Proceedings of the Standing Senate Committee on
Energy, the
Environment and Natural Resources
Issue 8 - Evidence
OTTAWA, Tuesday, May 5, 1998
The Standing Senate Committee on Energy, the Environment and Natural Resources, to which was referred Bill S-5, to establish a National Historic Park to commemorate the "Persons Case", met this day at 10:00 a.m. to give consideration to the bill and to consider future business of the committee.
Senator Ron Ghitter (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, the intention was to deal with Bill S-6, to establish a National Historic Park to commemorate the Persons Case. It was our hope to have Minister Andy Mitchell here today. He initially agreed to be here, but his schedule is such that he has stated he would like to appear next week instead. I said that that was fine, although I think we should get on with matters.
I propose that we adjourn matters relating to the bill until next week, at which time Minister Mitchell will advise us as to the government's position. If that is satisfactory to members, we will proceed with the bill.
I also understand that Senator Kenny and Senator Andreychuk are meeting with Minister Copps tomorrow. Whatever comes from that may be useful information. Is that meeting still scheduled to take place tomorrow?
Senator Kenny: No, Mr. Chairman, it is not. We are waiting to hear from the Minister of Heritage. I hope that this committee will not address Bill S-6 until Ms Copps appears before the committee.
We are endeavouring to meet with her. A meeting was scheduled, but it, too, has been postponed. We are actively pursuing such a meeting. Until that happens, my hope is that this committee does not move any further on Bill S-6.
The Chairman: We have asked Minister Copps on two occasions to appear. Two letters have gone to her. We received a reply from Minister Copps indicating that Minister Mitchell would appear, which I took to mean that she would not appear. I am not sure how they divide their responsibilities, but apparently Minister Mitchell is responsible for parks under Minister Copps.
Is that right, Senator Kenny? Is that the hierarchy?
Senator Kenny: I do not profess to be an authority on these matters, but I would not argue with you.
The Chairman: I am at the will of the committee. Do we carry this bill on forever, or do we get it to the Senate in an effort to determine what to do with it? I would like to get it off our agenda.
Senator Taylor: I think it is a courtesy to whoever is sponsoring the bill that we ride along the way they want. Senator Kenny is the sponsor of this bill. If he wants to stick-handle and go behind the net a bit before he skates down the ice, I think we should be prepared to give him the time. I have never seen a committee try to close off discussion in a hurry. Here we have a sponsor wanting more time to get his ducks in a row, and I am prepared to give it to him.
The Chairman: The only thing that troubles me in that context is that there are many third parties waiting for us to do something. We have received representations from outside parties who are anxious for the matter to be dealt with. The community wants development. Proposals are being held back until a determination is made as to what to do with this bill. The NCC is anxious for a decision to be made, and they are looking to us to deal with the bill. I agree with you, but I think it has to be taken in the context of third parties expecting us to deal with this matter.
Senator Butts: If I can change this sports analogy to baseball, I think Senator Kenny should have an opportunity at strike three. We tried twice, so let us try once more.
Senator Cochrane: Senator Kenny, after Mr. Mitchell appears, do you suppose that that will be the end of the matter? He will replace Minister Copps.
Senator Kenny: I wanted to hear from Ms Copps because she had discussed either a walk of honour or a walk of valour -- she referred to it both ways -- that related to the area involved. That is an important consideration.
We heard from the business interests, and they admitted that no planning was going on in the area. Mrs. Piggott said the area suffered from no planning at all. Ms Copps made a speech about six months ago where she described proposals for what sounded to be a very interesting series of walks that would radiate around that area. I do not want to put words in her mouth, but I visualized a walk of heroes. I visualized another walk of authors or poets, if you will, and a walk of politicians leading out, I presumed, from that particular site.
If she has changed her mind, I would like to know. I suspect this committee would also like to know. That is why I have been so keen that we not conclude the hearings on this bill until we have had a chance to hear from Ms Copps.
I was surprised as anyone when the letter came from Ms Copps saying that Mr. Mitchell would be appearing, particularly inasmuch as at that time I was expecting a meeting to take place with her this Wednesday. I still do not know why that meeting has been postponed. I hope to find out what is going on, but I do not know the answer. I would not like us to foreclose the opportunity here in committee.
If there is news or if there is planning on the part of the government for this part of the city, I would like the senior minister responsible to come forward and describe it. If there is not any planning for this part of the city, I think there is an equal obligation for them to say that they have no plans for downtown Ottawa, and we should all know that on the public record.
Senator Cochrane: Is there any reason that the minister is not appearing? Is she busy? Did she give a specific reason? Will we be waiting indefinitely?
The Chairman: She has given us no reason.
Senator Kenny: That is what precipitated trying to meet with her on a personal basis to say, "What is the story?" I do not yet have the answer.
Senator Cochrane: If we went through this bill and passed it, it would have to go to the House of Commons.
Senator Kenny: It would have to go back for third reading. It could sit in the Senate for a long time. The difficulty, then, is that you cannot have a witness appear before you. If the bill is still in this committee, we can have a witness come and tell us more.
Senator Cochrane: If it passes the Senate and goes to the House of Commons, then the minister would have to deal with it.
Senator Kenny: Maybe, or you may find that the developers have more swat in the Commons than they have in the Senate.
Senator Cochrane: I will leave it in your hands, Mr. Chairman.
Senator Taylor: You were talking about the developers and the National Capital Commission literally chomping at the bit to get under way, and we are holding them up. Long before this idea was a glean in Senator Kenny's mind, they had nearly a generation of looking at that piece of land. Why should they suddenly, after 20 years of sitting on their posteriors, suddenly want to develop the land in 30 days or 90 days?
The Chairman: As a strong entrepreneur from Alberta, you know that market conditions vary from time to time. They were asked that very question. They have five proposals before them from the development industry.
Senator Taylor: Senator Kenny wants more time. Time is something we senators have been accused of not having a shortage of. I do not get that excited about letting him have a month or two or three more on the issue, especially since the NCC and the developers of Ottawa have had 20 years. It is difficult for me to be concerned that it must be done right away.
The Chairman: I personally would like it disposed of. We have been on this bill for some time. There has been considerable opportunity for the minister to appear. It does not seem that she will. If Senator Kenny can be persuasive in this matter, that would be great, but I would like to have a sense of finality. I would like to clear it off our agenda by reporting it back to the Senate. This committee has other bills coming before it. I believe that we should move this over to the Senate. If Minister Copps wishes to appear on the bill, she can appear before the Committee of the Whole.
Senator Kenny: With respect, this bill does not interfere with any other work of this committee. All the bills on this list can be dealt with without interference from my bill.
The Chairman: Is there a motion?
Senator Taylor: I move that we table consideration of Bill S-6.
The Chairman: Is your motion to table it indefinitely?
Senator Taylor: Yes.
The Chairman: Is that agreed?
Hon. Senators: Agreed.
The Chairman: That takes care of that bill.
Let us deal briefly with the Washington trip.
Senator Buchanan: In view of the fact that the minister did not appear this morning, Senator Butts and I have agreed that we would ask you to allow us a few minutes to discuss the CERI Conference in Halifax. We will not take up much of the committee's time.
The Chairman: We would be delighted to hear from you on that.
Senator Buchanan: We think it is important that you know what is going on on the East Coast.
The Chairman: We would be very interested to hear your observations.
Senator Buchanan: The CERI Conference was held in Halifax on April 20 and 21. The conference was broken into six sessions. The first was entitled, East Coast Gas Supply; the second, Canadian Markets for East Coast Gas; the third, U.S. Northeast Markets for East Coast Gas; the fourth, Transportation Projects -- From Pipe Dream to Reality. The fifth, Regulatory and Market Issues, dealt with both Canada and the U.S. through the National Energy Board, our offshore board, and the Nova Scotia-Canada Offshore Agreement, which I signed in 1982 and in 1986. It has stood the test of time and is still the number one document in the offshore of Nova Scotia.
The sixth session was entitled Economic and Environmental Development Opportunities and Challenge, and session seven was entitled Opportunities -- Looking into the Future.
I have attended many of these energy conferences from the 1970s until the present, and this was the best I have ever attended. The CERI group from Alberta did a great job of organizing it. They hold these conferences all over Canada.
They had the best presenters to be found in this country. There were people from Central Maine Power. The president and general manager of Mobil Oil, Jerry Anderson, was there, as was Graham Bagnell, project engineer for Rowan Companies, which are doing much of the drilling offshore.
Also presenting were Doug Black, a lawyer from Calgary, and Elizabeth Beale, who is with the Atlantic Provinces Economic Council. She is a very smart lady. She has done a lot of economic research on the offshore. We heard from Paul Bennett, also from Calgary, who is with Mobil Oil. He is vice-president of the Nova Scotia Exploration and Production for Mobil Oil Canada. Glen Booth is the chief economist for the National Energy Board. Michael Bradfield is a professor at Dalhousie University. Mike Broadfoot is from Calgary and is senior vice-president of Engage Energy. Douglas Bruchet was also there; he has extensive experience in public consultation with a variety of groups and organizations. He was an interesting fellow.
James Bujnoch is director of business development for Tennessee Gas Pipeline Company. In the 1980s, Tennessee Gas was one of the major players in the pipeline proposed from offshore Nova Scotia, through Nova Scotia, New Brunswick and Maine to Massachusetts.
Tennessee Gas was the major player in the U.S.; it was TransCanada on the Canadian side. That is now switched. Westcoast Energy is now the major Canadian pipeline player; in the U.S., the major company is Pan Pacific.Tennessee Gas is not involved in that major pipeline, nor is TransCanada. TransCanada PipeLines is contemplating a lawsuit against the Government of Nova Scotia, the Government of Canada and Westcoast Energy because they had a signed, sealed agreement back in the 1980s that they would be doing the project in Canada.
As for Tennessee Gas, there was another interesting development. The Portland pipeline, which goes from Montreal to Portland, Maine, was originally an oil carrier. It is now a natural gas carrier and it has been expanded to take more gas from Alberta. However, it will now merge with the Maritimes & Northeast Pipeline from Nova Scotia, right to Dracut, Massachusetts, and from Portland to Dracut and on into the Tennessee pipeline, they will be mixing our gas with Nova Scotia with the Alberta gas coming down from Montreal to Portland, which is where Tennessee Gas is now a player.
A young lady by the name of Susan Waller, who is vice-president and general manager for government relations for Tennessee Gas, is coming to Ottawa probably in early or mid-September. I have taken it upon myself to invite her to a luncheon in the parliamentary dining room sponsored by the chairman of the Senate Energy Committee, attended by two or three members, along with the Parliamentary Secretary to the Minister of Energy for Canada, and she has graciously accepted.
Next is Nancy Cowan, marketing manager for the Maritimes & Northeast Pipeline, the ownership of which is made up of Westcoast Energy, Mobil Oil, Shell, which has a small part of it, and Pan Pacific out of the United States.
Brian Curtis, whom I just cannot place at all, was there. He was with NOVA for 17 years. Some of you here may know him. He is a pipeline expert.
Next is John d'Ancona. He was a very interesting fellow. He was in the Ministry of Technology. He is from Malta, Durham University, Newcastle-on-Tyne. He was secretary to the Minister of State in the 1960s, then he went into the technology business. He was a very interesting speaker on the matter of natural gas production and transmission, and talked about the United Kingdom.
Next are Charles Darling, president and general counsel of Deep Tech International Inc. in the United States, and Jim Dickey, who is chief executive officer of the Canada-Nova Scotia Offshore Petroleum Board. He is a Nova Scotian and he is doing a heck of a good job.
There are also Gerald Doucet, president and CEO of the Canadian Gas Association; Donald Downing, president of the Coal Association of Canada; Ken Drummond, a geological and energy resources consultant from British Columbia; Peter Fournier, a British Columbian, an economist; and Charles Furey, whose name is still in here but who did not come. The person who replaced him was Dr. Robert Fournier, who was the chairman of the Sable Gas Systems Panel, an environmental panel. I know him personally. I appointed him the first chairman of the Nova Scotia Council on Science and Technology. He is one great guy. When I introduced him, I said the only thing that annoys me about Bob Fournier is that on Information Morning, a program which I listen to when I am in Halifax, he always ends his program with a science question. I said that from now on, I will call him before the program to get the answer because I never know the answer to his questions. He is very thorough.
Next is Doug Gerritts, chairman of the Offshore Trade Association of Nova Scotia. Next is Gordon Hart, senior marketing executive of Shell Canada's natural gas operation. Shell Canada has a part of this play.
Then we have Hector Jacques, probably one of the best-known consulting engineers in Canada. He started a small consulting business in Halifax back in the mid-sixties. He now is head of one of the largest consulting engineers groups in Canada and in the northeast United States. They have offices in the United States and all over Canada, and he is moving now into offices in Europe. He was one of the presenters.
Pat Langan is another interesting guy who made headlines in Halifax after the conference because he was highly critical of provincial governments of Nova Scotia and New Brunswick, saying that if it had not been for their dilly-dallying and fighting and arguing as to who was going to get what, the project would have been well under way long ago. His remarks got a headline story in The Chronicle-Herald. I think he wishes now THAT he had not said what he said, but he said it and it was copied down. He is president of the Maritimes & Northeast Pipeline, and a knowledgeable guy about pipeline construction and operation.
There were also Larry Leblanc, general manager, East Coast operations, for PanCanadian Resources; Doug Lovatt, procurement and materials management expert; Jack MacDonald, a geoscientist from Nova Scotia; and Terry MacDonald, whom I know extremely well, vice-president, system planning, for Nova Scotia Power.
Kevin Madden is director of the Office of Pipeline Regulations in Washington, a very knowledgeable guy. It was interesting to watch the Americans, who were just so pleased to get at a table where he was. Susan Waller sat at a table with myself and a few others, and when he came over and sat down, she said, "Oh, my God, look who is sitting at our table: Kevin Madden. I am so glad that you are at my table." He came over and I did not even know who he was.
I think you people would know David Manning, president of the Canadian Association of Petroleum Producers.
The Chairman: He has appeared before our committee before.
Senator Buchanan: Yes. Denis Marcoux, a chartered accountant, talked a lot about the economics of the situation. He is responsible for supply gas at Gaz Metropolitain, which lost out in its bid to be one of the pipeliners for this gas.
Russell MacLellan, the Premier of Nova Scotia, was there, as was Jim McNiven from Dalhousie University.
Norman Miller, a native Nova Scotian, was the person who started the first oil production offshore Canada, the LASMO production, back in 1990. He is now involved in his own consulting business.
Another interesting fellow, Michael Minkos, was there. He is president of Portland Natural Gas Transmission. He had a slide presentation and that was the first time I heard about this joining together of the PNGTS with our Maritimes & Northeast, where they are going to merge in Portland and then move on to Dracut and then into the Tennessee Gas line. He had a great presentation.
Another participant at the conference was Jerry Norcia, project manager for the Maritime & Northeast Pipeline. Wayne Oliver is another very knowledgeable guy in the natural gas business. He was there, and he is senior vice-president of Reed Consulting out of Boston. Carey Ryan, executive director of our own Nova Scotia Petroleum Directorate, was there as well.
Lawrence Smith was the moderator. He is with Bennett Jones Verchere in Calgary and is also head of the Regulatory and Environment Department.
Other participants were Charlie Steadman, who is general manager of business development with Novagas Canada Ltd. Richard Terrazas is vice-president of business development for M&N Management Company in Halifax, a wholly-owned subsidy of Duke Energy Corporation, which, by the way, is a participant in this whole project. Philip Tsui is an environmental health and safety engineer. Glenn Yungblut is from Ontario, and he is a mechanical engineer.
We had a lot of expertise at this conference. That expertise covered every aspect of natural development, production, pipelines and markets. All together, 350 delegates -- ranging from British Columbia, Alberta, parts of Ontario, Nova Scotia, Boston and Houston -- including Senator Butts and myself, participated.
Senator Taylor: Was Newfoundland represented?
Senator Buchanan: They were not represented.
This was one of the best conferences I have ever attended. The outlook for our Nova Scotia gas is excellent. We have about 24 trillion cubic feet of natural gas offshore of Nova Scotia, of which 4 trillion will be produced immediately at the rate of about 400 million cubic feet of gas per day. Three-quarters of that will go to the New England states and about a quarter will stay in Nova Scotia and New Brunswick. Irving Oil is taking quite a bit of it.
One of the big dangers of this is possibly to our coal industry in Cape Breton. Natural gas, I am afraid, might start to compete with coal.
In all, 2 trillion cubic feet will be added to the 4 trillion cubic feet to make 6 trillion cubic feet within the next eight years. An additional 13 trillion cubic feet is proven and probable, and it will come later on.
You might have heard that this project will last for the next 15 years. No way. This project will continue because there is a lot of natural gas, and there is much more to come.
The Chairman: Is the other pipeline a dead issue now?
Senator Buchanan: Yes, it is totally dead.
Senator Taylor: The use of coal to produce gas is coming on stream now in Virginia and south in the Appalachians. It can be a significant source of gas. You have huge coal reserves going all the way up to PEI. Was there any mention of this? It is called CBM, coal-bed methane. Once natural gas gets to $3 Canadian, it becomes quite economic. That would be one way of using coal.
Senator Butts: There was some discussion of that issue.
I agree with Senator Buchanan about the work done in organizing this conference. I have never been to a conference where a new speaker came up every 15 minutes. Every speaker had 15 minutes, and the conference went from 8:00 in the morning on into the night. I do not think I have ever attended a conference as complete and organized as this one. I got a real crash course because a lot of this is new to me.
The slogan "Pipe Dream to Reality" is, in my view, still half a pipe dream. I do not know enough about the reality.
The atmosphere at the conference was very upbeat. When you came out of Cape Breton, as I did, to attend the conference, the conference was the dream world, not the reality. There is little discussion of this in Cape Breton, the reason being that any politician or leader is afraid to speak about the values of natural gas in a place where everyone makes their living off of coal. That is why Senator Taylor's statement is relevant insofar as there are a few people saying that they can connect to coal-bed methane.
There was a lot of talk about jobs involved in gas projects and the contracts that some companies can get. I was interested in a few of the contracts around the pipeline that were awarded to companies in Cape Breton.
I met a lot of former students from Cape Breton and Nova Scotia who left Alberta and returned to Cape Breton to get in on this program. They were so upbeat about it. In fact, some speakers even dared to mention the end of the line of natural gas in Alberta. They talked about how many more years Alberta would last and about how much of a market would be left for gas.
I was interested in Senator Buchanan passing over Professor Bradfield from Dalhousie. Professor Bradfield was the only nay-sayer in all the panels as he does not think there is enough benefit to Nova Scotia out of the whole gas operation from corporations such as Mobile and Irving. Irving is evidently in on the distribution of the gas, which was disturbing for many of us. I think there was a statement that Irving had associated itself with Westcoast Energy from B.C. on the distribution of the natural gas.
I was the head of a group of people from co-ops who had gone all the way to Alberta to study distribution through cooperatives. They came home excited about this, but at this conference, I do not see that they had anything at all. I think they are the bantams in the big leagues, if we want to stick with the baseball analogy.
I had also hoped that at my own university there would be an education component, but it is evidently all in Halifax. The educational component would relate to welders, welding underwater, and safety in the ocean, which is very different from other natural gas production, even in the Gulf of Mexico, because of the ice, the tides and the depths.
There is training in that respect. The best I can hope for is to get the Cape Bretoners to stop in Halifax rather than going all the way to Alberta.
Those are my impressions. I did not come prepared with many notes because I knew that Senator Buchanan was the authority on this.
Senator Cochrane: Was there an expert on the environment at the conference, senator?
Senator Butts: Yes, there were some speakers on the environment, but when you talk about this on the high seas, I do not know if there are any authorities on it. That is part of the problem. There are no authorities. The most prevalent topic at the time, which might be significant, was the movie Titanic.
Senator Taylor: As a supplementary to Senator Cochrane's question, was there any discussion, in this day and age of selling pollution credits and the fact that you are producing natural gas down there, that you would get any income from selling the credits? You must remember that natural gas is being used in many cases to reduce carbon emissions at the end of the pipeline.
Alberta and Nova Scotia would have common cause because many environmentalists say we are polluting by producing gas and so putting CO2 in the air. Therefore, you are selling the gas because somebody else is reducing CO2. If you go to a North American trading circle, you should be getting paid in Alberta, Nova Scotia and Cape Breton for the allowing the industrial part of North America to reduce their CO2 emissions.
Senator Kenny: That sounds like another trip to California, Mr. Chairman.
Senator Buchanan: The natural gas industry of Nova Scotia now is zero. We do not burn any natural gas.
Senator Taylor: You do not want to give away a right that might be worth a lot of money.
Senator Buchanan: That is right. There was some discussion about it, very little, because we burn up to 3 million tonnes of coal now. The proposal is to reduce emissions from three of our coal-burning power plants by converting to natural gas. Those power plants are located in Point Tupper, in Pictou County and in Dartmouth. There is a lot of concern in the coal industry about that, except for Dartmouth which presently burns oil.
There is no question that a reduction in CO2 and SO2 emissions will occur in those two plants where we now burn coal but not in industrial Cape Breton. Natural gas will be a help. In the future, we will have an area where we can start to trade off with other areas, but it was not really discussed that much.
Senator Kenny: I see an opportunity here for a Senate committee to perform a traditional Senate function which is to reflect the regions back here in Ottawa. We have had two Nova Scotia senators talk about the changing energy environment in their province and region. It comes with the potential of a significant cost in terms of jobs.
I wonder if it would not be worthwhile for the committee to consider holding hearings either in Cape Breton or in Halifax, or both, to examine the questions of coal-bed methane and, through the process of the hearings, to provide more publicity to the opportunities there and also to focus on the question of whether the projects going ahead are in fact employing people from the region and whether they are getting the optimum industrial benefits from this sort of development.
This is a tailor-made issue for a committee like ours to hold hearings for a couple of days, to focus on the issue and focus on employment in the region. By doing that, we could be introducing and drawing attention to coal-bed methane. We could also remind the companies and the developers there that we attach a high priority to local employment. If the region will not benefit from it, we would like to know why.
Senator Taylor: Senator Kenny has a very good request. I am associated with some companies in coal-bed methane in the north-west U.S. The U.S. government subsidizes up to a certain point the production of CBM in the Appalachians and other areas because of jobs. A very small subsidy will kick-start and take an operation from marginal to commercial. The U.S. feels that the trade-off in employment and commerce in the area far outweighs the subsidy, as well as the fact they would be out of pocket for unemployment payments.
Alberta has one experiment and the U.S. has two. We have now found that if we pump carbon dioxide into the coal seam, the coal will sequester the carbon dioxide and release natural gas. You have a double function. You are getting rid of the CO2 by the chemical reaction and it releases the natural gas. That is happening at Joffre, Alberta, because the Alberta Research Council is putting money into that project. We have a lot of coal beds in Alberta.
There is some production of CO2 when you burn the natural gas, but because of the carbon absorbed by the coal, there is a gain of about 75 per cent.
Senator Kenny's idea is very good. We should also look at Virginia. We are going to Washington, but it may be too short notice to see what they are doing with their coal-bed methane and coal reserves to get clean energy.
Senator Buchanan: There is another project which has been near and dear to my heart for 20 years. Alan MacEachen and I signed an agreement with Gulf and Nova Scotia Resources in 1980 to start the first liquefied oil plant, coal plant in Canada. The plant was to use 500,000 tonnes of Cape Breton coal. Alastair Gillespie is getting on in years now but he tells me that the one thing he would like to see before he meets his maker is opening of the Synfuel plant in Port Hawkesbury. It will use up to half a million tonnes of Donkin coal. It is a project that should go ahead. There is no question about it.
One of the ingredients in a coal liquefaction plant is hydrogen. It is one of the ingredients they use as a catalyst in coal liquefaction. What do they strip out of natural gas at the gas plant: hydrogen. Where will they strip it? They will strip it out in a place called Golboro, a few shorts miles from Port Hawksbury where they can use the hydrogen.
I was called to speak at a conference a few weeks ago. The person said: "I hope someone brought up the hydrogen issue in coal liquefaction." With natural gas coming ashore, we can now move with Synfuels. This committee should take another look at the Synfuels project in Cape Breton. It will create jobs in the Strait of Canso; it will use hydrogen from our natural gas and it could be the catalyst to get the Donkin mine going.
The Chairman: As I understand Senator Kenny's proposal, if we had these hearings, we would proceed to look in terms of the impact natural gas would have on the coal industry; is that a fair comment?
Senator Buchanan: One of the gripes in Cape Breton is that no one has reviewed the economic and social effect of natural gas on Cape Breton and the coal industry. A lawsuit was commenced as to why no one has taken a look at the social and economic impact in Cape Breton on natural gas. Russell McLellan said he would spend money now to take a look at it, but there may be something we can do.
Senator Butts: A study has just begun which will review the effects of all of this on Cape Breton. It is probably two years too late, however better late than never.
The Chairman: Who is doing the study, senator?
Senator Butts: It has been tendered out at the request of the Government of Nova Scotia, led by the board of trade and people in Cape Breton.
Following up on what Senator Taylor said about the CO2, would that fit with coal beds that are miles under the ocean?
Senator Taylor: Yes.
Senator Butts: In Alberta, it is under the ground; in Kentucky, it is under the ground; and this is miles out under the Atlantic.
Senator Taylor: I asked the same question of Ken Sinclair, one of the experts. In response to my questions about offshore access, he said: "Well, carbon is sequestered by drilling a hole and putting pressure on it. Whether you drill a hole in the ocean to get coal-bed gas or not would not matter."
Senator Butts: It would be much more expensive.
Senator Taylor: It is more expensive from the point of view of actually drilling a hole, however it is less expensive in that you do not have surface rights to buy up. There are no environmental effects, combined with farmers and people complaining about the increased traffic and roads that result from the development. CBM must be put in every mile.
One of the problems onshore is that you have an environmental, sociological and agricultural effect that you would not have in the ocean. The end cost might not be as high as you think.
I have been in offshore oil and gas for years. If you figure all the costs you have on land with all the adjacent works, lawyers and everything else, offshore is not that expensive. That would make a big deference.
When you do that, the coal in P.E.I. and the whole coal basin would become interesting. You would have a huge area. There are people looking at it already.
Senator Buchanan: What about P.E.I.?
Senator Taylor: We will be getting gas out of coal in Alberta at 2,000 feet.
Senator Buchanan: The Sydney coal fields do not extend into P.E.I.; they extend out to Newfoundland.
Senator Taylor: Coal is not like gas. The geological conditions that go to make up the basin go all the way from offshore Newfoundland to Virginia.
The Chairman: We are on the record and this is good information from a chit-chat point of view, however I would like to get back to Senator Kenny's thoughts.
Senator Buchanan: Senator Butts mentioned employment. I am rather disappointed at the way this is going vis-à-vis employment in Nova Scotia. There is no question that there will be a lot of jobs in the construction of the pipelines, but you people from Alberta know very well that, once the pipeline is finished, the number of jobs to operate the computerized pipelines is very small. They are looking at upwards of 2,000 to 3,000 people to do the offshore and onshore pipelines right to the American border. Once that is done, the situation will be similar to that which took place once the link between P.E.I. and New Brunswick was completed: They had 2,000 men who had nothing to do. That is the danger with the pipelines and then nothing happening.
One of the big items we could look at, Senator Kenny, in your proposal for hearing is first of all the gas plant to strip the liquids out of the gas. That will happen. The plant will be built in Golboro. However, the big employment is in the petroleum industry where the Mobiles of this world are saying, "There is a lot of petroleum, a lot of liquids that will come out, but we propose shipping that out of the Strait of Canso down to the United States to the petrochemical industry there." My question is: "Why?"
In the 1980s, we contemplated our own petrochemical industry in the Port Hawksbury-Mulgrave area where the facilities are there. The Government of Nova Scotia is now starting to say, "Yes." I think Russell McLellan would do well politically if he would put his fists down and say, "Those liquids are not leaving Nova Scotia; they will stay here and we will use them in a new petrochemical industry."
If there is not enough for a petrochemical industry, why is Irving saying they want to buy the gas liquids, ship them to New Brunswick to a bigger refinery there and create a new petrochemical industry there? If they can do it, we can do it in the Canso area. There is high employment in that area.
There were representatives from the Strait Area Development Commission at the conference. We had people there from the Guysborough Development Commission, the Wardens of Guysborough County, Inverness County and Richmond County. The only person missing was the mayor of Port Hawksbury.
Senator Butts: I spent some time trying to determine the definition of generic royalties. This will be a problem in Nova Scotia. I cannot get a definition from anyone. Three times during his speech the premier said "we are going to have generic royalties," and we were all supposed to stand up and cheer, but I could not do that.
Is that a good bargain for Nova Scotia, to get a generic royalty or some other kind of royalty?
Senator Buchanan: The royalty regime they have now is not good.
The Chairman: Do you have a motion that would be more specific, Senator Kenny, in order to help on this?
Senator Kenny: I suggest the committee entrust this matter to you and the staff to put together a proposal of a two or three-day visit to Nova Scotia and suggest the scope of the study, and the scope of the visit, and bring it back to the committee as something definitive. I would be happy to have the chairman and the staff work it out and come back to us with something specific.
The Chairman: I would also like to find out what they are doing in Nova Scotia. If there is a study on going presently, and public hearings, we do not wish to replicate that. Therefore, we should find that out first, to see what is out there on the point you raised, Senator Butts.
Senator Taylor: For every three-day trip, you can do the work here in one day. Looking at the surface of the ground does not tell you that much. It is the ideas and concepts of people from other places who we can bring here that would be a large part of our input.
Senator Kenny: I wanted it on site. There is much to be seen there. People do not notice us here very much, but when we appear in Cape Breton or Halifax they know we are there. People pay attention to us there. We will get some media coverage and we might do some good, whereas here there is no impact.
Senator Taylor: I did not mean we would do away with it, but we can do much of our information-gathering here. You are correct, the public relations which is generated from being out there is very important.
Senator Buchanan: What I have been promoting for the last while is a visit to the oil rigs in offshore Nova Scotia and Sable Island. If we go to Nova Scotia it is important that we do that.
The Chairman: That would be an interesting thing to do.
Senator Buchanan: Absolutely. I have been there many times.
The Chairman: May we move on to other business? Would that be appropriate, colleagues?
Senator Cochrane: Will we put, within this proposal you will draft, something about the employment benefits?
Senator Kenny: Very much so.
Senator Cochrane: I am referring to this particular natural gas issue.
The Chairman: Yes. That is one of the main focuses, if I understand Senator Kenny correctly. We will do that and report back shortly.
Two other matters. When we went to Internal Economy to have our budget approved, they suggested that we did not have anything for communications. I think it is very appropriate that they would suggest that we do not do enough in the communication of our work and that we need a communication strategy. This goes back to some of Senator Kenny's urgings when he was chairman of the committee.
They wished us to have in our budget some element of communication of the work of this committee. They approved our budget but it was subject to my going back to them with a communications budget relative to expressing the work of the committee and the things we are doing. I am not sure as to an amount or what we should be doing more specifically. I am at your direction.
The Clerk of the Committee has prepared a document on our fact-finding mission to Washington dealing in terms of cost estimates and the two possible bills we have coming to us.
Senator Kenny: The bills tend to be less communications-oriented than the studies. The real mileage the committees receive tend to be on the studies that they are doing and they also tend to be much less controversial. I feel there should be money in there. I would not allocate it quite like this. For example, if the committee is going to Washington for fact-finding, there is an extensive Canadian media in Washington. You could tell them: "Look, here is why we are here, here is what we are doing, and here is the benefit for taxpayers to us being here." That is a useful message. If we are doing something in going to Nova Scotia, that would require an extensive media program and you would want the person to be involved in the planning process and laying it all on.
The Chairman: That would be included in the budget. If we went to Nova Scotia, we would need to go back to Internal Economy and at that time we would talk about a communications element.
Senator Kenny: I would endorse the $3,000 proposed here, although I would not suggest you be restricted to spending it on what it is listed for here. There may be other communications items that come up. The committee should have this, but with flexibility to spend it on items which might not be listed here.
The Chairman: In the Washington example, should our agenda include a time when the committee would meet with the Canadian media in Washington? Would that be something we would do? We have never done it up until now, but should we consider it?
Senator Kenny: When we were in Washington with the Banking Committee, in the time slot that we had set aside for a meeting with the Canadian press the President was having his first press conference in six months, so we were not terribly successful.
Having said that, on a slow day you may find yourself on "The National" describing what the committee is doing. You must take your chances, Mr. Chairman. I do not think there is anything we do that we should not be prepared to defend and explain publicly, which is why we should have a budget -- to ensure we do it right.
The Chairman: In terms of the proposal here on the fact-finding mission to Washington, are we being too specific there? Or should we have a broader number, to generally communicate the work of the committee and make it more generic? Then we can come in as we need it.
Senator Taylor: If I can be of help. The Internal Economy Committee allows $5,000 in everyone's budget for communications.
The Chairman: How specific are they, Senator Taylor, when they come to you?
Senator Taylor: They are coming in under the letter "C" for communication, $5,000.
The Chairman: They are not being more specific?
Senator Taylor: No. You are hitting a good time, when everyone is in the mood for it. If you put $5,000 on there, I am almost sure it will go sailing through. The idea is, as you said, the public has not been aware of what the Senate does.
There is no effort being made to try to control it, but $5,000 budgets are what they are roughly dealing with.
Senator Kenny: The intention is for each committee to work out its own plan and to do it the way it sees fit.
The Chairman: On that basis, we could put in the $5,000 budget for such matters as a fact-finding mission to Washington, the bills and future studies.
Might we then get the approval of the committee to do that?
Senator Kenny: So moved.
Senator Taylor: I second the motion.
The Chairman: All in favour?
Hon. Senators: Agreed.
The Chairman: The motion is carried.
The next order of business is by way of referral: The trip to Washington. The agenda is taking shape nicely.
Those of you who were with us in Washington three years ago will recall our meeting with the head parks gentleman on the privatization of their national parks. In terms of that general approach, we have a bill coming to us shortly relative to the Canada Parks Act. It might be interesting to include in our agenda some time with the Washington parks people so that they can help us with our bill.
The intention is that we would all get into Washington on Sunday, May 31. We would begin our work on the Monday morning, first thing, carrying through until the end of the day Wednesday. We would try to incorporate some free time in between so that Senator Buchanan can take us on the annual tour of Congress. Our last night would be Wednesday, and you could then make arrangements on the Thursday morning to come home. We were thinking of a debriefing breakfast on Thursday morning, depending on the flights out. It is a fairly energetic agenda. It will be very stimulating.
Senator Taylor: I am interested in the northern hemisphere trading pollution credits with the southern hemisphere -- in other words, granting money to the Amazon for not burning trees or to Africa for not levelling developments. A great deal of the developing world is raising hell with their environment, the same way we did 100 years ago. If there is any way of forestalling that, it may be paying the Brazilian natives or Zambia or Zimbabwe to leave a forest or wildlife. Is there anyone in the U.S. who we might want to interview? It is not a form of foreign aid; it is a business-type of arrangement with the developing southern hemisphere so they do not make the same asinine mistakes. It goes into foreign aid and development. It is a move to the future and something we could look at.
The Chairman: Certainly.
Senator Kenny: Under upcoming business, I notice the Canadian Parks Agency Act is coming up, and I predict it to be controversial. It would be useful if we had some background, particularly on where the unions have been coming from on this and on the employment aspects of it, as well as what parliamentary control there will still be on national parks if an agency goes ahead. It looks to me like it is slipping out of our grasp. I am flagging that area for the committee. We might want to look at it carefully, perhaps even considering an amendment if there is not sufficient parliamentary involvement in the new parks set-up.
I have trouble seeing the benefits in an agency, other than many employees who lose their fringe benefits, is what I am suspecting.
The Chairman: That is going for clause-by-clause tomorrow. We can circulate the presentations given to the House committee.
Senator Kenny: There are other potential agencies watching what is happening with this one. Revenue Canada, for example, is on the list.
I have two other brief items. I wrote you in the spring about my experience with the International Energy Agency. They described how, in the event of a crisis, western Canada is in good shape but eastern Canada may have real supply problems. At some point, I think it is worthwhile for this committee to call before it the officials responsible for emergency planning to look at what would happen in the event of a crisis. It is clear that, as far as the Sarnia pipeline goes, we are in good shape, but we are classified as a net exporting country under the International Energy Agency. Therefore, in the event of an oil shock, we would be required to increase our exports. If you are in western Canada, that is not necessarily a big problem, but if you are in eastern Canada, there is no oil coming onshore and nothing will be coming on from Hibernia. All oil from Hibernia will go down to the Gulf states. We could find Montreal and the Atlantic region left to certain vagaries. We think of ourselves as being energy self-sufficient. Collectively, we are, but parts of the country are not. We should have a policy that differentiates along the line that we can ship our own oil and have a policy for the part which is truly self-sufficient and consider a reserves policy. The International Energy Agency requires countries that are not self-sufficient to keep a 60-day oil reserve to protect them in the event of a shock. We are exempted from that because, as a country, we are on balance an exporter. That is cold comfort if you come from New Brunswick or Nova Scotia or P.E.I. or Newfoundland. I think we should address that at some point.
The Chairman: When was that letter written?
Senator Kenny: The committee was good enough to send me over to the IEA.
The Chairman: It was in that correspondence?
Senator Kenny: I can send you another copy of it, if you like. I came back saying that all of the IEA's information was given to them by government officials, and I felt someone had pulled the wool over their eyes. Perhaps I am wrong. However, I think it would be worth this committee spending a few hours making up its own mind about whether half of the country is vulnerable in an oil shock.
The Chairman: That would be fascinating.
Senator Kenny: The next item I wish to discuss is Bill S-7, the Alternative Fuels Act. I have been putting questions on the Order Paper asking each government department to show in some detail how they are conforming to the act. Some departments are doing very well and some, such as the Department of the Environment, are doing terribly. It struck me that we should get an abstract of how the departments feel they are doing and perhaps invite two or three good departments to appear as one panel, spend an hour with them, and two or three of the worst departments to appear as another panel. I think the committee could accomplish the update in one morning's hearing with two panels. It would highlight the fact that some departments seem to accommodate this bill easily and others seem to be dragging their feet.
We have the data available now because all of the departments have answered for the last fiscal year. I have put new questions on the Order Paper dealing with the gaps in their answers. Picking two or three good departments and two or three bad departments might be an interesting contrast and might poke the system into responding.
The Chairman: Please send a memo to our researcher about that. I think it would be a good idea to follow up on that.
Shall we have Minister Mitchell appear before the committee next week?
Senator Kenny: I have a feeling he is not coming next week.
The Chairman: What if he is here?
Senator Kenny: If he is, we deal with him, but I do not think he will be here.
Senator Butts: Do you think Minister Copps will be available?
Senator Kenny: Senator Hervieux-Payette arranged the meeting with Ms Copps. I was advised by her office that the meeting was on, and then I was advised that the meeting was off. I have called her, but she has been in meetings in Montreal. I expect to see her today, so I do not know the answer.
The committee adjourned.