Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 2 - Evidence - April 13, 2010
OTTAWA, Tuesday, April 13, 2010
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 5:30 p.m. to study the current state and future of Canada's energy sector (including alternative energy).
Senator W. David Angus (Chair) in the chair.
[English]
The Chair: This meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources will continue our study on developing a strategic framework for an energy policy for this great country of ours. This study has been ongoing for some time and I hope will continue for quite some time yet, because it is a large and important study.
We are fortunate to be able to welcome tonight, as our witness, a gentleman who is known to most if not all of us, Bruce Carson. It is nice to see him here with us this evening in his role as Executive Director of the Canada School of Energy and Environment. Mr. Carson has had a distinguished career in Ottawa for as long as I can remember in my 17 years as a senator. Before assuming his present functions, he was a special senior policy adviser to Prime Minister Harper in the PMO, Prime Minister's Office. Mr. Carson holds a master's degree in law, specializing in constitutional law, from the University of Toronto.
The Canada School of Energy and Environment is a research and educational collaboration involving the universities of Calgary, Alberta and Lethbridge, with a focus on sustainable energy development and environmental management. I know you will tell us more about that, Mr. Carson, but before we give you the floor, I should mention that this committee has launched its in-depth study on the energy sector generally, not only traditional sources of energy, fossil fuel-based sources, but also alternative energy sources that are becoming more and more in focus. Our idea is to try to pull everything together. In a country like Canada that is so blessed with such wonderful resources and is so diverse, we want to find the most efficient, clean and sustainable way to utilize these resources and satisfy the needs of the Canadian people, always keeping in mind the regional disparities and differences and, indeed, the different needs in each province.
We are sensitive to the constitutional issues. People always say energy and the environment are provincial matters, but I think we all know that they touch every aspect of the lives of all Canadians and, therefore, transcend some of these parochial matters. We are trying to find a way to work cooperatively with the provinces. In doing so, we have learned many other similar studies are going on in Canada, not on all fours necessarily, but enough that it made us sit up and realize that there is a possibility of massive duplication of work.
In that regard, Mr. Carson, we learned of the great things you are doing at the Canada School of Energy and Environment. Several other groups, such as the energy and environment policy framework initiative, have told us what they are doing, and we have agreed to share information and to work cooperatively going forward. When, ultimately, we are ready to report our findings and recommendations to the government, I hope we will have benefited from all the work out there. I believe you are on a similar path, and for that reason I was delighted you could be with us. I know that is a bit of a large mouthful, but I did want to say how pleased we are, Mr. Carson, that you could be here, especially given the study you are doing with your people. The floor is yours.
Bruce Carson, Executive Director, Canada School of Energy and Environment: Thank you, Mr. Chair. I should start by saying that I do not think you will ever have a witness in front of you who more appreciates the work of the Senate and senators than me, having worked here as a staffer between 1993 and 2004. I also have a lot of sympathy and empathy for your colleagues from the Library of Parliament. I worked there as a researcher in the law and government section between 1979 and 1981. I appreciate the opportunity to be here.
Preliminarily, before I get into my text, I think you are really on to something. It seems that everywhere I go, and every group that I talk to, including NGOs, non-governmental organizations, think tanks and industry associations, everyone wants to play in the energy area, and everyone has some particular part of the energy area they want to play in.
We are talking about energy policy and the development of energy policy. I have discovered just tangentially that not that many people have spent a lot of time thinking about energy policy. Many really smart people who are scientists have done a lot of work on energy research, but we need a framework to put around that research from a policy point of view. We would be happy to give whatever support we can, because we have been trying to funnel together all of the work everyone is doing so that we are all pushing in the same direction. We are all pushing at some point to have a product that we can give to you, senators, to then try to deal with the government on. As strange as it may seem, there is probably an appetite at this point, post-Copenhagen, to move along in this area.
You are on to something that would be of great benefit to the country. I will go into this in some detail, but we have these wonderful natural resources from coast to coast to coast, and if we get it right, then I think we can take advantage of it for years and years to come. If we do not get it right, then we would be in a situation where we may squander this wonderful asset that we have, just because we happen to occupy the northern half of this continent.
By way of introduction, I road tested this discussion two or three times before arriving here to see whether it was ready for prime time. I started in the Yukon at a small geothermal conference, and then with some law students at the University of Calgary, and then yesterday at a conference on NAFTA, North American Free Trade Agreement, and energy. There seems to be a real appetite for moving ahead on the policy area. Having road tested it a few times, I should get it right by now, but we will see.
The Canada School of Energy and Environment, CSEE, was set up in the 2007 budget as a Centre of Excellence for the commercialization of innovative ideas in relation to energy and the environment. As Senator Angus pointed out, the Canada School represents a collaboration of the three major research universities in Alberta, and with the opportunities presented by the School of Energy and Environment, the University of Alberta, the Institute for Sustainable Energy, Environment and Economy at the University of Calgary, and the Water Institute at the University of Lethbridge, we are able to call on all the experts at those institutions to help in whatever it is we are doing. The reason for going into this background is that, when I took this over full time after the 2009 budget, as well as it being a Centre of Excellence for the commercialization of innovative ideas, we decided it would be nice to move into a bit of a policy shop because, if I have any expertise at all, it may well be in that area.
We worked on environment policy before Copenhagen, and we will continue to work on that as we go forward to COP 16 in Mexico.
On the energy front, as I said before, a diverse group of think tanks met together in Winnipeg in the fall of last year. It included the Conference Board of Canada, the C.D. Howe Institute and the Pembina Institute and covers the waterfront. There were about 11 or 12 of them, as well as us, to talk about whether there could be any agreement on whether Canada needed a national clean energy strategy.
The other group that has joined is the Energy Policy Institute of Canada, which is an industry association representing energy industries from across the country in all forms of energy and includes the Energy Framework Initiative, which is mainly fossil fuels. In all of these discussions, we have been talking with John Manley at the Canadian Council of Chief Executives, and with Perrin Beatty and Shirley-Ann George at the Canadian Chamber of Commerce. Everyone is trying to do something in the area to move it along.
One of the reasons we are in this is the world is changing and Canada, because of its energy capabilities and reserves of both fossil fuels and renewable, is in a position to take advantage of these changes. Our concern is that, without a national strategy encompassing all forms of energy, we could very well miss the opportunity that is now being presented to this country.
The facts that underlie the energy in this country are fairly simple. It underpins the economic aspirations of every region in Canada. It represents the single largest private investor of capital in Canada and continues to attract the single largest slice of foreign direct investment, and these expenditures are right across the country. Canada is also the second largest holder of oil reserves after Saudi Arabia, due in part to the vitality and now accessibility of Canada's oil sands with 179 billion barrels of proven reserves.
We are also developing all forms of renewable energy, and in my short time working in this area, I found it interesting that a number of the companies that are into fossil fuels are also into the areas of renewables as well as doing research. To put the oil sands in perspective, the Canadian Energy Research Institute has estimated that the oil sands industry alone will add 3 per cent to Canada's GDP, gross domestic product, by 2020 and will create, during the period to 2020, $5.4 million person years of employment with 44 per cent of that outside of Alberta.
Other issues are involved in this, and there are debates about the supply of low-cost energy, energy as it relates to national security, the social and environmental impact of energy and where Canadian public opinion lies on climate change.
There are a number of international reports, but the most important is the one the International Energy Agency did in 2009, namely, their World Energy Outlook. It demonstrates the demand that the world will have between now and 2030. The study has its flaws. It does not take into account where the financing will come from to do the kind of exploration and development needed to satisfy their predictions. It also does not look at population increases, which must be factored in. For what it is worth, however, it is the baseline study on the increase of demand.
They have two scenarios in that study, and I am sure others have referred to them. One is the status quo baseline, dealing with the following: an increase in oil demand between 2007 and 2030 of 1.5 per cent per year, with an overall increase of 40 per cent; coal and gas, or the demand increase for electrical power generation, with an annual increase of 2.5 per cent by 2030; and renewables increasing but not to the same extent as the ones from fossil fuels. Then, to meet the demands of this increase — we are talking about China, India and the developing world as it becomes more and more developed — we are talking about an incredible investment of money. They estimate $26 trillion to 2030.
They have another alternative called the "low carbon alternative," their 450 scenario. Again, the experts who have put this study together think that some of the reduction in carbon will be met by energy efficiency in buildings, industry and transport, and in new technologies. Even then, the amount of increase in the use of fossil fuels and renewables would represent something in the neighbourhood of $10.5 trillion of investment.
Both scenarios are costly, and when they talk about the supply that is needed, they do not talk primarily about where that supply will come from.
Regarding the supply side of the equation, for a variety of geopolitical, economic and environmental reasons, many untapped resources are going undeveloped. One of Canada's great benefits is that it is an open democracy, it believes in free trade, and it is not dominated by state-owned oil companies. The world we have moved into, however, is a growing domination of national oil companies. Eighty per cent of the world's reserves are owned by these companies, and energy has or could become a geopolitical lever, which could lead to economic and social unrest.
We, as a country and as a net exporter of energy, stand apart from other countries that do export.
The future, as I have said, is not about limiting energy choices but expanding them and expanding access to these resources. The road map that we should be developing should look at all forms of energy.
The chairman mentioned the Energy Framework Initiative. We have been working with them. When they developed the document they released late last fall, one of the things they talked about was general principles and then pillars upon which to build.
If we are going to talk about building a national clean energy strategy, I think the first thing you have to look at is some principles. They talked about economic underpinnings, social underpinnings and environmental underpinnings. On these principles, they placed some pillars, which I have referred to in my notes. I think they came up with six, and I will go through them.
It is a commitment to sustainable use of energy, both dealing with delivery and consumption. What I found interesting in my time in dealing with this is how much emphasis is now being put on reducing consumption, as opposed to consumption as usual and increasing the extraction of fuels.
The pillars are a commitment to sustainable resource development, production and transportation; ensuring a sustainable approach to energy and climate change; ensuring an ongoing social licence to build and operate; continuous improvement in capacity and capability — leading research and technological innovation; and a collaborative approach to intergovernmental engagement — coherent national policies.
Everyone in this room knows that this is an area of, I was going to say, shared jurisdiction, but if you were talking to a province, they probably would not tell you it was shared jurisdiction; they would say we own the resources. However, there is an overarching federal involvement in this from a policy point of view.
I have had access to a paper, which Roger Gibbons from the Canada West Foundation has put together. He would be a guy you should get before you, if you have not already. His view on constructing a Canadian energy policy is to look at the Canada Health Act. Look at what we have done in health, where we have a Canada Health Act with general overarching principles, and the implementation or the conduct of health is left to the provinces under the overarching umbrella. That is a good way of trying to figure out how we get over the intergovernmental issues.
The Chair: Mr. Carson, you are doing a fantastic job. I notice you are heading into the next section on energy as it relates to the environment. You know the name of this committee has caused us to have a bit of an identity crisis. We are called the energy, environment and natural resources committee all in one, and some people suggest to us how can you manage. It is like an oxymoron.
We see we have two departments here — we have NRCan, Natural Resources Canada, on the one hand and Environment Canada on the other — yet you mention in the same breath the work you are doing with Copenhagen and the environmental challenges being addressed globally on a multilateral government-type approach, which may or may not be the right approach.
As you go on in this next section, it would be helpful to us to know to what extent we should spend time and effort on the environmental aspects, given that everyone now seems to accept the science. There is man-made climate change, and environmental challenges that are obvious and that industry recognizes must be addressed by the private sector in terms of energy use and development. I say that because I know you understand where I am coming from.
Mr. Carson: Going into what I have referred to as building blocks on the pillars, I wish the Energy Framework Initiative had called the pillars "foundation stones"; then it would be easier to put building blocks on top of the foundation stones. There are a number of building blocks that we can put on top of the pillars, and the first one we have to take cognizance of is the environment. It would be foolish not to.
However, if you are developing an energy policy, I do not think it has to be completely dominated by environment. If you think it is bad having your committee named that, I also run something called the Canada School of Energy and Environment, which sort of pulls in two different directions.
I actually do not think they need to be pulled in two different directions; I think they marry up quite nicely. Any energy policy has to make sure that the energy we are dealing with is clean energy. That is why we talked about a national or Canadian clean energy strategy. It has to be clean; we have to deal with the reduction of carbon.
I say in my notes here and I think it is important that we start taking a look at the price of carbon as a way of reducing emissions — just reducing the amount of carbon from Canada's energy mix, and also taking into consideration, as part of environment, the use of water and pollutants with regard to energy.
There are a significant number of cross-cutting issues that you put within the rubric of a clean energy strategy. Environment is obviously one of them; the other one is supply and demand.
We are fortunate to be a net exporter of energy. We also have to recognize that we are the highest energy per-capita users in the world. One of the things we have got to look at is a strategy that would address the reduction of consumption.
One of the ideas that has been put out there are things like smart meters, allowing people to control their own use of energy. Peter Tertzakian with the Alberta Research Council is another person you should hear from, if you have not already. He has a couple of books dealing with this issue. One is A Thousand Barrels a Second and the other one is The End of Energy Obesity.
His major thesis is we should look back from the use of energy to where it is produced. We should be cognizant, when we turn on a light bulb or turn on the television set, of how much energy that causes back at the source. I think that there is a lot of work that could be done in that, which should be part of a strategy.
You also have to look at trade and export beyond the United States. It is great to have a ready market for our product but it is kind of scary that, if anything happened to that major market, where would we go next? I do not think we are as prepared as we might be to move oil to the West Coast to have it shipped to the burgeoning markets of China, India and Japan. We have to be aware of that as well.
We have a number of ongoing initiatives with the United States. The Clean Energy Dialogue is but one of them. We are working in concert with the United States on a number of energy and environmental issues.
With regard to manufacturing and technology, it will be through transformative or innovative technology that we will be able to reduce greenhouse gases. We have to look at how we develop a climate for investment.
Alberta, through its clean energy or clean technology fund, has an interesting way of collecting money to reinvest in new technology from those large emitters whose greenhouse gas output go beyond the set amount. They pay into a fund and that fund accumulates a fair amount of money to be reinvested in technology.
Regulatory issues were addressed in the Speech from the Throne and I think in the budget as well. It is not so much the reduction of regulation to allow environmental issues to either disappear or to be gotten around; it is really to try to normalize the regulatory issues so that you are not complying with the same thing two or three times.
One of the most important things we talked about at the NAFTA meeting I was at yesterday is education and human resources, and training is part of this. There is a part of the workforce in energy that may be close to retirement, and the universities, along with industry, should be ensuring that those who are in university now are actually being exposed to the kind of technology that will be necessary to reduce greenhouse gases.
Those are some of the thoughts I collected from people who are a lot smarter than I, and who have put a lot of thought into trying to put together what would be the bare bones of a Canadian clean energy strategy.
The Chair: Mr. Carson, that was clear and well presented. It is, as you said in your last couple of sentences, the bones or an outline of how we might fill in the meat on the bone and present that as the policy.
I will exercise the chair's prerogative before going to my colleagues for questions. You have stated a couple of times that you are engaged in a study similar to ours, and you have nicely offered to work collaboratively with us. I think it is a great thing because, as you say, we may be on to a good thing here. Clearly, you are too.
It would be interesting for us to know your methodology; how are you proceeding with your study? Are you sitting in the ivory tower, calling in people like we are in a way, or do you have some magic bullet that you are using to get this information?
Mr. Carson: No one would ever accuse me of sitting in an ivory tower. Dealing directly with the companies themselves is the beauty of being involved in a number of these organizations that have industry members. I do not think I am letting anything out here. If you go to Hal Kvisle, who runs TransCanada Pipelines, and say, okay you run Bruce Power. You have smart people working for you, so tell me what your policy issues are going out 20 years. The same with Steve Snyder, who runs TransAlta — tell him to run coal-fired electricity plants. Tell me what your issues are going out those many years.
These are people who have given a lot of thought to how the industry will survive over the next number of years: Where will the markets and the technology be and that sort of thing?
There is no magic bullet to this. You just put it all in a big blender and mix it around when you get enough stuff. However, I think going to the industries themselves will be where I think you will get a lot of your answers.
I have been surprised with the lack of people — and I know you have heard from some of them — who have actually spent a lot of time in the energy policy area. One of my first encounters was at the University of Calgary when I was trying to work out where policy fit within something called Carbon Management Canada, which the federal government has been wonderful enough to give $25 million to and I think the Alberta government will be giving it some money later. It is one of these networks of Centres of Excellence, grouping scientists across the country to research the reduction of carbon.
I found it interesting that policy was last on the list of the people I sat down with, those who were proposing this. It was all the scientific stuff first and then they would fit policy in at the bottom. My retort to that was: If you do not know what the policy is, then how can you put all the scientific stuff in place?
I tried to have it back to the top. I was not successful. Of the four themes of Carbon Management Canada, it is theme four. That is the way it goes.
This is a long answer to your question, but if you start looking at the players in the various sectors, that might be helpful.
The Chair: Right. That is a helpful answer. I would add one other point. A large delegation from this committee recently attended the Globe 2010 energy conference in Vancouver. Those of us who had been to previous Globe conferences, not including me, noted a 'big C' change.
To crystallize what we saw, it was recognized now that the science is real and the governments are out there, but the governments will not solve it. It is a global problem, but industry has woken up and said this is a real challenge and we are the ones who have the facility to make fast and efficient decisions, we have the money, and we have to open up our wallets.
I do not know if you agree with this. This is what we heard. The senators on this committee are saying it is great, and now we have to give them a road map, based on what they and all their colleagues are saying, because they still do not want to spend the money on the wrong mouse trap.
Would you agree? Does that coincide with your own findings?
Mr. Carson: I think there is a general acknowledgment amongst industry that this is necessary; there is a real understanding. One could say it is incredibly self-serving, but it is what it is. It is also self-serving to the country, so there is a lot of mutual benefit.
Industry will have to develop this because it will not go from government to industry; it must go from industry to government. There is a lot of interest amongst the various corporations that are involved in energy and energy users, like General Electric, DuPont and companies like that, to actually get it right. I would only agree with you.
It is interesting how you would characterize the Globe 2010 as an energy conference. It actually was an environment conference. Zoe Addington from our shop was there and came back with the same view: That, although it was billed as an environment conference, it actually started to talk more and more about energy and what has to be done in order to protect this wonderful resource we have to ensure that we do not squander it.
Senator Mitchell: Thank you, Mr. Carson. It was a very interesting presentation. It is great to have someone from Alberta here with that depth of knowledge. You mentioned that you dry-tested this presentation in a couple of places and it worked. It was perfect. It is perfect for what we need. You have really advanced our thinking — my thinking, at least — about how we would structure our study. Thank you very much for that.
You also mentioned the importance of pushing policy up ahead of science and other considerations. We have had quite a bit of science. What you are saying conforms to what Mark Jacquard said in a meeting recently, which is that we should get some policy and get started. I think we are kind of at that point.
I am particularly interested in the environmental part of your presentation. You mentioned that part of the framework would be to ensure that policy tools such as carbon pricing are explored. I have two questions there. How far along are we in the exploration of those mechanisms? If you had to choose at this point, which one would you prefer, cap and trade or a carbon tax?
Mr. Carson: Thank you, senator. Looking around the country, Alberta is an interesting experiment. It is not an experiment anymore. There is legislation and there is a green technology fund up and running, chaired by Eric Newell, and it has money going into it. They have a price on carbon. Some could argue it is too low, but it is a price on carbon. It is interesting how it actually works once they have done it. The people who are administering that fund have put out a call for expressions of interest, and I think they have a fund of more than $100 million. I think they ended up with well over 200 or 300 proposals that could have totalled about $1 billion. There is interest in that once you do establish a price on carbon.
Where do we go from there? The Turning the Corner Plan had a technology fund. We never really established a price on carbon, but there was a technology fund and a price on carbon would have to be established. I always thought that cap and trade really made a lot of sense if the United States did it too. We would have a North American cap-and-trade regime, with Mexico as well, obviously. If the United States will not play in this area, then what will they do? I do not think they will do a carbon tax either.
I will be in Washington at the beginning of May, with the Premier of Alberta, talking to a number of legislators there about what Alberta is doing. I wonder out loud whether we will have a continental regulatory approach where we have the same baseline of 17 per cent below 2005 or 2006 by 2020, and there is something out by 2050. How will we arrive at a price on carbon? David McLaughlin at the National Round Table on the Environment and the Economy has done a lot of studies on what would be a good price for carbon, and his work on that is as good as anyone's. It is hard to see either a carbon tax or cap and trade being put in place in the near future. If the United States will not do cap and trade, there is no point in our doing it. It would not make sense. Will we do it and harmonize with Europe? I do not think so.
The long answer to your question is that I really do not know, but I do like the Alberta experiment where they put a price on carbon and there you go. They have a fund operating, and it is actually putting money back into the economy for research.
Senator Mitchell: My next question relates to the idea you suggested that any policy in this regard needs to establish some component of energy production through clean, renewable sources. Do you have any idea of what would be a reasonable percentage goal in that regard?
Mr. Carson: It will be difficult, because of the amount of investment and the scale, to ramp it up to 10 per cent, but it would really be nice if it were somewhere around 10 per cent by 2020. We were talking about the mix of renewables so it starts taking the pressure off fossil fuels. I do not have any magic number, but I know a lot of innovative technology will have to come into place in order to reach that, especially with regard to the storage of electricity and that sort of thing. It would be great to have a goal somewhere around 10 per cent by 2020.
Senator Mitchell: Something you mentioned captured my imagination, and that is this idea that Alberta is often heard to say that, if the U.S. would not buy our oil — I do not think that is likely a possibility, but it is a pressure — then we will just send it to China and elsewhere. You mentioned that that is not as close a prospect as it might be, given the status of the infrastructure.
Mr. Carson: Yes.
Senator Mitchell: Could you elaborate on that? What is the status of it and what more needs to be done?
Mr. Carson: There are proposals for pipelines, but they are only proposals. If we are to diversify the market, we can talk about liquefied natural gas and that sort of thing, but really we are talking about moving oil out of Alberta and Saskatchewan to the West Coast. I was involved only peripherally with some of the dealings with the Mackenzie Valley Pipeline. I was an articling student when we first got into that, which was a long time ago, longer ago than I wish to think. It will be difficult, given the atmosphere and regulatory approach in which we now live, to see a pipeline being built any time soon. The work you are doing could address that. The Aboriginal people, the provinces, the community groups and the companies themselves could all move forward in a regulatory structure that does not harm the environment. A wonderful thing for senators to look at as you go through your report is how you can incent, through regulatory reform, doing something like that more quickly. Right now, if we say to the United States that we will take our ball and go home and go elsewhere, I think they would say, "Good luck to you," because there are not many other places to go.
Senator Massicotte: Thank you, Mr. Carson, for being with us. I want to pursue the discussion about the choices we have. You have a cap and trade, a tax and regulations. I read this morning an interview by Minister Prentice where he said the Americans are looking at two choices, cap and trade or maybe regulation. I want to hear your reaction, but I would suggest that if you had to go the regulatory method, which means you put in a bunch of policies to force industry or producers or consumers to change their habits, the results would be scary. We already get a lot of reports saying we all know what the problems are, and we know the market would allow the solutions to happen most efficiently, but there is a lot of government intervention or social policy or social pressures which just delays us getting there.
If by chance the Americans went regulatory and, using your argument, we had to take the regulatory approach, would that not be another major burden and impediment to getting the correct answer?
Mr. Carson: It does not seem to have been in Alberta. That is the only thing I can keep raising because it is simple: Here is your limit. If you go over your limit, you pay into a fund. Give me my target and give me a fund to pay into.
The problem is whether this is actually a legitimate compliance option internationally. That is another issue we will have to deal with as we go along. If I am a country in Europe or some other place, I might say: All you are doing is delaying any action on greenhouse gases. You are not actually doing anything. You are only paying into a fund.
That is more of the concern I would have rather than it will be complicated. Whatever we do will be complicated.
We also have to address the downstream users sooner or later. In all of the meetings I attend, we always talk about the large final emitters. We are not talking about the people who use the oil, gas and energy itself. I do not know when someone will come to grips in dealing with the downstream user. However, until we come to grips with this and that Canada is the largest net energy consumer in the world, we will not change consumption habits. That will also be a problem.
Minister Prentice is not wrong to say that whatever Canada does has to be harmonized with what they do in the United States. It is not that they will lead us or we will lead them. It makes sense from a competitiveness point of view to be aligned — maybe not harmonized, but certainly aligned. Canada will do different things with its electricity sector than the U.S. will do with its electricity sector.
If Canada is not to do cap and trade, then, from my point of view, the regulatory approach is the better one. I think we can do it in a way that is not complicated. However, you are correct; as we get moved downstream, it could get complicated.
Senator Massicotte: Let us go through that argument. It is frustrating to think that we cannot do much until America decides what they want to do and we need to follow.
The argument I hear is that we have an international commodity — call it what you wish, oil and gas — for which there must be a competitive international market. I appreciate that you cannot tax the producer to the point where he is uncompetitive internationally. You have to make a decision if you go with a carbon tax at what level to tax. You can make a choice to tax the consumer, like with the GST, goods and services tax. The consumer is not internationally competitive and will not compete internationally. Maybe Americans would influence us at the level we tax. Maybe we should do something more at the downstream level. Maybe there should be a price signal for people to starting changing their habits.
For 20 or 30 years, we have talked about "buy Canada." I read recently that only 0.5 per cent of consumers are sensitive to it. Unless there is a price signal or cost that orients behaviour, we may not get anywhere, irrespective of our wishes. Please comment on that.
Mr. Carson: Much of it has to do with education. That is where we have really failed. When I say "we," I think of educational institutions, et cetera. The idea I have heard in the last while is "energy literacy" where consumers start to realize that they can control the amount of energy they use. A real educational component has to be a major part of any strategy the Senate develops so that there is recognition that the consumer can actually control their energy consumption.
Some strategies implemented in a number of European countries, such as Norway and Sweden, are to increase the price of energy and concomitant other measures to ensure that those at the lower end of the income scale are not completely disadvantaged. That involves a lot of tinkering with the tax system. To avoid that, it still comes back to some type of regulatory approach.
With regard to the United States, we can align our targets, and we can work with them on individual sectors. The government recently announced mandatory tailpipe emissions standards. We are able to align that with the United States. As I said earlier with regard to electricity, Canada's electricity standards are further developed and will be more stringent than in the United States simply because we have much renewable electricity generation.
There are ways to do this in which we can start moving. The trick in all of this will be educating consumers to exercise the option to conserve more than they do now.
Senator Lang: I appreciate your spending time with us this evening. I hope you had a good meeting when you were in the Yukon last fall.
I will begin with a part of your statement where you said your school is leading a group of think tanks from the C.D. Howe Institute to the Pembina Institute. You have 11 or 12 groups involved in working with you to define a national clean energy strategy.
When are you looking for a completed document so that a body like ours could review it?
Mr. Carson: A number of groups are working together. The one that has a deadline is the Energy Policy Institute of Canada, EPIC, which is the industrial group composed of 25 to 30 energy corporations, and corporations that use a significant amount of energy. They look at a two-year horizon wherein they are done if they do not have this accomplished within two years.
I am hoping to have a document that at least sets out bare-bones elements by the latter part of the summer. We could then start discussing it with your team. The need is sooner than later; the window to do this is in the next year.
Senator Lang: That goes to our concern around this table and elsewhere that the clock is ticking. We have said 2020 and 2050. We are almost in 2011 and I do not see much being done other than a lot of meetings held with, perhaps, not much done regarding clean energy development across the country.
Going further, with the overall framework that you spoke about — the federal responsibility outlined versus that of the provinces — I would like you to elaborate on that because of the difference constitutionally between our responsibility and that of the provinces, and perhaps what you could recommend to us further in that area.
Mr. Carson: Any national strategy on this has to be the kind of thing that both the federal government and the provinces buy into. The point I have tried to make with the groups I have talked to is that there is a significant amount of cross-cutting issues that affect in a positive way all of the provinces and industries — for example, increasing markets.
It would be difficult for any province to disagree with the federal government saying, here is our strategy that we want to sit down and talk to you about, and part of it is ensuring that we increase markets for our energy. How we do that — and that is part of the neat thing about this — is that is more of a federal responsibility dealing with international trade than it is a provincial responsibility, although provinces are involved in it.
That is the way to deal with the various provinces. It is not like I am the federal government and I am here to help because that would not work so well. It is more like we are the national government, and here are some things that we can do in our spheres of competence. If we all work together, because we are dealing with different kinds of energy across the country, the end product is pretty good.
That is the way I would try to approach it. The federal government sets up these overarching themes and within it you have components that cut across, and that are not inimical of or do not run against what provinces may want to do.
Senator Brown: I was pleased to hear you speak about downstream. It seems to me that the big elephant in the room is the consumer. National Geographic put out an article some months ago that showed that houses and buildings were one of the largest users of energy and the largest amount of waste comes off them unless they are properly insulated, et cetera.
It seems like the simplest thing we have as a tool is some kind of flexible taxation. You can have all kinds of regulations, but you have to keep changing them and trying to enforce them. If you are taxing both at the production level and at the consumption level, it seems like you are educating the consumer pretty fast.
In Europe, it is nothing to see four or five or six dollars a gallon for gas. They have had it higher. It goes really high in that area sometimes, but that is what also has allowed them to develop some really energy efficient automobiles. I think we could do the same thing if we look at the taxation thing and study it closely as to how much flexibility we could put into it.
Mr. Carson: From a practical point of view, it would be the increase in cost, however you get to that increase in cost, plus a lot more. The one thing I have not mentioned, and it has come up from time to time, is that it would be interesting to talk to the municipalities about this as well. They are the ones that control the building codes. Provinces do, but the municipalities implement them, and also the land planning in major urban areas.
I spend some time in Calgary now. As you know, senator, there are houses all over the place. They are big houses and they are way out in the suburbs. I do not know how, other than through a lot of education and a lot of different behaviour, you tell people that the great Canadian dream of owning your own home in the suburbs of some great Canadian city is not actually that; it is owning an apartment downtown so that you are not spending the energy going back and forth.
The other things that we do not spend a lot of time on trying to promote are teleworking and those kinds of things that cut down on energy use. We do not promote those things to any great extent as well.
We can talk about increasing the price, but there is a lot more to it than just increasing the price. Dealing with the municipalities and what they do is one thing. Senator Angus and I had the privilege of being in Copenhagen — I had never been there before — to see all the bike lanes and the amount of bicycles that are used and the way they use bicycles. It was pretty cold when we were there and they were all out. I did not know this, but you dare not walk on the part of the pavement or the part of the sidewalk that is designated for bicycles. They do not care; they will just run you down. Fortunately, Senator Angus and I are fairly agile so we managed to escape that.
It is a whole different mentality of looking at it. They seem to have been successful. It would not be a bad idea, as we go further into this, to look at that. People have studied this and know what has worked in countries where the consumption of energy has been reduced.
One of the things that struck me — because I do not travel that much outside of Canada — is that when you go over there, you realize they do not have any real source of fossil fuel energy that they are sitting on. I know that sounds naive from a guy my age; you do not think that every country in the world is as blessed as we are, but neither do you think that there is a situation where the cutting off of a pipeline to a country would throw it into massive chaos.
That also contributes to the fact that they are able to work to adjust the attitude of people who are the consumers. There is much to learn from both the municipalities and also from countries that have been able to reduce consumption.
Senator Banks: Talking about the downstream issue, this committee released a report a few years ago that said what this really boils down to is we have to change the way people live — not just change the way they consume, but the way they live. We arrived at the conclusion after having looked at several other constituencies and regimes, and other countries and some states that had changed the way people lived, not just in respect of energy consumption but smoking, for example, health issues and all sorts of other issues. The conclusion at which we arrived, based on that consensus, was that, if you are to change the way people live, which will affect their consumption of energy, you have to do all the things you talked about. None of them will work by themselves. Price points will not work by themselves but they have to be there. Education will not work by itself but it has to be there. Controlling and striking fear into their hearts will not work by itself but it has to be there.
We thought it was an overall, all-in-one "bowl" and you have to do all of those things. If you omit any of those things, then you will not affect the consumption. Is that consistent with what you were saying?
Mr. Carson: I think so, senator. I think in response to Senator Brown, I was trying to say you can increase the cost, but I think we have seen that people will still consume. People will perhaps buy smaller cars for a limited period of time until the price goes back down.
You are right: It is everything together. That is why it would be good to resurrect that study and also to call in people as witnesses who have been part of watching the modification of behaviour in countries in which they have actually been able to reduce consumption. That will certainly be one of the keys to any energy policy or strategy that you come up with. It must deal with the downstream.
Senator Banks: In respect of what Senator Lang was asking, what was the object of the EPIC report? We have in our mind we will be able to put forward a proposal for a national energy strategy, plan or practice — whatever term you choose. What will EPIC say at the end of the summer?
Mr. Carson: That I do not know because we are in the middle of our work. I am hoping we will have some really good ideas from the various sectors as to what the policy parameters should be around, say, nuclear and wind energy and that sort of thing. I am hoping we would have that before the end of the summer.
I am hoping we would have some overarching principles that I can better articulate than I have done today on what the main themes are that would be helpful in trying to put a strategy together.
You would get policy to which the industry people would say "it works for us." As I said, it may at first blush be self-serving but how do we sit down with government? It cannot be that self-serving, since it hamstrings the government, that it is not palatable for your committee to buy into and look at in a positive way.
I think that is where we might be by the end of the summer but it would not hurt for us to be in contact with the Library of Parliament people to keep them in the know as we go through one milestone after another.
Senator Banks: Let me ask you the chicken-and-egg question. You talked about an overarching federal responsibility and you gave the national health plan as an example of a template that might work. However, then you also said the solutions really need to come from the industry — by which I presume you mean the whole energy concept —
Mr. Carson: Yes.
Senator Banks: — to government.
In my mind, those things are at odds, even if that is oversimplified. It is the chicken and the egg. I have the impression that most energy companies, the traditional extractors of carbon energy, are saying in effect "we are prepared to begin to solve this problem. Just tell us what the rules are and then we will figure out how to do it." That is on the one hand. Then we also know we are relying mainly on industry, its resources and its people to come up with solutions.
This is after you, Alphonse, and you, Gaston. In the meantime, there is not much happening. Which is the chicken and which is the egg?
Mr. Carson: In the development of the sectoral policy pieces, you take from that and can develop the overarching policy parameters. You need to have one before the other; you need to have the sectoral pieces from industry and then overlay on that the view of these cross-cutting issues, as I have referred to them.
They develop at the same time as you move along. However, we do not want to come forward with a national clean energy strategy that tanks all forms of the energy industry. When I say "we," I guess I mean me and the people outside of government now. It must be something that is supported and that will help the energy industry develop as environmentally conscious, develop new markets, and that sort of thing. You have to look at it from the point of view of the sectors and then layer on top of that what the overarching vision is.
Senator Dyck: I am from Saskatchewan, and I had the pleasure of visiting the University of Regina just in the last couple of weeks. We looked at their carbon dioxide capture and sequestration research facility. My question is with regard to that particular technology.
In your estimation, do you think that is a viable option in terms of the kind of work that goes on within your school? Would it be the type of thing that would be commercially viable and, if so, how long do you think it would take before it could become something that could be up and running in a large-scale format?
Mr. Carson: It is up and running elsewhere, so I think it is expensive. There is no question about that. However, as someone explained to me a while ago, the first electricity plant was probably expensive. Therefore, I think game-changing technologies are always expensive. It is just that they become more and more available across the various sectors and they become cheaper to implement.
I am not so concerned about the cost. The issue for me would be all the soft science stuff around carbon capture and storage and the regulatory approach to it. Who will do the insurance on it? With the projects Australia has, the country itself has taken on the insurance issue.
There is a lot of soft science stuff that must be developed at the same time as the technology becomes better perfected. We are working through the clean energy dialogue with the Americans. There is a lot of work that is going into that.
The other thing I remember is from discussions I had with the former clerk, who did more travelling than I did. Coming back from Germany, we were talking about the technology there. They may have the technology but we have the geology to actually implement and test it.
It is important that we do it and it is important to do it in a way such that we get it right from a regulatory approach, as well.
Senator Dyck: You have brought up the issue of regulation, and in your document you discuss an effective regulatory process and respecting the needs of developers, investors and all stakeholders. Within the group of stakeholders, would you include people like the First Nations?
Mr. Carson: Absolutely.
Senator Dyck: In the consultation or development of policies, do you have organizations at the table? How do you include them within the development of those regulations?
Mr. Carson: I am glad you asked that because I have not dealt with that at all. I have discussed this with Shawn Atleo, the national chief of the Assembly of First Nations, with whom I worked when I was here. He and I co-chaired a task force on specific claims, which was successful.
We have talked about how to involve the First Nations in trying to reach the solution in this. One of the mandates of the Canada School is a convening mandate, and we are very fortunate to have it and the funding from the federal government to pay for being able to convene the right group of people at right time.
The chief's view was that we should get together industry, First Nations leaders from Canada and the United States — he has been to the U.S., looked at what they do there, and seemed quite enthused by some of the stuff he had taken away from the United States — and governments from both the federal and provincial levels, and have a meeting where we talk about the various aspects of how First Nations can fit into the regulatory approach in a positive way. It is something we are considering doing.
Regulatory reform, from my point of view, would be not so much assuring someone that the development will go forward but at least truncating the timelines. That is the major issue that everyone has with regard to regulation. It is not that it is duplication but it is the timelines that are involved. These are large investments that people will make, and they want to do it in a timely way. Something that takes ten years may be great if it only took five, but at least at the end of the five years you would know whether you have it as opposed to ten. That is one of the more important parts of regulatory reform.
Senator Seidman: I truly appreciate the title of your notes that you gave us, which says the "need for a truly national clean energy strategy for Canada."
In your presentation, you said we need a road map that looks at all energy sources currently available and how we can develop them more responsibly and efficiently. You talked about pillars for a national strategy forming the foundation, and then you said there are the blocks that go into building that strategy.
I would like to talk about one of those blocks, one that I think someone else already brought up, and that is the energy/environment piece. You say the relation between energy policy and the environmental agenda is critical, so that we should explore carbon pricing. Being new to this committee, I would appreciate it if you could tell us how the price might be determined and what the frame of reference might be for the regulatory authorities.
Second, related to that pillar, where you say reduce the other environmental impacts from energy, including water, air quality plus human health, could you elaborate on that?
Mr. Carson: With regard to carbon pricing, as I said before, certainly, from the meetings and the discussions we have had, if there will be a price on carbon, it would be advantageous if the price on carbon was similar across North America so that we can remain competitive with our friends in the United States and Mexico. Setting a price on carbon would be one of the first parts of it.
The second part is doing it in a way that affects the way people act. If you had any of the NGOs in here, they would tell you that we will not affect behaviour until we put a price on carbon.
How do you do that? Frankly, I do not know. The European Union put a price on carbon in a cap-and-trade system. It did not work too well the first time they tried it, but it seems to have worked out fairly well now. Alberta has a price on carbon, as I said to Senator Mitchell. It is not trial and error, but we have to look around and see what has been successful and what has not been. Certainly, one could argue that perhaps the price in Alberta is too low, but it is in a functioning technology fund, so it is working.
I do not know how, other than the mutual governments of Canada, the United States and Mexico saying that the price of carbon will be X. However, in meetings we have had, there is great concern that in an economic downturn putting a price on carbon would only make the downturn worse. Whoever is trying to work this out will have to balance the economy and the environment and try to figure out what would be a price on carbon.
The national round table has done a fairly extensive study on how to arrive at a price on carbon, whether it goes too high or too low and how it influences behaviour.
In putting a report together, look at what the round table has done, but also look at what has been successful. One of the things I would be concerned about is ensuring that the price is uniform across North America.
One of the main concerns coming out of a lot of the criticism of the oil sands is the perception that a lot of water is used and is not recycled, and there are concerns that there may be seepage into water systems and that sort of thing. That must be part of any energy/environment type of structure we come up with that addresses whether, in fact, that is the case — I do not know — and to ensure that that is not happening.
With regard to pollutants, again, that is important with regard to human health. There is a human health component of energy and environment that must be taken into consideration in putting together this kind of strategy.
Senator Dickson: Mr. Carson, I was impressed with your presentation and the fact that you are now the head of the Canada School of Energy and Environment.
Coming from the East Coast, I was more than pleased because, on the supply side, one cannot argue that the resources appear to be, at this present time, on the West Coast, B.C. Tonight, Mr. Chairman, I am sitting in for Senator Neufeld, so even though I am from the East Coast, I would have to vote for the West Coast tonight if there were an issue. Because of my interest in energy, I hope you invite me back as a guest from time to time.
Mr. Carson, have you spoken to many people in Atlantic Canada? We have some think tanks down there, and universities, and Premier Williams is very interested in the Lower Churchill project. What work has been done as far as Atlantic Canada is concerned?
Mr. Carson: I am glad you asked that, senator. It is great to have a job. I am lucky to have the one I have.
Elizabeth Beale, who heads up the Atlantic Provinces Economic Council, is part of this think tank group and has been quite helpful in trying to move this forward. I was fortunate during the past summer to be invited to the joint meeting of the Atlantic premiers and the New England governors in Saint John, New Brunswick. It is Eastern premiers and New England governors. As I said to Premier Charest, I did not know that Quebec was an Eastern province, but he is part of that group.
What they discussed there must be all part of this, senator. They have done work on tidal. When I was there, the study that was to take place was actually approved. Everyone was pretty happy with that. We also have to look at all of the work being done in the offshore down there as well as in other areas. We are fortunate to have as part of this think tank group the Atlantic Provinces Economic Council.
The other part of it is Carbon Management Canada, which I have not talked about very much; it is this network of Centres of Excellence with its hub at the University of Calgary, and includes researchers and universities from across the country all combined to study the reduction of carbon. It includes scientists from both Memorial and Dalhousie and other universities in Eastern Canada. We are looking forward to that getting up and running in the next year and involving them more in this as we go forward.
You are absolutely right that the energy security issues of Eastern Canada are different than those of Western Canada. The energy security issues of Western Canada deal with markets. The energy security issues of Eastern Canada deal with where you get the stuff if you do not produce it yourself. That pipeline ends at a certain point. That is something we have to take into consideration. Part of our report and your report has to deal with the way Canada looks at energy security, and the West looks at it one way and the East a completely different way.
Senator Dickson: On the demand side, how do you forecast the energy demand in the Northeastern United States? That would be one of the drivers to develop, for example, the Lower Churchill as well as tidal. Tidal is 25 years out. I was around when they did the low head hydro down in Annapolis. That was about 1979 or 1980. Tidal is way out there. I am very supportive of that project, but Newfoundlanders are sitting on an immense resource, and likewise Quebec has an enormous resource of tidal as well. Is there or is there not a market in the Eastern United States?
Mr. Carson: That gets to another point of smart electric grids. There are so many different parts of this that it is hard to corral it all into one kind of strategy, which is your problem and my problem, I guess. The present energy grids are old. They function, but they are really old. If we are to bring on all these new sources of electric power, how will it be transmitted to this wonderful opportunity to sell it in New England without a huge investment in transmission?
The other thing I would mention is the wonderful development of the offshore off Newfoundland and Nova Scotia and how that can fit into an energy security development for Eastern Canada. The very expensive part of this will be the transmission, let alone the development of the Lower Churchill. These are major projects that will have to be undertaken.
When you look at the electricity grids in Canada, they all flow north and south, not east and west. One of reasons we actually got involved with all of this think tank stuff came out of Jim Carr and Sandy Riley at the Business Council of Manitoba trying to figure out how to do this east-west grid in any kind of way that makes sense economically. These are major projects that will have to be undertaken at some point to ensure that, when you walk into the office in the morning, you can flick the switch and the lights come on.
The Chair: I should point out that Senator Dickson is on a roll today. He gave his maiden speech today. I command you to read Hansard tomorrow because he did a great, energetic job.
Mr. Carson: Senator Dickson and I have known each other for a long time. One of the things that I did while I was here and am particularly proud of was trying to settle the Crown share issue in Nova Scotia, which Senator Dickson knows more than about than I will ever know. At least we did settle it.
Senator Dickson: When you look at the amount of money for new technologies and all this fuzzy stuff that everyone is talking about, and I think it is fuzzy myself, how does that compare with the cost of doing a national grid? We are just tossing money away. I should not say this, but every group gets money, millions, and yet we are sitting there and we need a national grid. If you want to look at the U.S., we can go to the U.S. and pitch them enormous resources of clean energy. "Why blow your mind down in the United States, President Obama? We have it up here. Put some money in up here and we will sell it to you."
Mr. Carson: Maybe that will be the next phase of the Clean Energy Dialogue: You give us money and we will do it for you.
Senator Dickson: Senator Mitchell said we should be leaders. There is opportunity.
Mr. Carson: I hate to be equivocal but I think you have to do both, senator. You have to look at the fuzzy science stuff, and I will go back to Calgary after this and see some of my so-called professor friends, but all this scientific, game-changing technology has to go into reduction of greenhouse gases.
The other part is that someone has to take a really hard look at the transmission capabilities. We go to these meetings, and everyone here goes to them, where people talk about electric cars and how great that will be when we are all driving electric cars. The meeting I was at said you go from zero to 60 in three seconds. That is terrific, but you go home at night and plug it into the outlet in the garage.
First, you plug it into a coal-fired generation electricity plant; that is where you get your energy from. Second, the transmission wires are so old that they need to cool down at night so they can be productive during the day.
You do not want to sound like a Luddite here; it is great to talk about electric cars, et cetera, but so much has to go into the infrastructure in order to make it work. When we talk about the need for this kind of strategy, that is right up there front and centre. We are sort of all over the place.
You are not wrong, senator; a little bit of money here and there, a little bit of this here and there. Not that I am being critical of any government, or even of any of the industry partners that are involved in this, because the fossil fuel companies are involved in a little bit of wind, a little bit of solar and that sort of thing. The problem is getting a concerted effort with priorities so that you say, okay, this is what we are going to do next, and know what you will do next and that it will be beneficial.
The Chair: You have been generous with your time, Mr. Carson. I have three articulate senators who have asked for an extra question. Would you indulge us?
Mr. Carson: Yes.
Senator Mitchell: Senator Seidman and others have asked about pricing and how you do that. You got into discussions of cap and trade, et cetera, but Senator Seidman was getting at what exactly would be a reasonable price.
I love to say to my Conservative friends, why do we not just go to the markets? We all believe in the markets. You go to a market, to Europe — $100-billion markets, lots of liquidity — ergo there is enough there to allow supply and demand to work effectively, not originally, but now. Probably it has been selling, in recent memory, from anywhere from $15 to $30.
Do you have any idea, or whether it is worth us pursuing, what the relationship is between that market price for a tonne of carbon of, say, $30 today, and what it really costs to reduce a tonne? That is an important relationship. In fact, one of the implications of that relationship is that it could actually cost a lot less to reduce a tonne of carbon than it would to stop a consumer from buying something that produces that tonne of carbon.
Mr. Carson: You sure do not want to set your price so it is a licence to pollute. Therefore, it must be high enough that it is meaningful, but low enough that it will not tank the industry you are dealing with so that it becomes the straw that breaks the camel's back and you do not have any energy at all being produced.
I am trying to remember McLaughlin's report at the national round table. He talked about somewhere between $40 and $100 per tonne, I think. I am no expert on that, but it has to be part of any strategy we come up with that we put a price on carbon.
The problem is once you ask what it will be, the consensus falls apart. Everyone thinks you have to do it. The problem is the price. I keep going back to Alberta where they do have a price. Maybe one could argue that is too low; it is more than $1 and it is less than $400 or $500, much less.
It is certainly worth pursuing, obviously not with me, because I do not have the same kind of knowledge in this area as Bob Page or Dave McLaughlin at the round table. I know you have had them here as witnesses, but I think it is worth having them back. It would be worthwhile also talking to the people from the European Union as to how does it work over there and also how did it affect the industries that were involved in it there.
Senator Mitchell: In Alberta, farmers have sold carbon credit sanction under the Alberta government regime for $6 a tonne. I think there is lots of inexpensive carbon to be had out there, if for nothing else than a transition into a more rigorous industrial reduction. The beauty of markets is it allows you to price cheaply, at least at an interim level, and use that as a transitional period.
Mr. Carson: One of the things that we have talked about is, if we are going to move to any sort of regime on that, you would want to do it in some way that you got to test it as you were going along. You would not want to run into the problems that the European Union did with getting it wrong the first time and then having to re-calibrate and try to go back at it again.
Senator Lang: I want to turn our attention to the question of education, human resources and training. You talk about appropriately training human capital. I want to address your organization directly on that.
You have been in existence since 2007. You have been allocated in the neighbourhood of about $15 million. You are working with three well-accredited institutions. What has your experience been in this three-year window in encouraging the younger generation to get involved in the science and the world of academia as far as environmental studies are concerned? Has there been a great increase in people involved?
Mr. Carson: Yes.
Senator Lang: Are other universities following your lead and changing their courses so they encourage people to get into this type of educational pursuit?
Mr. Carson: Going back to the NAFTA meeting I was at yesterday, one of the issues that was brought forward by some people from the United States and Mexico was how do you encourage that? It was brought up in relation to the retirement of various people involved in oil and gas, electricity — the energy field.
In this one, we do have it right. The three universities that we are involved with have focused courses. I know Dr. David Layzell was before you a while ago; he heads up the Institute for Sustainable Energy, Environment and Economy at the University of Calgary. They have focused courses on what will be practical for young people who want to enter the energy business.
The other thing we have to take into consideration is that the energy business is the only business that is driving the Canadian economy. It is growing, so there is opportunity. Last year was the only year in recent memory where every engineering graduate did not have a job long before he or she graduated.
We have two things going for us. You have a very agile structure in the universities to train and educate young people in this area. As well, you have a ready market for them when they graduate.
The other thing is that energy has become such a buzzword across the country that almost every university is trying to play in that area, so there are similar institutes across the country. As I said, I think we have this right, but only because of the confluence to be able to structure courses in a way that makes sense to industry. We either allow people to continue doing research in the university or go into the corporations to work since there is a ready market.
Senator Banks: Mr. Carson, you need to have a hundred fuzzy things before you get one you made out of stainless steel. It would be good for us to know that a lot of that science is not fuzzy anymore. It is being applied every day as we go along.
The way fossil fuel energy extraction is done now bears almost no relationship to the way it was done 20 years ago. We should ask Eric Newell to talk to us about that.
I have three questions. First, does your school operate on the basic assumption that greenhouse gas reduction is a fundamentally important thing to deal with in any national energy policy, plan or strategy?
Second, does the current talk about our sending spent nuclear fuel to the United States to be reprocessed and then stored change the field of play for nuclear energy in Canada?
Third, please comment on the dichotomy between East Coast offshore drilling, which has been a boon economically to Nova Scotia and Newfoundland and Labrador, and the moratorium on offshore drilling on the West Coast.
Mr. Carson: The answer is yes in regard to greenhouse gas reduction. Everyone knows I am not a scientist. Someone explained to me recently that using the atmosphere as a sewer is not a long-term prospect. Even if you question the science, you must realize that what we are doing is not right. We have to take action on that.
With regard to the spent nuclear fuel, I am not clear on the proposal to ship it to the United States. The nuclear industry in Canada has its own problems and challenges regardless of nuclear waste. We have to move forward to deal with AECL, Atomic Energy of Canada Limited, and what Ontario wants to do with regard to nuclear power. Having been a player in the nuclear era for so long, it would be a shame to miss the nuclear renaissance. There is tremendous opportunity for Canada and for nuclear development in Canada. Ontario is trying to refurbish or retire nuclear plants and build new ones to deal with the existing coal-fired plants.
I do not know enough about the moratorium on offshore drilling on the West Coast to make any comment about whether it should be lifted. I can say that the way we have approached offshore drilling off the coasts of Newfoundland and Nova Scotia is a great thing.
The Chair: One phrase has provoked me to ask you a question about this "nuclear renaissance." I have been interested, as we have done this study, to learn the extent to which we are already using nuclear energy in Canada. People at large do not seem to understand that Ontario is approaching 50 per cent of its energy production from nuclear. Nuclear energy generation overall is 15 per cent in Canada. It is well over 90 per cent in France, I believe, both for residential and industrial use.
When you refer to a nuclear renaissance, do you actually think the public is awakening to the advantages outweighing the fears they have had about nuclear waste and the "NIMBY," not in my backyard, sentiment?
Mr. Carson: It is difficult to say. One thing we have to stress as we do our work in this area is the real need for an energy mix. It will take the pressure off oil and gas, obviously. All forms of energy are something that we should pursue.
With regard to nuclear power, many of the issues people had before should be resolved. It goes back to education and being able to do this in a safe way. What we have done in this country has been incredibly safe since we started nuclear energy production many years ago.
I would put the stress on the need for a real energy mix.
The Chair: A clean energy mix.
Mr. Carson: Absolutely, a clean energy mix. Part of that mix has to be nuclear.
The Chair: Our next witness is someone you have met with today, a hungry young person who works for Minister Prentice. He has used the phrase "clean energy superpower" as a goal for Canada to become. My colleagues in the committee whispered to me: But are we not already the clean energy superpower?
Would you comment on that and we can wrap up?
Mr. Carson: We have to define what clean energy superpower is. Canada has a tremendous resource. We are fortunate to be occupying the northern half of the North American continent. I do not know what a superpower is in this area, but in order to function globally in this area — if we are to do that — points to the need for an overarching strategy to direct us. I am not sure we are there yet. If we are to be that superpower, we need this road map to help us get there and to keep us on the road once we are there.
We may be there now. My concern — and I think it is your committee's concern — is that without the right parameters in place and a means to address it — again going back to these crosscutting issues — we can squander this wonderful advantage that we happen to have and that we have spent much time and effort to develop.
I am the last person who needs to encourage you to do anything, but I would encourage you and your committee to keep working on this. I think Minister Prentice would agree that with the right structure in place, that is what we become if we are not there already. It will also allow us to stay there.
The Chair: I can say without hesitation on behalf of all my colleagues around the table how much we appreciate your contribution this evening, Mr. Carson. It is evident from the attentive demeanour of my colleagues and also their questions. We are fascinated.
Personally, I am amazed at the grasp you have developed in the relatively short period of time you have been in this field, which is critical to the future of our country. I congratulate you for what you are doing in that regard. I thank you for your input and your offer to work with us as we go forward in developing and drawing this road map for the decision makers.
At 8:00 a.m. on Thursday morning, we will hear from the Minister of the Environment, Jim Prentice.
(The committee adjourned.)