consumption by one third by 2035. Oil and gas is with us for a long time; we must learn how to use it differently.

World production in 2011 was 86.5 million barrels a day. Of that, Canada is ranked sixth in the world. When I say we have an abundance of oil and gas, I mean it. That certainly shows up. We do not hear much about Canada when it comes to those things — we hear about the Middle East, Venezuela and others due to the amount they produce— but Canada is sixth in world production at this time.

For proven reserves in Canada, we are third. "Proven reserves" means that oil and gas and fossil fuels can be accessed with today's technology and at the rates the market will bear for that product. We are third in the world at 173 billion barrels of oil. Saudi Arabia is the leading supplier at 260 billion barrels of oil and Venezuela has a supply of 211 billion barrels of proven reserves, which are those I have spoken about. We also have unproven potential in the oil sands of an estimated 315 billion barrels. That would put us at number one. There are an awful lot of fossil fuels in Canada, and we should be accessing them to continue to be able to live our lives as we live them today.

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With respect to greenhouse gas emissions from the oil sands, there is a lot of talk about greenhouse gas emissions. I appreciate that we have to look at that carefully and decide how to deal with that, but 6.9 per cent of Canada's total greenhouse gases comes from oil and gas, and the oil sands produces 0.1 per cent of greenhouse gases globally. Honourable senators will hear a lot about greenhouse gases from one of the members of our committee.

Canada is third in natural gas production, with 70 trillion cubic feet of proven reserves and a further potential. The 70 trillion cubic feet is proven reserves that one could produce today at the price today, although that price is very depressed and has been for the last couple of years. We know there is 70 trillion cubic feet of reserves, but the unconventional potential is 1,304 trillion cubic feet with today's technology, and that deals with shale gas and shale gas alone.

The Hon. the Speaker pro tempore: I regret to inform the honourable senator that his time is up. Is he prepared to ask for more time from the chamber?

Some Hon. Senators: Five more minutes.

The Hon. the Speaker pro tempore: Five more minutes. Please continue.

Senator Neufeld: That is what is driving the LNG proposals on the west coast of British Columbia.

So honourable senators know, when I was minister in British Columbia at the end of 2007 and early in 2008, we had approved in the province an LNG import terminal in Kitimat. That is how fast the advent of shale gas took place. That has now changed to an export terminal, with about five more proposed to be built on the West Coast of, all along the coast of the U.S. and also on the East Coast of Canada. There is a lot of natural gas, and it is the cleanest burning fossil fuel we know today. It will take the place of coal and electricity generation and I would assume modes of fuel to a great degree, and we see some of that happening on the East and West Coasts now.

Canada is third in hydroelectricity production and has significant potential in wind biomass and geothermal. We are often told that we are energy hogs and that we put too much greenhouse gas in the air. We are always being chastised — I am familiar with this — by Europeans, and we never respond and talk about how clean our energy sources are, especially electricity energy sources across Canada. We have 75 per cent clean energy production in electricity all across Canada. That is surpassed only by a few countries around the world. Most of them still burn a lot of coal.

I use one example: Denmark. In British Columbia, we are always being compared to Denmark. Why do you not do what Denmark does? Look at all the wind generation they are building. Yet when I checked out Denmark, I found they are still developing 50 per cent of their electricity with coal. They are building windmills, but on top of that, their price per kilowatt hour is 35 cents, compared to an average in Canada of probably about 9 cents.

When we hear these kinds of things, we should always be proud of Canada. I am proud of Canada, and I always talk about how great Canada is.

Some Hon. Senators: Hear, hear.

Senator Neufeld: I think all of us should be doing that. Are we perfect? No. Can we do better? Yes. Should we do better? I believe we will, as technology takes us there, but we should not be one bit unhappy with how Canada does things today because we are leading in the world.

I would like to provide a few more statistics, honourable senators. In 2011, energy brought in approximately $165 billion, or 10 per cent of the total Canadian GDP. There are 294,000 direct jobs, or 2 per cent of the total Canadian employment, in our oil and gas industry. Capital expenditures in oil and gas extraction were $55 billion. Total government revenue — that is the provinces, territories and the federal government — was approximately $26 billion. In 2008, energy services stock represented approximately 27 per cent of the value of the Toronto Stock Exchange, second only to financials at 30 per cent. It is significant in our lives, and all of us should know it.

I will end with a quote from the conclusion of the report. I did not get to any of the priorities, but honourable senators can read about them. I quote:

If Canada is to successfully meet these challenges, there is an urgent need for us to change. Change means diversifying our markets. Change means innovating. Change means consuming energy efficiently. Change means improving our environmental performance. Change means earning social license. Change starts with each of us as energy citizens.

(On motion of Senator Mitchell, debate adjourned.)