Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 7 - Evidence - October 24, 2006
OTTAWA, Tuesday, October 24, 2006
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:05 p.m. to review the Canadian Environmental Protection Act (1999, c.33) pursuant to section 343(1) of the said act.
Senator Tommy Banks (Chairman) in the chair.
[English]
The Chairman: We are continuing our inquiry into matters having to do with the efficacy of Canadian Environmental Protection Act and, in particular today, the way in which the Canadian Environmental Protection Act deals with or fails to deal with, perhaps, as may be the case, the questions of mercury in our environment.
We have with us Justyna Laurie-Lean, from the Mining Association of Canada; Victoria Christie, from the Canadian Electricity Association; George White of Sherritt International on behalf of the Coal Association of Canada — a company dear to my heart, as they have a large presence in Edmonton; David C. Adams, from the Association of International Automobile Manufacturers of Canada; and Mark Nantais, from the Canadian Vehicle Manufacturers' Association.
Ladies and gentlemen, first, I welcome you on behalf of the committee. We are delighted you have taken the time to be with us this evening. I presume you have tossed a coin and decided who will speak to us first. We want to hear from all of you with alacrity to make clear whatever you would like us to hear and to allow time for questions. I will use a reasonably sharp knife — I am sure you have been instructed in that by the clerk. Please proceed.
Mark Nantais, President, Canadian Vehicle Manufacturers' Association: On behalf of the Canadian Vehicle Manufacturers' Association, thank you for this opportunity. I am pleased to provide some perspectives from the member companies of the Canadian Vehicle Manufacturers' Association on the efficacy of the Canadian Environmental Protection Act. I hope you received our presentation in both English and French. I will use that deck of slides as a guideline for discussion.
I want to start off with a context setting slide as it relates to environmental leadership in our manufacturing facilities as well as our products, to give you that perspective. We have reduced emissions from volatile organic compounds, VOCs, from our assembly plants by 50 per cent on a kilogram-per-vehicle basis. We were the first in Canada to fully integrate the ISO 14001 environmental series or environmental management into our assembly plants and the Automotive Parts Manufacturing Pollution Prevention Program. In my view — and it is hard to dispute — this program is the most accomplished pollution prevention program, to the tune of eliminating or reducing 430,000 tonnes of toxics and other environmental contaminants from our assembly plants since 1992. As a result of many subsequent years of investment in energy efficient technologies, equipment and manufacturing processes, we have very low energy intensity in terms of vehicle assembly.
On the product side, you may have read recently and you may be well aware of the fact that the CVMA member companies as well as the Association of International Automobile Manufacturers signed a voluntary agreement to reduce greenhouse gas emissions from vehicles by 5.3 million tonnes in 2010. We fully intend that we will meet that requirement. The program includes many things that you would not otherwise get from regulation.
We are often figured in by means of total transportation, in terms of greenhouse gas emissions, at 30 per cent but our contribution is about 12.5 per cent. New cars are 1 per cent. When you take new cars even on a smog-related basis, we are one tenth of 1 per cent, by virtue of the stringent Tier 2 emission standards we have adopted. We will talk about that in the context of CEPA as well.
The other thing that will be of interest is the program that CVMA member companies are about to launch on the collection of mercury switches in vehicles across Canada. The program emulates the U.S. program that is now in place and is proceeding successfully. While a bit dated, we were one of the first ones to take chlorofluorocarbons, CFCs, out of mobile refrigerants in terms of stratospheric ozone.
How much time is allotted for each speaker?
The Chairman: I do not want to constrain you with an absolute number, but if you were each to speak for 10 minutes, for example, that would consume an hour. That would leave us something less than an hour, in the best of circumstances, to talk to you. We would rather that the balance were a little bit the other way around. Your suggestion, Mr. Nantais, of using the deck as a guide rather than reading through it would be useful.
Mr. Nantais: As it relates to vehicle emissions, CEPA does a couple of key things. Not only does the act have the power to regulate vehicle emissions themselves in terms of smog relating emissions, but CEPA also took a stance or posture that regulates fuels. What is so critical about that is that it takes us to what we call a total systems approach where the advanced technology systems in terms of emission controls are supported by appropriate fuel quality in the marketplace. Without that, we would not be able to receive the optimal emission reductions that those systems are capable of. That posture under CEPA is important, and has been since it was introduced in 1999.
There is also the VOC agenda in terms of vehicle emissions and there are things on road vehicles that are very important to reducing overall emissions in Canada that are not subject to Canadian Environmental Protection Act.
The Chairman: Pardon my interrupting you. We have decided to approach these matters in a focused way. I should explain to our guests. We are charged with carrying out a broad and beautiful examination of CEPA. We have determined that in the time we wish to spend on it, which is not measured in years, we cannot do that.
Therefore, we have taken three tiny segments of concern, and we will look at those segments in a highly focused way and follow them deeply. Those three segments are, first, mercury, and how CEPA deals with it; second, perfluorocompounds, PFCs, and how CEPA deals with them, because mercury is an element, whereas we make PFCs and they would not otherwise exist; and the third question, which we will address separately, is smog and similar emissions, particulates and the like.
We may want to speak to all of you on all of those subjects, but not now. Today we want to concentrate specifically on mercury, and only on mercury, as opposed to the overall emissions questions you have begun to address. Please correct me if I am wrong.
Mr. Nantais: You are absolutely correct. Let us turn to slide 6, which speaks specifically to mercury.
Our industry has been proactive in addressing mercury. Mercury was used, as you may well know, in numerous industrial applications because of the conductivity of that material. Mercury is still for sale legally worldwide. We have now entered into a phase-out program on mercury switches. We will expand the program to include anti-lock braking system, ABS, modules. These braking modules also contain small mercury switches. We hope to have the program up and running by the end of this year. It is important that we focus on older vehicles, because we have phased out or designed out mercury switches as of January 2003. Older vehicles will certainly be our concentration.
We have also talked with Environment Canada in regard to their most recent announcement in terms of treating mercury as a pollutant. The draft working document, in our view, fails to comprehend the full value chain. In other words, what is necessary in the value chain to ensure that we not only collect these mercury switches effectively and efficiently but that the full value chain, the key players, such as vehicle dismantlers, recyclers and ultimately the steel industry, which receives these hulks, are free of mercury and therefore mercury is not going up the stack in the smelters.
That is really the essence of what we are doing in relation to mercury. We are taking every opportunity to phase out mercury in all aspects of our products. While that may not be entirely possible right away — because mercury, if it is managed properly, can be a useful material — we are approaching virtual zero in that category as we speak.
Mr. Chairman, I will stop on that point, recognizing the time allotted.
The Chairman: Thank you very much, Mr. Nantais. We will have ample opportunity, I hope, to discuss these issues with you.
Justyna Laurie-Lean, Vice President, Environment and Health, Mining Association of Canada: I provided a copy of the deck slightly ahead of time, but not translated, I am afraid. We ran out of time. I will not talk about the association and its members and the broader things we do, in the interests of time. However, I have brought a copy of our Towards Sustainable Mining Progress Report so members can look through it. It contains a lot of detail on many aspects.
I have organized my presentation in response to the questions provided by the clerk. The first question is how CEPA has affected us. Some generic aspects of CEPA affect our industry, such as the National Pollutant Release Inventory and the provisions for the transboundary movement of wastes and recyclable materials. Some of our members rely for a substantial part of their feedstock on secondary material, such as scrap from the electronics and automotive industries.
More specifically, currently our smelting members are under a pollution prevention planning notice that was published in the Canada Gazette in April 2006, and that notice addresses a range of pollutants. The primary focus, targets and schedules are on particulate matter and sulphur dioxide, but mercury is included as well. At this time, facilities are about to finalize their plans and prepare their declarations.
How do we work with government to prevent mercury pollution? Here I will digress for a moment to describe mercury in the context of our industry. We do not intentionally mine mercury. It is a minor contaminant in the material we extract and process. Mother Nature being variable, the per-cent concentration of mercury and other elements depends on the location. The process used to extract the material depends on the special circumstances of the location. That combination means that it is difficult to make comparisons between facilities or to speak in the aggregate. Concentration is dependent on the local conditions.
How much mercury, or any other element, is released is part of that package as to what goes in and what kind of process is used. Therefore, we do not have programs or activities directed at one specific release; programs are directed at the facility as a whole.
However, we were involved in the development of the Canadian Council of Ministers of the Environment, CCME, Canada-wide Standards. We participated in the Accelerated Reduction/Elimination of Toxics, ARET, program, a voluntary challenge program where mercury was one of the key targets. We also contribute, along with a lot of other parties, to relevant research programs, some oriented toward the mines, some broader, looking at the movement, sources, pathways and exposures of metals in the environment. I will not talk more about them, because I could go on for hours. Our report points to the website where you can get more information and it also has information on tracking releases over time.
Senators posed the question: Is the federal government doing enough? I do not think that is for us to pass that kind of judgment. However, we note that one thing we have stated for a long time and highlighted in the CEPA review is the importance of monitoring and reporting on the state of the environment, both the quality of, and stressors on, the Canadian environment. A failing in the last five or ten years has been a cutting back in the degree of monitoring, and particularly reporting, with the death of the State of the Environment report, which makes answering that kind of question much more difficult.
What have we done to reduce mercury emissions? I copied, for illustrative purposes, the chart of the releases from our member companies. At the back of the report is a company-by-company breakdown. If you go to our website we have detailed data by facility. However, most people do not want to see that many numbers.
The Chairman: The graph at the bottom of page 2 is the mining industry in aggregate in Canada?
Ms. Laurie-Lean: It is our member companies. In that graph you see step functions and also some variation. It is a combination. The main reductions come from major process changes. Then, over time, production levels vary, or machinery deteriorates and problems are encountered. On the other hand, housekeeping is improved, so things go up and down a bit. Then, you have the next significant improvement and it goes down again. That is what you see over time.
As to what more could be achieved and what are our plans, because the facilities are currently finalizing the mandatory CEPA-requested pollution prevention plans, I would not want to speculate. That answer will come up shortly.
We participated in the process of the Canada-wide Standards. Challenges exist with our clients' facilities in trying to apply one standard, which is why standards are better addressed through the provincial permits and consideration of each site.
With respect to economic instruments, because we are a small number of unique sources, we cannot see how more economic instruments than the existing regulatory tools and quasi-regulatory tools under the Canadian Environmental Protection Act would assist. The pollution prevention planning notice has an intent-to-regulate statement in it, so our understanding is that regulations will cover all releases from our facilities. Whether other industries should be regulated or other sources, again, we would not want to offer an opinion on that.
How do we compare to other countries in controlling mercury or standards for mercury? Interjurisdictional comparisons are difficult. There are not a lot of smelters around the world. Many of them are located in developing countries, and, therefore, comparing the standards is difficult. A study commissioned by Environment Canada about three years ago comparing Canadian and U.S. smelters found that the unique features and the differences made it difficult to say on a generic count that one is much better than another.
Regarding the pros and cons of CEPA to address air pollution in Canada, we do not have an opinion on the choice of legislative vehicle. As with greenhouse gases, it is the detail that is important, and not the choice of a particular legislative vehicle. On greenhouse gases, we are concerned about ensuring there is recognition of what we can do and what has already been done.
Finally, in terms of changes to CEPA, at this time, it is difficult to say. There has not been a lot of experience with pollution prevention planning. As far as I know, we are the first sector-wide, multipollutant, broad pollution prevention planning notice, and it is not yet a completed process. It is difficult to say if it was a failure or success, or what it achieved. It is still a work-in-progress, as are many parts of CEPA that have not been implemented or not implemented sufficiently to form an opinion as to how well they work.
The Chairman: Before we proceed, would you say that the members of your association generally or in the aggregate, in respect of the way they deal with mercury, have been affected by CEPA or any of its applications since 1999?
Ms. Laurie-Lean: They are affected by the pollution prevention planning notice.
The Chairman: I mean prior to April 2006.
Ms. Laurie-Lean: With respect to the process of developing the pollution prevention planning notice, a consultation stretched for years, so the awareness was there, although the focus was on SO2 and particulate matter. Mercury is in the particulate matter, so it was part of it. The biggest impact was the ARET challenge program. That focused attention in part because it was a voluntary measure. It required people to think about what they could do as opposed to why they could not.
The Chairman: Please, for the record, spell out ARET.
Ms. Laurie-Lean: ARET stands for ``Accelerated Reduction/Elimination of Toxics,'' but, in fact, nobody ever uses that. It was just the ARET program, as in the French word for ``stop.''
The Chairman: Exactly; thank you very much.
Mr. White, I presume we are going in order here.
George White, Consultant and Senior Advisor, Sherritt International, Coal Association of Canada: Thank you for the invitation to appear. I want you to notice that my number here is 13. I hope that does not augur badly for either my presentation or the questions afterwards. I represent the Coal Association of Canada and, particularly, Sherritt International. We are the largest coal producers in Canada. Canada uses 56 million tonnes of thermal coal a year to make electricity, mainly. Almost all the coal in the country is used to make electricity. Our company produces 37 million tonnes of that coal-generating power for a lot of Alberta, Saskatchewan and Ontario.
We decided to leave the burning of the coal to the utility sector, and other people at the table can speak to the mercury content of coal when it is consumed in thermal power stations. We wanted to talk to you about new coal conversion technologies, which are becoming more available, and which will give us a chance to mitigate some of the issues, not only with mercury but also with many other deleterious substances.
I have been in the coal industry for almost 30 years now, and I noticed early in the game that when stringent regulation came in for other substances, such as sulphur dioxide and those kinds of things, the coal power generation sector was able to respond. We see technology today that is significantly different from what we saw numerous years ago. I think the same thing will happen, so I think your committee should take that into consideration. These regulations stand for a long time. Technology is changing at the same time. I want to talk about that.
The coal conversion technology I am talking about is coal gasification. It is a process whereby we will be able to convert coal into syngas. It is not natural gas but a form of gas. Syngas is one third the energy value of natural gas, but it can be used for almost the same purposes as natural gas. In fact, syngas is used today in steel plants, and anywhere where it is a by-product of the industrial process. They make syngas in the coking business and steel plants.
The reason there is a market for syngas in Canada is not because of the power generation business. It is because of the heavy oil industry in Alberta. Right now, we use tremendous amounts of natural gas to provide heat to remove the oil from the ground, and we also use a tremendous amount of natural gas to make hydrogen, which is used to upgrade the bitumen before it goes into conventional crude oil refineries in North America. Nowhere else in the world do we have a situation where we have so much coal and so much opportunity to convert that coal into primary energy to be used in a process such as the heavy oil business.
In the coal gasification process, we take a lump of coal that is hard and black, and we will convert it into three substances, all of which are gases: CO2, which contains most of the carbon that is in the coal, and no energy; carbon monoxide, which can be converted to hydrogen; and, hydrogen, which contains all the energy that was in the coal and no carbon.
If we can separate those three items and deal with them separately, we have an opportunity to deal with some of the atmospheric emissions issues around coal. That includes mercury.
Most of this information is covered in the material I gave you. Gasification technology has been commercialized for many years in numerous countries throughout the world. It was used during the Second World War, for example, in Germany, to make diesel fuel for tanks. It is used in South Africa today, and you can go to South Africa and see gasification plants there.
There are at least four gasification plants in commercial operation in North America. Some of them were built originally as demonstration projects funded by the United States Department of Energy. Eastman Kodak, which is a public company in the United States, has been gasifying coal in Tennessee since the early 1970s. This plant provides syngas as a feedstock for the production of acetate products. One requirement of their process is that mercury contamination in the gas be eliminated. They are using technology successfully, using sorbents based on activated carbon to capture and dispose of the mercury content in the coals they use in the gasification process.
Not only does our company intend to do exactly that, we also have the capacity in one of our mines in Saskatchewan to make the activated carbon because we have a char plant there, and we can make activated carbon, which can be used to remove mercury from the gases that are produced in the gasification process.
Other gasification plants in the United States produce power and chemicals after cleaning the syngas and taking out the mercury. We should not think of the gasification process as a refinement of the current types of combustion processes that are used to make electricity. Gasification can be used in a process that makes electricity as well.
We think that the compelling market is the heavy oil market because we need to deal only with the gasification process. We do not need the part of the process that makes the electricity and that complicates things. It would be simpler to use gasification to make hydrogen in the beginning and perfect that system in Canada: then move on to use the gasification process for making electricity as time goes on.
Gasification should be thought of as a chemical and a refining process where the combustion of the coal is converted into these energy components. Hydrogen has a multitude of uses in industry, CO is a combustible gas that has industrial heating uses, and carbon dioxide can be sequestered underground. There is work in Alberta to develop a CO2 sequestration pipeline. Once those processes are in, the mercury becomes a by-product of the process and can be removed using technologies that fit in with these other ones.
From our estimates, the total market potential for coal, based on the growth that we think we will see in the heavy oil industry — and, to put it into perspective, last year Alberta used 25 million tonnes of coal to make electricity — would be 50 million tonnes to 80 million tonnes a year, two or three times as much. We must find a way to remove the mercury, and the gasification process will allow us to do that.
We see new opportunities for these technologies arising in Canada and nowhere else in the world. We see thermal coal suppliers in Canada, such as Sherrit, developing the capacity to reprocess the coal into valuable commodities that can be used in industry. We think that government policy that supports the gasification process will produce a number of benefits. We think it will produce the best use of abundant, low-cost and available coal. It will preserve natural gas. We can use syngas instead of natural gas to support the primary energy needs of the heavy oil industry. We will save natural gas for higher end and domestic uses, where it is very valuable.
We see environmental mitigation strategies that can exceed current requirements, including the elimination of mercury in the incremental coal production. We see gasification processes that, if they can be developed now for the heavy oil industry, will take away much of the risk that the utility businesses see. We hear about people building these clean coal plants, but no one is building them. One reason for that is that there is a certain technology risk associated with these plants. I guess any industry now that has to put merchant power into the market is risk averse, so it is difficult for boards of directors to approve the construction of these plans, given the technology risks out there. If we can find a way to reduce that risk, those plants will come on line faster. That will reduce the mercury issue for power as well as for coal in general.
Victoria S. Christie, Senior Advisor, Environmental Affairs, Canadian Electricity Association: I want to give a brief overview of what we are doing to manage mercury in the coal-fired electricity generation sector. I also want to give an overview in terms of the issues with respect to managing mercury emissions in our sector and what our companies are doing to reduce the levels of uncertainty around management of emissions and the emissions themselves. I will then address the path forward for our sector and give you a brief couple of notes on the role of CEPA in managing air pollution at large.
As you know, there has been a lot of activity around managing mercury releases because of the human health concerns. Our sector has been committed to addressing these emissions. We have been doing a lot of work, particularly in the last 10 years. Mercury is listed as a CEPA toxic, but not much has been done under CEPA to manage mercury emissions in our sector. Much of the action or initiatives have taken place, for our sector as well as for others, through the Canada-wide Standards process. That is the federal-provincial process by which the Canadian Council of Ministers of the Environment set standards across the country. A number of other sources of mercury have been dealt with that way and the Canada-wide Standard for our sector was announced October 11, 2006.
We are a diverse sector. We have different coals across the country. We have a high degree of diversity in terms of management. A number of our corporations are still Crown corporations. A number of the others are privately owned and are trading energy in the open markets. We have different needs across the country. The Canada-wide Standards processes suited us well because it allows the provincial agencies that are our key regulators to be engaged in the process. That has worked well for us.
In terms of the role of CEPA in our sector with respect to managing mercury, we do not see a significant need for additional work, but there is work for the federal government, through the Canada-wide Standards process, and perhaps on the global management of mercury emissions.
The Canada-wide Standard was approved on October 11 of this year. It sets provincial caps that will contribute to a national capture of mercury from coal of approximately 60 per cent by 2010. There is a potential increase to 80 per cent by the year 2018. New sources of power generation will be subject to performance targets as of 2006; that is, on a go- forward basis.
The 2010 target is significant. The U.S. passed a rule recently and it is not as stringent as the Canadian standards for mercury emission reduction by the year 2010. That is something to keep in mind as we go forward. Some of our companies will need to do more work than companies in the U.S.
You asked a question about how the CCME Canada-wide Standards process works. For this process, it works well. In the end, we came to a good solution. However, along the way, it lacked strategic oversight. The people engaged in the process tended to be technical level folks, so we did not get the overview we needed for the process. That lack of overview helped to slow it down a bit. The process went on for a long time and the scientific uncertainty around mercury management in our sector also added to slowing the process down. Some people would say it was not a good process; it took too long. However, those two key issues contributed to the slowdown. The first issue we could improve upon on go-forward basis if we continue to use the Canada-wide Standards process; we are working to improve upon the second issue. Our sector burns three key types of coal across the country: high and medium sulphur bituminous and low sulphur sub-bituminous and lignite coals. They all have different emission profiles and they are all very different in the way that we can effectively manage them. Those coals tend to range across the country. We have different coal types across the country, and the mercury content in the coals can differ within a coal seam.
The latter two, the sub-bituminous and lignite coals, which tend to be burned in the west of this country, have higher elemental mercury emissions, which is a type of mercury that is more difficult to remove. We have real challenges there. Those two types of coal tend to represent the majority of coal burned in this country to produce electricity.
Again, we have a number of uncertainties that exist with the management of mercury in our sector, and that continue to exist even though we have a Canada-wide Standard. That is in terms of the fate and transformation of mercury in the environment. We do not know exactly what happens to it and where it goes. The whole transformation of mercury in the water systems is still questionable. The variability in coal and combustion behaviour is still a question, and work needs to be done on the effectiveness of technologies for emissions control. These uncertainties pose a challenge for us going forward, and we look to the government to help us solve these problems.
Currently, we are committing significant resources to reducing the uncertainties and to reducing our emissions. Currently, we control the emissions largely through co-benefits of other emission control technologies. At present, there are not technologies to remove mercury from coal fire generation that are commercially proven to be risk-free or guaranteed by the manufacturers.
We have also done some work on reducing mercury in the global pool. We have worked with the car manufacturing sector, or the steel sector, to reduce mercury switches in cars. We see an ongoing role there for the federal government in terms of assisting, because Canada is a net importer of mercury. There is a lot of room for improvement in the amount of mercury we receive. If we can do work overseas, it would be helpful.
We are working to improve mercury measurements. We are looking at different ways of measuring the mercury released from our stacks, and also generally trying to understand better what happens to mercury when it enters the environment.
Going forward, we will continue to work with our provinces to implement the Canada-wide Standard and to work on the development of new technologies needed to manage our emissions better. Over the long term, we are looking at integrated strategies and entirely different technologies, as Mr. White mentioned a few moments ago.
In terms of federal and provincial oversight, we look to the Canada-wide Standards process to continue. We think it is a good process. It has been successful. The federal government has a role in that process and also a role in supporting research and development in our sector.
For general information on our member activities in terms of environmental performance, we have our Environmental Commitment and Responsibility Program, which you can find on the CEA website.
I turn to the last slide in terms of the role of CEPA and emissions management. I agree with my colleague that we do not have a large concern over which vehicle is used to manage emissions in this country, but we do care about how it is done. At the moment, we are not clear on how the Clean Air Act, which was announced last week, will roll out, and the devil is always in the details. We ask that the principles of competitiveness and ensuring regional differences are taken care of. Those sorts of things need to be taken into account if we are to manage these air pollutants through CEPA.
Changes are needed with respect to CEPA in terms of the equivalency provisions. Some changes were mentioned in the new Clean Air Act, but I am not sure that they will go far enough to enable the provinces to facilitate activities at their end. Also, the creation of a new part for pollutants in CEPA, which was done in the Clean Air Act, is important to ensure that we lose the stigma of toxic substances where it is not warranted.
David C. Adams, President, Association of International Automobile Manufacturers of Canada: Thank you for the opportunity to appear before you. I am the president of the AIAMC. I do not want to pay you a quarter, so I will say that it stands for the Association of International Automobile Manufacturers of Canada. For a bit of background, I have 13 member companies representing three cultures: Japanese, Korean and German.
The Chairman: For our information and my curiosity, what is the significant difference between the Canadian Vehicle Manufacturers Association and your association?
Mr. Adams: Mr. Nantais may have a different answer, but I think primarily the traditional North American manufacturers are members of the CVMA and everyone else is in the association that I represent.
For a bit of perspective, in the late 1970s our members represented about 10 per cent of the market share. Last year, we had 43 per cent of the market share in Canada, so our members' presence in Canada has grown from a sales perspective. Also, three of our members are manufacturing in Canada — Toyota, Honda and Suzuki — through a joint venture with General Motors. They had record production last year, at slightly over 880,000 units, which contributed significantly to Canada's balance of trade.
The environment has always been a key focus for our members and we have a reputation as leaders in environmental technologies, such as hybrid technology and advanced diesels. In fact, in 2005, AIAMC member companies sold 80 per cent of the hybrid vehicles offered in Canada for sale.
Mr. Nantais has addressed the efforts that the industry in total has made with respect to greenhouse gas and smog mitigation. As a testimony to that — and I ask you to remember this, because I will refer to it later — it takes 37 vehicles of the 2006 model year to emit the same amount of emissions as one vehicle of the 1987 model year. That gives you a quantum in terms of how far we have come as an industry as far as our emissions reduction technology is concerned. Much of that reduction has been facilitated on a harmonized basis under CEPA, where we have been integrated with the United States in terms of how we pursue our emissions regulation.
As leaders in environmentally friendly automobiles and automotive production, our members have an excellent record on mercury, which we understand is the focus of the session today. Mercury, we know, is a potent neurotoxin that can cause serious human health and ecological effects when released into the environment, and it is currently number 8 on CEPA's Toxic Substances List.
In this context, it is important to note that most of our members' products have never contained mercury switches — many of these switches are used in trunks and hoods, so that the light comes on when you open your trunk and hood — whether for convenience lighting or on anti-lock braking systems. That information is significant when it is widely accepted that mercury switches, the ABS switches and convenience light switches account for about 99 per cent of the mercury used in automotive applications. Where there have been some limited-model exceptions, our members have not produced any vehicles for sale in Canada containing mercury switches since 1996.
For greater context, out of the 2.59 million vehicles of the 1994, 1995 and 1996 model years remaining on Canada's roads as of July 2005, the few models sold by our member companies for those three years account for less than 1 per cent of those registrations. This record significantly differentiates us from others in the industry.
There are other applications where mercury is used, and in many cases, at this point there is no viable alternative. Some of those applications are high-intensity discharge lights, the bluish headlights that you see on many modern vehicles. Those lights typically contain about .55 milligrams to 1 milligram of mercury. They are used because they offer improved visibility and longer life, and they use less energy.
Flat-panel displays are also used for navigational screens, which are optional equipment on vehicles. Those panels typically contain 2.5 to 5 milligrams of mercury, and those screens are generally used to address lighting for restricted space applications.
Mercury content in other applications is small. To illustrate, a high-intensity-discharge headlamp contains less than 1 per cent of the mercury content of a convenience lighting switch and less than the 1 milligram to 25 milligrams of mercury typically associated with the compact fluorescent lamps that we are encouraged to use in our homes to reduce energy consumption. This information highlights the fact that sometimes there are policy challenges in terms of one goal vis-à-vis another: energy consumption vis-à-vis using mercury in an application such as a compact fluorescent lamp, for instance.
AIAMC was most recently part of a consultation around the working document that included the main elements that Environment Canada plans to include in a notice to be issued under section 56 of part 4 of CEPA. The notice will require the preparation of pollution prevention plans with respect to mercury releases from electric arc furnaces and from mercury-containing components and switches in vehicles, imported and domestically distributed since January 1, 1994.
In this context, the figures noted earlier are important in that AIAMC members have few models utilizing mercury switches in 1996, representing, as I mentioned earlier, less than 1 per cent of the 1994 to 1996 model year vehicles still on the road.
Nonetheless, AIAMC members are supportive of efforts to prevent the release of mercury into the environment but reiterate that they have been proactive in either not using mercury switches or in the early mitigation of mercury switches used in vehicles sold. Thus, we would like to ensure that any measures undertaken are done so in an equitable manner.
Other questions that were raised for the witnesses to consider surrounding CEPA as it relates to mercury and CEPA generally are outlined in the paper we distributed in both official languages. In the interests of time, I will leave my remarks at that. I do have one suggestion that the committee may want to consider, namely, how do we get those million 1987-and-older vehicles off the road? A dual benefit is associated there and that is, you have that 37-to-1 ratio of emissions in terms of taking the older vehicles off the road. Also, older vehicles are more likely to contain mercury switches. If we take those older vehicles off the road, we reap a dual benefit. We remove mercury switches and we have a greatly improved smog benefit. I will leave that with you.
The Chairman: Thank you.
Senator Adams: I come from Nunavut and I am not used to being the first questioner.
In the 1970s, there was no talk about mercury equipment. Today, however, we are talking about mercury equipment. Around 1970, we were told not to eat seal liver because it had too much mercury in it. It might be different for the manufacturers, but people who were there before your time were using the mercury and mercury was in the ground.
Whitefish feeds from the bottom and it sucks the mud there. We were given a warning about some of the other mammals, as well as the lake trout and whitefish. I used to be an electrician. I did a lot of work with mercury switches — mostly with thermostats, light bulbs and stuff like that. Mercury lasts only for so many hours. You have regulations for mercury here, but in Nunavut we threw millions of the bulbs in the dump and no one cared whether they were toxic. We did not have regulations about things going into the dump in the same way that people here did. What is the regulation today?
The second question is about mercury from coal. You are mostly talking about mercury from coal, but we have a community burning coal 24 hours a day, 365 times a year. We have 26 communities and every one of them has diesel generators. Nunavut might look at how much we are polluting the Arctic and what is coming from the south.
The Chairman: Are those questions both addressed to Mr. Adams?
Senator Adams: Some of them are for Mr. Adams and some for the other people.
Mr. Adams: If I understand your question, Senator Adams, one thing I heard you ask is what types of regulations are in place now for mercury switches in vehicles? My understanding is that there is no regulation in place right now in terms of mercury switches. Voluntary programs have been set up to address mercury switches in vehicles. Mr. Nantais referred to a program that his association is setting up to address the mercury issue. At the beginning of November, we will see a Canada Gazette, Part I notice that outlines our regulatory requirements under the pollution prevention plans.
Senator Adams: Mercury comes from light bulbs and stuff like that. It is not created in the air. It is heavy. The land is polluted between coal fire and mercury, which is up in the air. I want to find out how they act. One goes up and one goes down.
Mr. Adams: There are two challenges on the automotive side. One challenge is when a vehicle is at the end of life — that is, when it is scrapped — making sure that those mercury switches are taken out of the vehicle so that when the vehicle is crushed mercury does not leach into the soil or go into the atmosphere.
The other challenge comes when these hulls of vehicles are melted down for steel. If there is mercury there, it will obviously go into the atmosphere as well.
Mr. White: When we compare what happened 30 or 40 years ago to today, we use more coal today because our populations are increasing. Coal is used worldwide in what used to be Third World countries that are becoming Second World countries now.
The International Energy Agency, IEA, is projecting coal consumption will increase tremendously over the next number of years. That has happened already. When we were young, mercury was produced from the coal but, at the time, there was not as much coal burnt. We did not have the huge point sources that we see today.
There are different types of mercury as well. You probably know this, but mercury is contained in the earth and not just in the coal. When we mine the coal and burn it in point sources, that mercury behaves differently, depending on the kind of mercury. If you have elemental mercury, which is the metal, and you put that in a fire, it is a liquid and it turns to a gas and goes up the stack. It is difficult for us to remove that.
We have technology that is developed for conventional coal-fired power plants that will enable some of this mercury to be removed. That technology is activated carbon, which can be retrofitted. We will probably see it used in the United States in the near future to reduce mercury emissions.
Some of the mercury is in the form of bionic mercury, or mercury salts. Mercury salts are soluble in water. If we use wet systems in the back end to remove other things such as sulphur dioxide, then the mercury will succumb to that process and will be removed in collateral with other types of systems that are used in the power plant. You get more than one reduction for the money that you invest in the scrubbers.
In other situations, when we put the coal through the boiler, sometimes not all the coal is burnt so we end up with residual carbon in the ash. If we use certain types of dust collection systems such as vacuum cleaner bag systems, that carbon becomes stuck on the bags. When the mercury goes through the bags, it is absorbed by the carbon. There is already a significant amount of reduction by virtue of the fact that we have technology to do other things. We have not added mercury reduction technologies that are designed to remove the marginal mercury that is not removed collaterally with the other systems. That can be done using conventional processes.
The industry believes that in the long run, namely, in 20 to 30 years, you will see a reduction eventually in the type of systems we use today to make power and an increase in the gasification processes. It will not be easy but more certain, and there will be more certainty associated with taking the mercury out of the systems. It will not be in the fuel when the fuel is consumed. It will be removed from the fuel prior to using the fuel. Nowadays mercury is in the fuel when the fuel is burned. You must deal with it in the emissions after the combustion. In the new processes, it will be removed before the fuel is consumed.
The Chairman: Where Senator Adams lives, there is a lot of background mercury there and a lot of it occurs because there are natural occurrences: forest fires, and so on. But it is inordinate in the Arctic, a disproportionate amount. That presence is attributed to migration or transport of the stuff, either through the air or through water.
Does the industry have a handle on how that migration works? Are there migratory patterns of mercury that have to do with natural wind patterns, and so on? Do we know those things?
Mr. White: I am not an expert, but I do have a background in the power business. I always thought that a significant amount of the mercury that ends up in the fish, particularly higher-order fish like Arctic char, tuna and swordfish comes from the contamination of the water during the flooding process related to hydroelectric projects. There is a natural contamination of the water with high mercury levels for a period of time, so the bottom feeders end up passing that up the food chain, and of course, human beings are at the top. As a result, mothers with babies receive warnings warned not to eat any more fish. Fish is very good for us but at the same time, we can tolerate only so much mercury. I always thought it came from in the North.
Mr. Nantais: In answer to your question, Senator Adams, there has been for some time an evolution in atmospheric modelling. I think the real issue here is long-range transport of things like mercury. I was a panellist yesterday at the Seventh Annual Global Environmental Taxation Conference and we discussed China and India with respect to their energy requirements. We discussed how those countries expect to achieve a standard of living similar to North America and Europe.
The changes that will occur in energy demands, whether it is coal or oil, are staggering. It is estimated, for instance, that China, by roughly 2025, perhaps sooner, will have a daily requirement of 99 million barrels of oil. That is more than the 84 million barrels a day that are currently produced worldwide.
We must look not just to what we do in Canada with respect to mercury and how we can collect it and perhaps reuse it, because there are liabilities with storage, but we must look to how we will enter into international agreements on long-range transport, which we have been doing in some instances. As we talk about a global future, I suggest that those international agreements will become even more critical to the quality of our environment and air in Canada.
Ms. Laurie-Lean: This is a perfect opportunity to talk about a favourite subject. Not about mercury per se, but the Metals in the Environment Research Network and the Metals in the Human Environment Research Network have a lot of expertise that I think this committee can draw on. It was not exclusively directed at mercury, but mercury was one of the metals looked at. It brings together university faculties that are working in these fields. It is a cross- disciplinary organization that draws on government and continues to do so. I believe that in the current program, there is even inclusion of northern and country foods in consideration of pathways of exposure. The lead is Dr. Beverley Hale. She could direct the committee to where the expertise may lie. That is the science expertise. I do not think you could ask industry to talk credibly about the broad science, but that kind of research network that brings experts across Canada together could be a good source.
The Chairman: Do you know where Dr. Hale could be contacted?
Ms. Laurie-Lean: She is at the University of Guelph. Her website is listed in our report.
The Chairman: Thank you and we will follow that very quickly.
Ms. Christie: I wanted to provide a bit of clarity around hydroelectric power generation and its influence on mercury and the environment. It has been shown that when we flood large areas mercury does come out of the soil into the watersheds. The programs to which Ms. Laurie-Lean referred show that after approximately 50 years the effect goes away, the metals settle back, and the whole issue is turned away.
One thing that Mr. Nantais mentioned that we have to look to is the global influence of mercury emissions. It has been estimated that Canada contributes less than 1 per cent of the emissions to the global pool of mercury. Not to negate that we must manage our own emissions domestically, but many of our problems in the Arctic and other areas are due to a huge problem with international emissions.
The Chairman: Would you agree if we are going to lecture others we must set a good example?
Ms. Christie: Absolutely.
Senator Angus: Thank you all very much for coming. At first blush I figured tonight we would hear from the bad guys, so I was sure to get here to hear your materials and your offerings. I must admit I am very impressed. We are hearing your evidence and reading your briefs against the backdrop of people who came before us last week and indicated that over the last ten years we have reduced mercury emissions in Canada from 70 per cent to 7 per cent, which to me was a staggering figure. That indicates that you and your members have obviously done the things are you telling us.
I was staggered to hear that 47 per cent of the mercury that is polluting our environment in Canada comes from Asia, and only 7 per cent from Canada and the rest from others. This substantiates your numbers, Ms. Christie.
Then I could not help but pick up on your comment, Ms. Christie, that Canada, it seems like a throw-away line, is a net importer of mercury. Did you mean net importer involuntarily or did you mean that we actually need mercury for certain legitimate pursuits in the country, and in your industry in particular, and that we import it?
Ms. Christie: No, I was referring to the atmospheric emissions. I am not an expert in the products that use mercury, but I know there are legitimate uses for mercury in the country. I cannot speak to those specifically.
Senator Angus: I will have to look into it a little more deeply, but I have the impression that we are doing well in Canada, much better than I thought we were when we started this particular volley of our three-pronged study. My own mindset when we started was all these poor people up in Senator Adams' part of the world, for example, were being polluted by your various industries; coal-fired power plants and the automobile industry, the big manufacturers along the Canada-U.S. border, and of course in Alberta in some of the big industries in that province.
I do not think that anymore, although I was taken when Mr. Nantais said the following: ``Mercury was used in numerous industrial applications in the past as it is an excellent conductor of electricity.'' This is one thing we have learned, we are laypersons and we actually do learn about some of these things. We have to understand what you are telling us. Then you added that it is still to purchase these products worldwide. That makes me wonder; do you mean it is still legal for sale under Canada's laws or under which laws?
Mr. Nantais: Certainly in Canada it is still a legal material to be used in products, and that is pretty much the situation globally. I may stand corrected, but I do not know of any jurisdiction or country that actually outlaws the use of mercury. It is widely used, and we continue to see countries like Brazil where, it is used in gem or gold mining, with virtually no controls as to how it re-enters the environment.
I am glad you are pleasantly surprised at the performance of Canadian industry as it relates to mercury. That does not mean, however, that we cannot do things about collecting products — as we are doing with mercury switches in vehicles and with the ABS modules. As long as we properly manage them without allowing them to get back into the environment, that is really the issue.
What we do not want to have happen is to go about these collection activities and then have them move elsewhere in the world — for example, in Brazil, where they automatically re-enter the environment through a throwaway process, whether it is through the air or in the water in those locations. We would deem that unacceptable; however, there are ways we can manage the recollection and recycling of mercury so we do not have to rely on new sources to carry out or use it in products where it is justifiable, where no other material may perform as well.
Clearly, there are other things, what I call the conflicting objective policies. For example, we want to move to more energy efficient light bulbs so we see the new fluorescent compact light bulbs but they are covered in packaging the size of the Queen Mary.
Senator Angus: Is that for safety reasons?
Mr. Nantais: On the other hand, we have a very low percentage of recycling in this country. We can look at how we can recycle mercury and other items and responsibly manage their reuse, without having to rely on new sources.
Senator Angus: We are finding — and many of you are confirming — that in many areas where we thought mercury was the only way to go, there are other ways, with thermometers, light switches and other switches.
Mr. Nantais: Thermostats.
Senator Angus: We are looking at CEPA and we will give a report. It will be narrow because we have three areas, but mercury is listed in the schedules of the Canadian Environmental Protection Act as a toxin. Would you recommend that it be made illegal, or do we have those issues under control?
Mr. Nantais: We have some effective tools already. We just have to apply them effectively and responsibly.
Senator Angus: In your brief, you seemed to indicate that it was used in numerous applications and it is still legal to do so, but you inferred that we are not doing it, which is great. On the other hand, why would we not make it illegal? Would that be a bad thing?
Ms. Laurie-Lean: You are putting us on the spot. I do not like to comment on someone else's business, because I do not know that business. However, I can say that we will continue to reduce and we have made tremendous progress, but there is still a lot more to do.
In the case of other metals the relationship between how much society uses and the releases that use leads to, can be very disproportionate. Very tiny uses can produce the majority of the releases.
Mercury is very different from the other metals in that it is the only one that biomagnifies in the environment. In some ways, it acts much more like an organic than zinc or copper. It is a very different animal; but, in general, you would have to look at a particular use and the life cycle impact. I have read — looking at things like fluorescent bulbs — that the energy savings from using them resulted in less mercury being released because of the mercury not being released from the energy production. You have to look at more than just how much is used in a product. You do need to look at is it managed responsibly at the end of life. Some of the exposures arise from traditional medicine and from some ethnic groups, who use things like mercury or arsenic or other substances they should not be using. You should really ask those industries or people familiar with those applications to discuss it. Whether CEPA is the appropriate vehicle, or to what extent the Hazardous Products Act should be applied I cannot comment.
Senator Angus: One of the things that blew me away is that one of the big sources of mercury emissions is from crematoria. Cremation is increasing, from what I am told by people in the funeral business; it is becoming more and more commonplace. I am asking this rhetorically, why would they not have figured out a way to incinerate? Then I wondered, if it is not coming from the humans, is it coming from the material in the coffins?
Ms. Laurie-Lean: It is from the humans, from the dental fillings.
Senator Angus: That is interesting.
Ms. Laurie-Lean: I understand there is technology to capture some of that mercury. In Europe, in particular, where cremation is more common, I believe there is technology to capture the mercury from being released into the environment.
Senator Angus: Senate committee targets crematoria — a preliminary appraisal.
Ms. Laurie-Lean: In terms of activities around the world, you may also wish to look at the European Union, which has put some directives in place that restrict certain applications of mercury.
The Chairman: I want to expand on that a little bit. Just to make it clear, there are two, not entirely separate schools of thought. One is that you should manage the mercury and make sure that at its end life when it goes into the dump, it does not go to the wrong places. The other is that if you were able to restrict it from being used in the first place, it would lessen the second problem.
Mr. Nantais, you said you do not think there are any jurisdictions in which it is illegal; however, are there not jurisdictions in which the industrial applications of mercury have been prohibited?
Mr. Nantais: I am not sure I could answer that; I just do not know for sure.
Senator Angus: That is why I asked the question. It is something we need to follow up on, Mr. Chairman.
Ms. Laurie-Lean: Many industrial applications have been phased out or banned, things like use in chlor-alkalai processes and others.
Senator Angus: There are some countries in which you cannot put mercury in thermometers.
Ms. Laurie-Lean: Industrial-type producers do not use the recovery of gold with mercury. Miners in developing countries use it and that is a big concern. There is an outreach program, through UNAP or the World Bank and industry, to try to teach at least better practices; but the problem is that a lot of that mining is illegal; they do not obey the law on the use of mercury. There has been activity; it has not been overlooked and many applications are either prohibited or discontinued.
The question with respect to the Canadian Environmental Protection Act, and why mercury is different from some of the banned substances like DDT, is that you could ban every purposeful application of mercury and you would still have concerns and contamination of the environment. Some fisheries resources would still have advisories, because the predominant source of releases to the environment are from human activity but not necessarily from human use. Our releases, which are significant, such as releases from coal burning, are not from purposeful use of mercury; they are from moving natural materials.
With regard to diffuse sources and agricultural practices, the study in the Amazon identified deforestation as the number one source of mercury contamination rather than the gold mining that was suspected. Humans can do a lot of messing around in the environment without purposefully using the substance.
Senator Angus: They are releasing, by whatever means, this element into the atmosphere.
I will conclude by putting a general question to all of you that ties in with our mandate. In all of your briefs you dealt with things besides mercury with regard to CEPA. Do you have any recommendations that we might incorporate in our report with regard to things that CEPA is not getting done?
The environment is a complicated subject in Canada. Not only do we have overlapping provincial and federal jurisdictions, we also have CEPA in which 37 other acts are intertwined and three or four ministries — Health Canada, Natural Resources, and Environment Canada. It is the huge elephant in the room. How do we make useful sense out of our deliberations?
We are trying to make a difference, and if there are things we should infer from your offerings in terms of how to fix CEPA, please highlight them. My sense is that you are doing a better job than the media and other naysayers from the tree hugging community would make us think.
We are trying to protect our environment in the face of climate change and all the other things that are going on, and we have this legal framework. If it is not the right one, perhaps we can get it changed.
Ms. Christie: There are a couple of key things for our sector. You have probably heard a lot about the equivalency provisions, which are particularly important to our sector, which is heavily regulated by the provincial agencies. If we are to be regulated under CEPA with regard to mercury or any other pollutants or substances, the equivalency provisions are critical to ensuring that the provinces can continue to do their work. In some cases they may be the best agency to do their job as they are closest to us.
Another area in CEPA that could use some work is the National Pollutant Release Inventory. It is a significant reporting burden on industry. It would help to streamline that and ensure that we have clear direction around the purpose and role of that reporting.
Senator Angus: Do you think we have grown past that and it needs to be re-thought? The concept seems to be okay.
Ms. Christie: There is a role for it, but we are trying to make NPRI all things to all people. We should reconsider its purpose and role in ensuring that the government has the information it needs.
Mr. Nantais: I agree on the NPRI issue. It is in our presentation. One of our biggest frustrations has been the duplication of reporting. That can be partly a provincial issue as well, but duplication of reporting does not make sense. We need to look for efficiencies. No industry can afford to comply with duplicate reporting requirements. I agree that it has its place, but we need to find a way to make it more effective. It cannot be everything to everyone, but certainly we can look for efficiencies and ways to eliminate duplication.
Mr. White: Looking only at the Canadian context, there is some sense of reciprocity. If a particular regulation was set, our customers in Saskatchewan and Alberta would have a much more difficult time dealing with the issue than customers that burn coal in New Brunswick or Nova Scotia. One can buy a certain type of coal in Nova Scotia from Colombia, South Africa, Virginia and it can be delivered by sea. It is impossible to do that in Alberta. If we believe that people in Alberta and Saskatchewan have a right to equivalent power costs, we must consider these costs. There should be some consideration of the fact that everyone is not equal in this regard.
Senator Angus: It is part of the fiscal imbalance, Mr. Chairman.
The Chairman: On a point of clarification in respect of that issue, are there any among you who think that mercury ought not to be listed under CEPA as a toxic substance?
I take it the answer is no. Thank you.
Senator Tardif: Some of you indicated your preference for using the Canada-wide standards as a tool for dealing with mercury emissions. Critics have referred to this as a piecemeal approach that results in inconsistent standards that are sometimes brought down to the level of the lowest common denominator.
I would like to hear your comments on that.
Ms. Christie: I do not think it is piecemeal. The Canada-wide Standards process is a federal-provincial process, which takes into account the differences across the country. With something like mercury it is critical to take the differences into account. We do not currently have the technologies to deal with mercury emissions from coal-fired generation in the same way in the West as we do in the East. You must account for those differences when imposing regulations.
Another concern with Canada-wide Standards is that there is a perception that these standards do not become law, that they are not regulations and therefore are not sufficient. Particularly in the mercury case, you will find that the standards become law by provincial agencies adopting them into their own regulatory systems. Many of our plants have the standards integrated into their operating permits, so they cannot operate unless they work within the realm of the standards. Those are two misconceptions. I do not think it is piecemeal; I think it works effectively.
Mr. White: A considerable amount of our mercury problem comes from global emissions from other countries. With regard to ``piecemeal,'' if you take away the global background you could say that it will be harder for one group than another so we should make a different rule. However, when you put our indigenous domestic emissions up against the global background, you should try to do something that will be effective in limiting their impact.
The point I am trying to make is if you do something that is tuned into the various localities, that tuning is not as impactful as you may think. It is not really piecemeal when you look at it up against the background of emissions out there over which we have no control.
Senator Tardif: Do you believe that we should be going toward regulatory standards rather than voluntary standards?
Mr. White: That is a very difficult question. Industry has been very good at implementing voluntary standards. Our company, along with others, has participated in those programs. We have done the measurements, the tallying up at the end of the year and the reporting, all that is required. The fact is that we have both. We have regulations in certain areas and we have voluntary efforts in others. To the extent that we can do something prudent and effective with those voluntary standards, then that is a good way to go. If the committee does not think that will be effective, or if the industry has demonstrated that they cannot be effective with voluntary standards, then I think you have a different decision to make.
Senator Tardif: Mr. White, you indicated that when you are using the new process, you referred to it as the gasification process. Did you say that we do not have the technology at the moment to do it; or is it a technology risk and that is why we are not getting into it with the heavy oil industry?
Mr. White: Internationally, there has been quite a thrust toward what is called the integrated gasification combined cycle, or IGCC. That is a method of using coal by converting it into gas, cleaning that gas up and then using the gas to make electricity.
Until Canada's heavy oil industry has become fully developed, that is really the only application for gasification technology; in other words, making electricity. We could have used this technology 20 years ago to make electricity. It is much more expensive to make electricity this way than it is to use the types of systems that we have today. I believe that in regulated utilities very often the people who were looking after the customers said, ``You are not going to spend all that money on that technology today. We will put in conventional power plants.'' At that time, when they first started out, there were not any issues with the conventional power plants. Then sulphur dioxide became an issue, and the industry did something about that. NOx became an issue, and we have done something about that. Now we are getting into carbon dioxide. It turns out that it is difficult to do anything about carbon dioxide. What we are doing today with our conventional plants is making them more efficient. We make them 20 per cent more efficient than the older plants, which means they use 20 per cent less coal, which means they produce 20 per cent less CO2 for each unit of power that is produced.
The Chairman: How close does that get them to the same level of emissions that would come from natural gas in the same application?
Mr. White: It does not. An old power plant will produce about a ton of CO2 per megawatt hour. If we reduce that by 20 per cent, we will go down to 1,700 pounds. A natural gas plant will produce about 800 pounds. If we can convert the coal to gas, and use that gas to make the electricity, and take the CO2 and put it underground and get rid of it, then we can reduce the coal-fired CO2 emissions by about at least 80 per cent and, at the same time, take out the mercury.
There are 10 of these plants that are working around the world, perhaps even fewer. All of them have gone bankrupt and have been bought out by somebody else. Now they are fine. They are like golf courses and ski hills. The third guy makes the money.
There is no doubt that the technology will be developed. What we are saying is that Canada has an opportunity to develop just the gasification component, not the power production component. That will be on half of the problem as far as finishing the technology.
There are three major companies in the world today have decided they want to get into the gasification industry. They are Shell, General Electric and Siemens. The reason is that most of them produce gas turbines. Since natural gas is expensive and getting scarcer, they need gasification of coal to realize their marketing plans for the rest of their businesses. They have bought these technologies and they are willing to guarantee those technologies. Therefore, we are getting close to the point where you can do a commercial project. We think we are closer because we do not have to do the full Monty; we can do just the hydrogen production and not the power production.
Senator Cochrane: I am impressed as well with the advances that have been made in technology and cleaning up the environment. I did not have this perception before you came here today. What we have been led to believe is that you are great polluters.
Mr. Adams, you mentioned how those blue car lights still contain mercury. I know you mentioned that it is a small amount but then you went on to mention a larger amount. Is there a movement afoot to do away with mercury in those lights? Not just Honda and Toyota use those lights but other North American manufacturers as well.
Mr. Adams: Some of the reasons for the use of those lights are that they tend to last longer, they are brighter, for safety reasons, and I forget the other reason. However, there are three key reasons why those lights are normally used generally. That goes back to one of the points that Mr. Nantais mentioned earlier. Sometimes we are into these situations where you have tradeoffs in terms of greater safety and longer lamp life, as opposed to a lamp that has a trace amount of mercury in it.
I would hazard a guess to say that, yes; those blue lamps are probably becoming more widespread.
Senator Cochrane: More widespread?
Mr. Adams: Yes, in their application.
Senator Cochrane: There is no move afoot to get rid of them?
Mr. Adams: All manufacturers are looking for different ways to mitigate their use of mercury in all applications. If there were a way to get away from using mercury and achieve the same benefit in terms of the increased intensity of the lighting, it would be investigated.
Mr. Nantais: That is really the key; every effort is being made from a design perspective to eliminate all potential environmental issues, if you will, as they relate to the vehicle itself.
Most of the high intensity mercury lighting is primarily from offshore manufacturers. We are trying — as I think every vehicle manufacturer is trying — to balance that safety issue with the environmental issue. Without being privy to their design and product plans, I would venture to guess that they may be around for a while. However, I think the ultimate objective is to remove all sorts of potential materials and whatnot from a vehicle. It has a smaller environmental footprint.
Senator Cochrane: Ms. Christie, you are saying that you have used the Canada-wide Standards, as mentioned by Senator Tardif.
CEPA came into effect in March of 2000. What impact, if any, has it had on the sectors that you represent?
Ms. Christie: CEPA has not had an impact with respect to mercury. We are putting together management plans through Canada-wide Standards. That has been the vehicle through which we are dealing with the mercury issue. Once it is listed, we will need to do something to manage the issue. Canada-wide Standards are the vehicle for managing mercury in our sector.
We are touched by CEPA with respect to other substances, such as PCBs, treated wood and the like. We had active regulations and strategic options processes underway with respect to CEPA, but not on the mercury front.
Ms. Laurie-Lean: As I mentioned, we are currently operating under a pollution prevention planning notice from CEPA, and that includes a reference to mercury as one of the factors for consideration. There are standards. Our timelines and targets relate to particulate matter in SO2, and that has implications for mercury but has a specific reference to the mercury target.
It is a difficult instrument to describe as regulatory or not regulatory. I cannot give an opinion as to how valuable and useful a method it is until we have tried it. At this stage, we are subject to the notice. The declarations will be filed in November and at that stage, we will discover what additional steps Environment Canada will take. At the same time, we have heard that Environment Canada intends to regulate.
The Chairman: Will those actions be taken as a direct result of the requirement that has been made to you under CEPA?
Ms. Laurie-Lean: It is difficult to say what your life would have been like if you had not married your wife. Those are tough questions to answer, especially since we have been in the consultation process for a long time.
The process includes the notice being issued, which lists factors to be considered, and companies then prepare a plan. They declare they have prepared a plan and in turn provide information that has been requested in the notice, which basically asks what you are planning to achieve. At a certain date, you must declare that you have implemented that plan.
There are mandatory and somewhat stringent regulatory aspects to the process and one can be in non-compliance by not complying with it; however, there is an element of flexibility and choice. At this stage, it is not clear how that will work in practice until we have tried it. No one else has tried anything that complex before.
The Chairman: I am being obstructive, but things did not move in that direction before 1999. Your industry did not move in that direction before 1999 and you had been around long before that.
Ms. Laurie-Lean: Things did move in that direction. Remember that SO2 was already an issue because of acid rain.
The Chairman: I am talking about with respect to mercury in particular.
Ms. Laurie-Lean: Mercury is part of the package, so if one chooses a different technology or a different process, there are implications for mercury releases. If you look at the figure of 20 tonnes under the base year and compare that figure to today, the figure is less than 2 tonnes, which accounts for a huge reduction. That did not arise magically because the mercury somehow disappeared; it was as the result of a lot of effort. Part of that was a technological effort. The first big jump down was because of the acid rain caps that led to changes in technology that reduced SO2 but at the same time reduced mercury.
The Chairman: In general, that big leap happened because an imposition of a regulation or a requirement was created by an order of government.
Ms. Laurie-Lean: Yes, but not the second leap.
Senator Cochrane: Did that leap happen with you as well, Mr. White, in the coal industry?
Mr. White: Yes, it did. I refer to it as a collateral reduction. We were required to put scrubbers in place and burn different types of coal to reduce SO2. Basically, if the emissions profile is a plume and one does something to mitigate the plume, what is in the plume is equally mitigated. That is what happened. It is important to recognize that even with the best available technology the ability to produce electricity would be seriously impacted if regulations were set at levels that were so low the technology was not capable of dealing with it. Time can help in that kind of a process with a type of graduated result or a way of recognizing that it is more difficult for some people rather than others.
The Chairman: To conclude on that question, let us talk about this with respect to your industry in particular, Mr. White, by way of an almost hypothetical example.
The Minister of the Environment has clearly stated that it is her opinion, and it is reflected in the new Clean Air Act, that regulation is required because voluntary efforts in some respects that are dealt with by that act have not been sufficiently effective, in the view of some, and certainly in the view of government.
If you were told, you had to achieve a certain goal in 30 years, as opposed to 50 years, would you not spend more time, effort, and money on the development of the technology to meet that goal in the shorter time span. I am going from what you said earlier, that this technology sort of already exists. We have just not fixed it yet to the point where it has a practical application as opposed to a tabletop or small field application. I am wondering if caps would not move the use of that technology into practical applications sooner than without the caps.
Mr. White: In the methodology that you describe where we would develop new technology, we deal with 42-year time frames. If we build a new power plant using conventional technology, that plant should be around for 40 years or so.
The Chairman: Yes, and for the record, for the company to get a reasonable and justifiable return on its capital investment.
Mr. White: Yes, senator, that is true, but also to maintain productivity, a level of service and to provide value to the customer. The industry must get its rate of return or it will go out of business. If we put a regime in place that will cost more money, where it will really hurt is if we are forced to take plants out of service in advance of their useful life because the technology cannot keep up.
We are not talking about just improving the existing technology. We cannot get where we want to by improving the existing technology. Existing coal-fired power plants and even gas plants operate at very low efficiencies. Most of the energy we put into them goes up into the air as heat. We need to make fundamental changes to the technology and we are in the process of making those changes.
As we start building those plants, we will expect them to last for a long period of time. I see a declining curve that says existing conventional technology comes out and new gasification goes in. There are other technologies we can discover that will not go up.
The life of that whole process is more in the 40-year time frame than it is the 30-year time frame. Remember that the Chinese and the people in India are building one of these plants every week, about the same size as the Genesee plant, and they are our competitors in the international marketplace. I should not say they are not using the best available technology, but they are in such a state with their environmental issues that they have no choice but to use the best available technology. They cannot accept anything else in the atmosphere.
The Chairman: We do not have to go that far, though. Look at the United States. They are building 155 of them as we speak, are they not?
Mr. White: Depending to whom you talk, somewhere between 120 and 160 of these plants are on the books but they are not all under construction. If you look at the IEA statistics for the U.S, you will see a major reduction in the gas- fired plants and a huge increase in the coal-fired plants.
The Chairman: Is that not backwards in terms of ecology?
Mr. White: If you look at natural gas, some of us would say that we should ask the question as to whether or not we should be using natural gas to make electricity for the long run, knowing that we must build the plants. The gas guys will tell you differently but the coal guys will always say that we can tell you what the coal will cost in 20 years time.
The Chairman: We have a lot more coal.
Ms. Christie: In the area of technology development, our Canadian companies are doing a lot, particularly in the West because of the difficulties with removing mercury from those systems, and in terms of trying to find new, longer- term solutions and new technologies. However, for either the longer term or the shorter term, we are a very small community of companies. It is dangerous to try to step out ahead of the U.S., for instance, where the amount of money that is being poured into R&D and the work done down there eclipses what is being done in Canada. We must be careful that we do not step too far ahead of them. We will not drive technological development because our market is too small. We are doing a lot of work in Canada and we are contributing to a lot of work that is going on in the U.S. but on a large scale, Canada will not be the technological leader or driver of technology in North America. We must be mindful of not stepping too far ahead of the U.S.
The Chairman: I know of some people who would be disappointed to hear you say that. If Canada came up with an attractive technology, there would be nothing stopping it from being practical and attractive to others.
Ms. Christie: I am speaking of setting targets. Certainly, there are companies in Canada that are doing tremendous work and spending a lot of money to do that. My concern is around the targets and setting targets that one would think will be technology forcing. There is an idea that we set targets and the technology will come. I am concerned about doing that in Canada. Perhaps in a market in the U.S., where the situation is large enough that you have so much money poured into the technology, that might be the case. However, with respect to Canada, I do not know that will be the case, namely, that our colleagues in the West will necessarily find the solution, if you were trying to drive the technology.
Mr. White: I do not want to disagree, but I must. If we talk about electricity, we are right. We only build a power plant in Canada only every few years. The last one was built in 2005 and prior to that it was sometime in the 1990s. We do not have the volume to allow us to drive this technology in the power business. The Americans believe they can perfect this technology, reduce their own problem, and export the technology all over the world and save the planet. I think they have done that before in certain areas. They have been innovative as far as some of these technologies are concerned with the nuclear plants, and so on.
What are we trying to do? I think Canada can drive the basic engine of the technology; that is, the gasification process. We will do that in Alberta and we will do it quickly. I think that will have a major benefit and will give Canada a foot up.
The Peabody Coals of the world, the largest coal producers in the world, are saying that they will produce natural gas out of coal — you can put in a natural gas pipeline — and diesel fuel out of coal; and General Electric is saying that it will produce electricity out of coal. They will do that, but it will not be competitive with existing electricity, diesel fuel or natural gas. We think that we could put the technology in place in a competitive way to compete with natural gas for hydrogen. If we do that, we then have the basis for the technology. That technology could then be translated into Canada's electricity industry as time goes on.
Senator Cochrane: How long do you think it will take to do that?
Mr. White: We started a couple of years ago. A year and a half ago, we took samples of our Alberta coal to Europe and put it in gas fires to ensure we were on the right track. We found out that we were. In our company, we formed the technology development group, a full-fledged and stand alone project group that is tasked with doing exactly this.
If we start today, it takes three years to get an environmental permit or more, and longer to get a permit for the mine to produce the coal. We have the coal next to Edmonton. We have 500 million tonnes of coal and we have a huge market at Fort Saskatchewan. If we were fast and capable of doing this, we are looking at 2010 to 2012 in order to get anything off the ground.
The Chairman: Could we have clean coal, as Premier Klein has stated by 2015?
Mr. White: We could have good representation, probably one or two plants which are using the technology, and once that is in place it will take off.
The Chairman: Quickly, across the panel, will you address the efficacy of regulation as opposed to voluntary measures, personal preference, speaking as a Canadian, as to its usefulness, applicability and protection of the environment?
Mr. Nantais: It depends on the objective that you are trying to achieve. I will give an example in our industry. We have signed and participated in roughly 14 different voluntary agreements to achieve, in many instances, what they wanted to achieve regulatorily speaking. Voluntary agreements work when you have all the players involved. That is absolutely critical. Through my association and Mr. Adams's association, we are able to get every single manufacturer as a participant in these voluntary agreements. If we do not, it is perfectly appropriate for government to think about other alternatives. To simply dismiss voluntary agreements on the basis they do not think they will work, I beg to differ. We have several examples where they do work and can achieve environmental objectives and safety objectives that you could not otherwise get through regulation. Voluntary agreements sometimes give industry the flexibility to manoeuvre as and when the technology changes when we get new information about the environment and environmental goals we are trying to achieve. There is still a place for voluntary agreements, but there is also a place for regulation. Sometimes it is absolutely critical to maintain the level playing field.
The Chairman: You mentioned that things have been achieved under agreements that contemplate voluntary actions that could not have been achieved by regulation. I do not want to go there now, but would you please provide our clerk with a thumbnail sketch of a couple of instances of that for our purposes?
Mr. Nantais: I would be pleased to do so.
Ms. Laurie-Lean: A well designed regulation can be helpful. I do not think it is either/or, but at the same time there can be badly designed regulations that produce nothing, and produce a lot of waste and cost especially if they are conflicting, duplicative or not enforced. On the other hand, we want to ensure we always encourage voluntary action. Whatever the regulatory floor, we do not want to create an atmosphere where industry works to strict compliance and is discouraged from trying to go beyond the strict requirements of the law.
I would not like to see the question posed as one or the other being better.
Mr. White: One advantage of solid regulation — what I mean by solid regulation is good regulation; regulation that can be achieved — is that it allows industry to move on.
The Chairman: It provides certainty to the investor.
Mr. White: Yes, we have seen that. We have seen the opposite, of course, in Ontario, where there is an off-coal policy as far as power generation is concerned. Our suggestion has been to tell us what you want, give us the regulations you want to achieve and see what the industry can come up with.
If the regulations are so stringent that they stall the process, prevent us from action or take us out of action for a serious period of time, they will have a negative effect which, in our industry, would have serious consequences. On the other side, I would say that good solid regulation that is achievable would help industry move in the direction you may want them to move in. Also, as you said, it would provide certainty for the investor.
If we end up with a disagreement between the federal numbers and provincial numbers and then end up in environmental approval processes that take forever, whether we have regulation or not, we will have that gap in supply, and that can have serious consequences as well.
Ms. Christie: One key thing to keep in mind is the objective we are trying to achieve. Often that is lost. We spend a lot of time looking at which tool we should use or not use.
If you can obtain the objective you want, be it reduction of mercury emissions or what have you, through either voluntary or regulatory actions, I am not sure why we would have a preference.
I think that voluntary actions have been getting a bad rap in that people think that nothing will be done if it is voluntary. If you look at the track record across a number of industries sitting around the table and others, you will see voluntary action has done a lot. You have buy-in and a better chance for continual improvement because there is that buy-in and there is a stake in it for the industry. There is a significant role for voluntary action.
The Canada-wide Standards are being called voluntary actions and my advice to the committee would be to look to some of the Canada-wide Standards that have been put in place and follow them down to the plant level. You will probably see, in most cases, they are no longer voluntary; they have been made mandatory through their provincial regulatory systems.
That is the key to me: Keeping the objective in mind and reaching the objective through either of the tools. There is a role for regulatory action, obviously; it helps keep playing fields level, as someone mentioned, and to ensure other goals, but there is still a role for voluntary action. We should not rule that out.
Mr. Adams: I do not want to repeat everything that Mr. Nantais said, because I echo those comments. However, perhaps there is a greater role for voluntary mechanisms on a North American basis where you have integrated industries. Voluntary mechanisms have allowed the automotive industry in Canada to achieve the most stringent national emissions standards in the world through a voluntary agreement to adapt U.S. emissions standards. Perhaps there is a greater role for a voluntary memorandum of understanding, and that type of approach, where you have integrated industries.
The Chairman: A cynic would say most industries enter into voluntary standards agreements under the threat of something else or in preference to something else.
I want to follow Ms. Christie's suggestion to take it down to the plant level and address the question to Ms. Laurie- Lean.
The Hudson Bay smelter at Flin Flon is responsible, however little they are in the aggregate, for a fifth of the mercury emissions that are anthropogenic in Canada. Applying Canada-wide Standards did not work there. That particular smelter has been targeted, perhaps rightly or wrongly or with justification, but addressing that particular plant in that way belies the concept of Canada-wide Standards. Or, is it a matter of cutting that part of a hedge that is sticking up too far to everyone else's level?
Ms. Laurie-Lean: I am not sure what you mean, because they are subject to provincial regulations. They have done a lot voluntarily. I read the testimony of Anna Tilman where she pointed out where the Hudson Bay smelter has gone from 20 tonnes a year to 1.5 tonnes a year. While that may still be a big number, going from 20 tonnes to 1.5 tonnes is a big decrease.
I am not sure what the reference is to the Canada-wide Standards. The company is subject to the pollution prevention planning notice under the Canadian Environmental Protection Act.
The Chairman: They are, and maybe I am wrong in characterizing the recent regulations that have been applied to them as a target. Maybe I misunderstood that. It seems to me that the Flin Flon plant was singled out in respect of the required plan. Have I got that wrong?
Ms. Laurie-Lean: They were all singled out. That is basically how you characterize it, because the pollution prevention planning order notice had targets specific to each facility: an absolute number each facility had to achieve for particulate matter in SO2. That is a factor to consider.
In the context of mercury, I think the Canada-wide Standard was referenced as the factor to consider. The issue becomes twofold. One is, we are not really sure how these pollution prevention planning notices, plans and declarations all work, and whether you describe that as a regulatory tool or a semi-squishy tool: it has both a voluntary and an involuntary aspect.
The reason that the Manitoba facilities are mentioned is because of their location; they do not have sulphur capture because they do not generate acid. There are certain options for dealing with mercury and other substances that are uneconomical or technically impossible there.
Compared to other plants in Canada, the technical and economic options for both facilities in northern Manitoba are very different. You get into a discussion of what the alternatives are and what you should do about it. I would not want to enter into those kinds of discussions of one member versus another member but it will be evident in the pollution prevention plans that they will declare on in November.
The Chairman: Out of curiosity, and you referred to it, Ms. Laurie-Lean and Mr. White, scrubbers, which contain charcoal and the like, can incidentally or intentionally soak up mercury. What happens to the charcoal once it soaks up the mercury, given that we cannot destroy it or create it? What do they do with did? Do they bury it and hope that it does not come back?
Mr. White: There are two separate processes. We can build a plant that contains a wet scrubber. If we happen to have mercury with a large component of mercury salts, the scrubber will remove those salts by dissolution in the water in the scrubber. That is then cleaned up and disposed of in a landfill site.
The Chairman: How is that cleaned up in a landfill? Is the captured mercury buried in a landfill?
Mr. White: Yes, it is buried as part of the ash residue from the plant. I have seen a number of landfills built specifically to prevent the ash from leeching this material into the ground. The sites have impermeable barriers between the bottom of the landfill and the ash.
We could use activated carbon, which is not used yet, but testing for the process is underway. For example, if the U.S. were to regulate that mercury had to be reduced, utilities would be forced to do make changes to their disposal system quickly, so the industry has been looking at what can be done. Activated carbon injection, whereby a carbon is injected into the back end of the emissions, will capture mercury, depending on how much carbon is injected. It is a quite expensive process and there are technical problems associated with the process. The activated carbon would then be collected and disposed of in a landfill site. The process must take the mercury out of the emissions, put it into something that has much less volume than the emissions have and then move it to an area where we can maintain control of it for long periods of time.
The Chairman: I hope that they are very long periods of time.
Mr. White: It is not the case that this does not occur naturally. The point is that we are talking about a higher concentration in a particular area.
The Chairman: I have one additional question. Ms. Christie, you talked about the unreliability of continuous emissions monitoring systems. Can we look forward to a more reliable system that will be useful to your industry? Is someone moving in that direction?
Ms. Christie: A great deal of work is being done in this area in the United States and in Canada. A couple of our companies have demonstration units in place. They are finding some good results when the system is first set up but, over time, there are significant maintenance issues associated with these demonstration units, so the finding is that they are not reliable over time. Hopefully we will be able to increase that reliability but we do not anticipate that happening over the next couple of years. Despite the significant amount of work being done in this area, we do not know whether we will achieve the desired results by 2010. It might take until 2012 or so to develop units that work reliably over the long term.
The Chairman: Thank you. The committee might have additional questions arising as a result of either this or some other aspect of its study on the CEPA. I hope that you will permit us to communicate those questions in writing. Should you think of anything you would like to add to your testimony today, please send the information to the clerk of the committee.
The committee adjourned.