Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 4 - Evidence - April 29, 2010
OTTAWA, Thursday, April 29, 2010
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:06 a.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: Good morning, colleagues, witnesses and viewers on the CPAC network and the World Wide Web. This is a meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources. We gather to continue our study on the energy sector and the development, hopefully, of a framework for a clean energy policy for Canada.
I would like to welcome Mr. Oliver from Pollution Probe. We have a full complement of our committee this morning, with one exception, an independent senator who will probably join us shortly.
I am Senator Angus from Montreal, Quebec. Senator Mitchell, the deputy chair, is from Alberta. Also present are Mr. Leblanc from the Library of Parliament, who is helpful to us in our research and our work; Senator Lang from the Yukon; Senator Seidman, from Quebec; Senator Peterson from Saskatchewan; Senator Massicotte from Quebec, via Winnipeg; Ms. Gordon, our very able clerk; Senator Neufeld from British Columbia; Senator Frum from Toronto, Ontario; Senator Dickson from Halifax, Nova Scotia; Senator Banks from Alberta; and Senator Brown from Alberta.
We will digress to collectively express our amazement at the Montreal Canadiens. We have a few Montrealers around the table, and I think we are all amazed at what happened last night. It certainly energizes us.
As we all know, Canada is a major producer of energy in a world where energy demand is steadily growing and conventional energy supply is diminishing. Also, governments around the world are confronted with the challenge of how to achieve energy security in a sustainable way while reducing carbon emissions. Carbon emission targets by Canadian governments and the substance of a global agreement on climate change action have the potential to shape all aspects of Canada's future energy system.
In light of these issues, the committee believes that it is high time for a national discussion, which we are engaged in, on Canada's future energy production and consumption practices. We certainly need to change and re-energize the way we develop and produce energy, but also we need to review the way we consume it, all with a view to greater efficiency.
Pollution Probe is not unknown to this committee, and Mr. Oliver is its executive director. He holds a bachelor's degree in mechanical engineering from Carleton University and brings more than 15 years of experience managing industrial projects and developing strategies for energy efficiency and greenhouse gas emission reductions.
At the helm of Pollution Probe, which is one of Canada's oldest and most respected environmental organizations, Mr. Oliver has built strong relationships with government and industry to advance practical solutions to environmental challenges. Recently, he built a collaborative partnership between the Canadian Automobile Association and Pollution Probe to promote eco-mobility, a plan to reduce automobile emissions that views the driver, the vehicle and the road as part of an integrated system.
I am pleased to welcome you, sir. Perhaps you were the representative who was here before from Pollution Probe.
Bob Oliver, Executive Director, Pollution Probe: It might have been my predecessor, Ken Ogilvie.
The Chair: Please proceed.
Mr. Oliver: Good morning. I will begin by thanking the Honourable Senator Angus and the members of the committee for inviting me to present today. My name is Bob Oliver, and I am the executive director of Pollution Probe. My submission today relates to the development of a public education tool authored by Pollution Probe and notionally entitled A Primer on Energy Systems in Canada. I hope to communicate three points to the committee today: why we are producing this primer, how we are structuring the content, and what we recommend for consideration by this committee.
I will take this opportunity as well to congratulate the Senate Energy Committee on making the current state and future of Canada's energy sector a priority topic among its investigations. The timing of this undertaking is critical. How governments respond to the challenges of energy use and climate change could significantly impact Canada's future as a nation and the prosperity of its people.
Energy is pervasive in modern life. It is a fundamental input to just about everything we do. Canadian society is particularly intense in its use of energy, being among the leading per-capita users of energy around the world. Access to energy resources and energy technologies has yielded to Canada tremendous benefits, enabling most Canadians to achieve high standards of living and to participate in growing economies globally and here at home.
However, the manner in which human society produces, transports and uses energy resources is largely unsustainable and is often at odds with economic sensibility. We deplete non-renewable energy resources at an ever- increasing rate. The burning of energy resources increases the concentration of greenhouse gases, GHGs, in the Earth's atmosphere and pollutes the air we breathe. The price of energy varies significantly between the regions of Canada and around the world often due to political interventions ranging from utility price regulation to international cartels. This tends to confuse markets by decoupling consumer prices from producer costs. We do not use energy resources as efficiently as we could, thus limiting the productivity of our economy.
For these reasons and more, several national forums on energy have emerged from the private sector involving industry representatives, non-government organizations and leading energy experts. Such forums include QUEST, Quality Urban Energy Systems of Tomorrow, of which Pollution Probe was a founding member; the Energy Framework Initiative, EFI, for which Pollution Probe authored a foundation paper on A Commitment to Sustainable Energy End- Use; and the Banff Dialogues, in which Pollution Probe has participated. These forums are motivated by a shared recognition among the participants that Canada must develop a coherent and integrated energy management framework. Ideally, this framework would guide decision making according to a shared vision and would serve to coordinate regional and local actions to deliver national progress on climate change. It should also ensure Canada's readiness to successfully innovate and compete in the fast-changing market for energy resources and energy technologies.
The sense of urgency that drives the dialogue in these forums is punctuated by recent policy developments in the U.S. relating to energy and climate change, as well as to international commitments to initiate globally coordinated actions on climate change by major greenhouse-gas-emitting nations, including Canada.
In each of these forums, the need to improve the energy literacy of Canadians was identified as a priority.
Canadians' level of understanding about the energy systems that support their activities and lifestyles often varies among the stakeholders, is incomplete or is misinformed. What do Canadians really know about the system they turn on when they flip on a light switch, jump in their car or turn up the thermostat? The absence of a common reference — an accepted baseline of information — developed for the Canadian public, or a common vocabulary that everyone uses to discuss energy systems in Canada, prevents decision makers in government and industry, as well as engaged citizens, from working together to build effective energy strategies and policies that will help us meet our social, economic and environmental goals. The development of an educational resource — a primer — on energy systems will help to address this barrier by enhancing Canadians' level of energy literacy. We hope that this will foster and enable a more productive dialogue and debate about the future management of Canada's energy resources.
This is why Pollution Probe is hard at work on developing a primer on energy systems in Canada. We seek to make meaningful contributions to public education and policy in Canada as a means to achieving positive, tangible change in the environment. Pollution Probe was founded in 1969 and has played a central role in the development of many hard policies and practical initiatives in Canada, including emissions regulations for smelters, sulphur-in-fuel regulations, the first blue box recycling program, vehicle emissions testing and, most recently, the first ever regulations to directly control GHG emissions from light-duty vehicles across Canada. We are a registered charity in Canada and are proud to have an active and loyal donor base of individual Canadians from coast to coast.
Pollution Probe has a clearly defined approach to writing primers based on a series of successful productions to date. We are committed to using sound science and accurately laying out complex issues in a balanced format. We seek to inform and educate the reader, explaining the nature of the issues and the challenges that must be faced to mitigate threats and realize opportunities. An expert advisory group is convened to provide input throughout the production of our primers to ensure that the content is factually correct and the scope is appropriate, and to identify where content should be clarified or improved.
To date, Pollution Probe's published primer series includes The Smog Primer; The Drinking Water Primer; Mercury in the Environment: A Primer; Emissions Trading Primer; Primer on the Technologies of Renewable Energy; Primer on Climate Change and Human Health; The Source Water Protection Primer; Primer on Bioproducts; Child Health and the Environment — A Primer; Primer on Volatile Organic Compounds (VOCs); A Guide to Climate Change for Small- to Medium-sized Enterprises, which was produced in partnership with the Canadian Chamber Of Commerce; and the Primer on Automobile Fuel Efficiency and Emissions, produced in partnership with the Canadian Automobile Association.
The structure of the primer begins with the end users. What are they doing that requires energy? How does this give rise to the broader patterns of energy use in Canada? Then, step-by-step and chapter-by-chapter, the reader is guided through the system of energy supply that responds to the end users' demands. For example, let us begin with the basic demand for illumination to read a book at night. This convenience — an energy amenity — can be enabled by the supply of energy. This amenity requires the use of a light bulb, a technology that provides an energy service when supplied with an energy commodity — in this case, electricity that a light bulb converts into illumination. The electricity supplied is the product of a process that converts an energy source, such as wind or uranium, into a deliverable commodity.
In this way, the structure of the primer takes on the look of a pyramid with the demand for energy amenities at the top supported by energy services followed by energy commodities and finally energy sources at the base of the pyramid. This systems-based approach was developed to reinforce the principle that really there is no demand for energy per se. Rather, people want comfort and convenience, access to family and friends, access to goods and services and the pursuit of commerce and profit, all of which improve their quality of life and standard of living. These amenities are valued by people because they generate real benefits. In this case, the demand is a derived demand — a function of the energy needed to facilitate the amenity and the efficiency with which the system provides that energy.
Through this lens, the reader can begin to understand how Canada's energy system works. Along some energy pathways, the demand for energy amenities is met efficiently. Along other pathways, however, the demand for amenities can engage rather inefficient processes, resulting in the wasteful use of resources. For example, deposits of raw natural gas — an energy source — can be tapped and processed into high-grade natural gas. This gas can be distributed through pipelines with a relatively small amount of additional energy for pumping and heating the gas and then delivered right to the end user's home. There, it can be burned in a high-efficiency furnace to produce heat, providing the end user with warmth and comfort on a cold night. This represents a relatively efficient use of the gas deposit resource.
An alternative pathway would be to pump the gas to a conventional electric power plant where it would be burned to generate electricity, a process in which only a third of the available energy is converted into electricity and the rest is ejected through the stack as unused heat. The electricity is then transmitted through power lines — where more of the energy is lost — to the end user's home. There, it is finally converted by an electric heater back into the heat that provides comfort to the end user. In this scenario, a gas deposit resource is used to provide a valuable service but in a more wasteful manner. The consequence is that more natural gas is burned to provide the same value to the end user, and more GHG emissions are generated in the process. This represents a less sustainable use of the gas deposit and a less economically productive means of satisfying the need.
The reader is thus oriented to consider the relative merits of the current systems of producing, distributing and using energy in Canada. Establishing a clear line of sight between the end-user actions and energy-system responses is the objective. There is an energy value chain at work that connects their actions to an energy source — making this value chain less resource-intense and more economically productive is an important pathway to sustainability.
Currently, the chapters of the primer are as follows: Chapter 1 describes energy and the benefits and problems with our current patterns of energy use. This chapter also introduces the concepts of the energy system and describes how looking at energy from a systems' perspective is useful.
The reader will note that the energy systems of Canada compose a large share of the Canadian economy. The energy sector directly employs nearly half a million Canadians and contributed about $95 billion, or 6 per cent, to Canada's total GDP in 2008. Beyond the numbers, energy is a fundamental input to every Canadian business, farm and household; and, until recently, energy was available at relatively low cost, supporting continued large growth in Canada's economy and huge improvements in the standard of living of all Canadians.
However, the primer also makes clear that Canada is not an island. Large quantities of nearly every energy source are available here, and there is global demand for these sources. As a stable, free-market-oriented democracy, Canada is considered to be a more reliable supplier of energy sources to export markets — principally the U.S.
Chapter 2 draws a distinction between the amenities we demand and the energy systems that provide for those amenities, as discussed earlier. It showcases the impact that efficiency and conservation can have in minimizing the draw on energy resources and associated environmental impacts, without sacrificing access to amenities or limiting the associated benefits. It also shows how technology is critical to the energy value chain, adding value to the energy sources by upgrading them into commodities, applications and, ultimately, the amenities we demand.
Chapter 3 describes the major energy sources in Canada and how those services are provided on a sector-by-sector level for industrial, transportation, and commercial and residential entities. The requirement for heat, light and motive power in these sectors, and the technologies involved, are discussed, as are the barriers to improvements in efficiency and performance.
Chapter 4 outlines the major energy commodities in use in Canada and explains the technologies that are used to produce those commodities. Energy commodities are used to power the technologies that provide energy services. Energy commodities include processed coal and coke, petroleum products, natural gas liquids, natural gas, biofuels, processed uranium and electricity. The export and import of energy commodities and the transportation and storage of commodities is also examined in this chapter.
Chapter 5 describes Canada's energy sources as the primary supplier to the energy system. This chapter includes descriptions of the estimated reserves of all sources and the technologies used to convert these sources into useful commodities. Energy sources are available as a result of natural processes on Earth and of solar radiation. The naturally occurring kinetic energy of moving water and wind, the potential chemical energy stored in fossil fuels and the nuclear energy stored in uranium are all stores of raw energy that can be converted through various technologies into heating and other energy services, as well as commodities, including petroleum products.
In each chapter, the social, economic and environmental implications of energy production, distribution and use are identified and provide context. Major market drivers are also identified.
Chapter 6 includes information on the policies most impacting energy systems in Canada and the actions individuals can take to effect change.
Pollution Probe is pleased to have the services of an advisory committee composed of distinguished experts on various aspects of Canada's energy systems. Drafts are currently under review and the finished product should be ready for launch this summer.
By attempting to frame the discussion and debate about energy in Canada from a choice between cleaner and dirtier energy options to a dialogue about energy systems, Pollution Probe hopes to promote the development of more durable and sustainable solutions to our energy and climate change problems. For example, QUEST advocates for an integrated energy systems approach to optimizing resource use at the community level. However, this will require a rethink of the role of regulated utilities. It will also require innovative investment strategies and new energy services delivery models that rely on technology and infrastructure to supply users with amenities they value, rather than generate returns on the sale of volumetric supplies of energy commodities.
I recommend that the Senate committee give careful consideration to these demand-side focused approaches in its investigations. There are productivity gains, job creation potential and new technologies at this end of the system. No matter the energy resource used, using it in the most efficient and productive manner will conserve that resource for future generations and for other valuable applications. This is also often the most cost-effective way to minimize environmental impacts.
If timing permits, and with the permission of the chair, Pollution Probe would be pleased to reference the work of the Senate committee in the primer on energy systems in Canada as an example of a federal action under way and as a resource for the reader to further explore and learn more about this important topic.
This concludes my submission. I am pleased to take any questions or to provide clarifications on the information I have presented.
The Chair: Thank you very much, Mr. Oliver. I cannot think of a more topical and relevant submission for the committee at the present time.
I want to, first, thank you for your kind words of congratulations to us. We appreciate that. Second, that senator I mentioned earlier has arrived, Senator Elaine McCoy from Alberta. In our quest for energy literacy amongst ourselves, before we get into the substance of the various subsections of the sector, Senator McCoy helped us by producing her own primer on energy, to provide us familiarity with the lingo and so forth.
This primer concept fits perfectly with phase 1 of our study, which is coming to a conclusion. Our plan is to produce a preliminary report before the Senate rises for the summer break, which will be about the time your primer is coming on stream. I hope you will remember us with perhaps one or more copies.
I am sure I can say on behalf of my colleagues that we would be delighted if you saw fit to reference us, as you suggested. We would be flattered. Hopefully, it would demonstrate how we are working together, as you say, with these other groups in Canada that are all coming together. You are speaking about the demand side, and clearly that is a key focus.
Senator Mitchell: Thank you, Mr. Oliver. I was interested that your organization is focusing on an effort to educate and inform Canadians about energy-related issues. In a sense, that is exactly what we are doing.
I have thought for a long time that I am not so sure we need to find more technologies to reduce carbon emissions; rather we need to find a new technology to convince people that we need to reduce emissions. That is the focus of my question. You are doing this; other organizations are doing this; and we are trying to do this.
As you use the word ``primer,'' I am reminded that Senator McCoy has written a primer as well. It is not quite public yet, but hopefully it will be on our website and elsewhere.
Have you given any thought to the role that the Government of Canada could play in having a dialogue with Canadians about something as important as, for example, climate change, or an understanding of energy, where it goes, why it goes there and how much we have, given, in particular, that there is such a resistance to accepting the science of climate change, which is as clear as any science, in my mind, can be? It is similar to defying gravity. Climate change exists. Could you speak about that?
Mr. Oliver: Communicating or engaging the public in a discussion about climate change and energy and the interrelationship between those two important issues requires a reframing. Most Canadians are not scientists. You can present them with data, demonstrating that climate change is happening and that is an anthropogenic influence exists. However, that does not leave them with many options on how to engage in a system-wide change.
I would suggest that we try to reframe this issue. We need to shift the focus of the discussion away from doing with less and having to reduce emissions, that it will be painful and how we best distribute equal portions of that pain to every part of Canada. That is not a very aspiring proposition.
I think we should couple this with a focus on Canada's potential to improve the productivity of its economy, to leave a sustainable future for our children and to play an influential role in the globe's transition to a low-carbon economy.
We are blessed with significant deposits of natural resources that can be converted, through various technologies, into energy services. That provides us with an opportunity to not only be an exporter and a consumer of raw energy resources but also to demonstrate how this can be done in a more efficient and productive manner. That can develop jobs, skills and know-how that we can export around the world. That is part of a more interesting proposition to the Canadian public.
I would point out that one of the exports for which Canada is known is consulting engineering. We export a tremendous amount of know-how. It is a highly valuable export. Rather than just focusing on presenting Canada in a passive role where it has to meet the energy demands of the rest of the world, which we can do, we can also demonstrate the most efficient, productive ways of using those energy resources. That puts Canadians' focus on the benefits of tackling this issue, but tackling the issue will require much change. People are used to having prices for energy controlled, so they do not get the right signal from a price perspective to conserve. We need to rethink the whole system and figure out how to use our energy systems in Canada, which are unique, to develop a broad range of exports that we can bring to the world. Managing climate change then not only becomes an environmental initiative but also becomes a prosperity potential that we are aspiring to achieve.
I am not sure if I am answering the question of why the science does not resonate, but I would certainly consider much more aspirational and positive ways of engaging the public because some simply will not respond to the provision of data eliciting a need.
Senator Mitchell: Thank you. If you were the one to decide the price of carbon today, what would you do, in a perfect world? Would it be cap and trade or a carbon tax?
Mr. Oliver: Both options have advantages and disadvantages. My personal opinion — and I want to point out that I am an engineer by training, not an economist — is that a carbon tax is the better way to go. That comes right back to the question of public messaging. How do you frame that proposition? Is it an investment in our prosperity and our future? Do we demonstrate global excellence in how we produce, distribute and consume energy, driven by the price signal provided by a carbon tax or not? That is how I would frame that one.
Senator Mitchell: Maybe we need another word such as ``carbon price signal.''
Mr. Oliver: Yes.
Senator Mitchell: Finally, is there any way of assessing, and does it actually occur, the amount of subsidy that goes into the fossil fuel industry? The argument always seems to depend on how high the royalties are. It is money foregone, not money spent if it is lower. However, have you done any work on the comparison of subsidies to the fossil fuel industry versus subsidies to alternative energies?
Mr. Oliver: I am afraid to say that no, I have not. Pollution Probe has not led an analysis of subsidies, both apparent and hidden, to the conventional fossil fuel industry. I do not want to speak to that, but it is very important to pull out what those numbers are. I do not think anyone would be opposed to developing clearer price signals by minimizing or focusing the role of subsidies as required, as much as possible, so that the consumer does receive a clear price signal on energy usage. That perhaps should apply to all forms of energy. If we remove subsidies across the board and see what the true cost of energy is, we might be able to develop a more forward-looking framework that brings out the best elements of our energy systems.
The Chair: I hope those answers will not go unheeded by you as you continue to raise the issue of emissions. He is our emissions man.
Senator Mitchell: I am on the emissions side here.
The Chair: Maybe he can change the name. I think you have made another wonderful point about the paradigm. It will be a new paradigm that will involve the re-engineering of the whole system; so the language needs to change, perhaps, as well, to get the people onside.
The next questioner is Senator Neufeld. I might just say, in regard to carbon tax, Senator Neufeld was the Minister of Natural Resources in British Columbia when it brought in a revenue-neutral carbon tax quietly, under the radar, that seems to be functioning very well indeed. Again, it helps us with our own quest for literacy by having someone in- house here who can explain how it works.
Senator Neufeld: I do not know if it was quietly or under the radar because I recall all the calls I received.
The Chair: They were protesters.
Senator Neufeld: They were not under the radar and not quiet.
Thank you, Mr. Oliver. I want to go through your paper a little. When you talk about energy pricing in Canada, obviously natural gas is priced under the North American market. Do you accept that that is a fair way of pricing natural gas?
Mr. Oliver: Do you mean that the free market sets the price?
Senator Neufeld: The free market sets the price in Canada and the U.S., in North America, on natural gas. That is the way it works today. Are you comfortable with that? You talk a little about political interventions. I want to ask you about that, about utility rates and our regulators.
Mr. Oliver: If we are trying to convey to the consumer the true cost of energy, and provided that currently we do not internalize the external effects of energy production, distribution and consumption including the emissions that are associated with those, that is what you would want from an efficient-economy perspective. You would want clear price signals. With the price being set in a dynamic of a free-market economy, supply and demand forces should set that.
Ideally, we should accurately internalize the externalities, though. The price of climate change would be factored into a unit of energy of every fossil fuel source, and that would probably drive more efficient responses to the system.
Right now, we have some degree of price control by provincial regulators that were set up at a time when we had monopolistic distribution systems, and without competitive choice, the government instituted regulatory regimes to ensure that consumers had access to a reliable supply of energy at a fair price.
As we move forward, if we want to harness the forces of the market to elicit a different pattern of behaviours leading to a different pattern of energy use, we have to consider freeing up those.
If I may say so, one of the things that we do now is to intervene before, for example, the Ontario Energy Board. Gas utilities have already moved significantly in this direction. A large portion of their business is promoting conservation, demand management and energy efficiency, which means they sell less energy, less volumetric supply. There is a cost to that. We intervened before the Ontario Energy Board years in the past to allow them to recover the costs. Now actually only one portion of the bill relates to how much gas they consume. Another portion of the bill relates to the provision of the energy in a more efficient manner.
In the absence of free-market price signals, we actually have to intervene to loosen up the controls that we have already put in place.
Senator Neufeld: What I get from that is that natural gas is priced on the North American free market. I might add that it is not regulated. It is a free market, but if you included the price of carbon, you would feel a little better in that process. Companies are actually encouraging people to use less through efficiency; 98 per cent efficient natural gas furnaces obviously will burn less, but they are promoting and giving rebates on those. Obviously, we need utility regulation where a monopoly exists.
You state that we are a major GHG-emitting nation. Can you tell us what percentage of the total GHGs emitted in the world is from Canada?
Mr. Oliver: I believe it is in the range of 2 to 3 per cent.
Senator Neufeld: Which country is the highest?
Mr. Oliver: At present, I cannot tell you which country is the highest, but the most recently available data that I have seen shows the U.S. and China neck and neck. That is not an auditor's report. I do not know for sure, but they are close.
Senator Neufeld: When you talk about converting electricity from the burning of natural gas, I want to get your feeling on using compressed natural gas for powering vehicles as compared to electricity, using that same dialogue that you used in your paper. Would you be more comfortable with that?
Mr. Oliver: An energy analyst in Canada, named Peter Tertzakian, has written a book called The End of Energy Obesity. In that book, he has a chart that shows the gas going into a conventional electricity plant, being converted into electricity that goes across power lines and through transformers, and finally getting to the end user's home, where it is converted into light and heat in a light bulb.
Basically, he demonstrates — and it is notional — that about 100 units of energy in the form of raw natural gas goes into the power system, and two units of energy in illumination comes out in the light bulb. Therefore, you have a very wasteful system that provides the service.
Applying the energy to where it can be most productive and valuable will often be a more efficient use of that energy. I think there is a role for natural gas in electricity production. I am not saying that we should not be using it for that purpose. However, there are many productive uses of natural gas, and using them in freight transportation is certainly one of them.
We do not have an infrastructure set up to support that type of notion. There has to be some investment, but that is what this is about — using the right energy in the right place in the right way and using it as efficiently as possible. That will require some investment capital.
We are moving from a less resource-intensive system to a more equipment- and technology-intensive system. We are moving along that pathway.
Senator Banks: We are used to taking advice and not giving advice. However, I hope that when you talk about known reserves in the primer, you will be very careful to note that all predictions are wrong. Since your organization was founded, the known reserves of oil have more than doubled, so predictions about that are unknown.
I would like to dig a little further. You said that we need to rethink the role of regulated utilities. Go a little deeper for us there — how and when? Put aside the obvious one, that when there is a monopoly we have to keep a lid on the prices, but other than that.
Mr. Oliver: For regulated utilities, the regulators interpret their mandate in terms of prices and energy services delivery models fairly narrowly. That stands as a barrier to implementing more energy efficient means of energy production, distribution and use in communities.
The QUEST model, the integrated urban energy systems approach, requires a business model with much more flexibility. We have to find a way to restructure the role of the regulator to break down the silos between electricity for lighting, natural gas for heat, oil for transportation and never the three will mix. Mixing is exactly the way we will realize the system-wide efficiency improvements that will deliver a sustainable energy system.
The regulators will have an important role to play. I am not sure exactly how we bridge that gap, but it needs to be addressed.
Senator Banks: The only way to do that is to convince the governments who control the regulators to regulate differently.
Mr. Oliver: I think regulators will seek clarification from the government on their authority.
Senator Lang: I want to compliment you on a very well-balanced presentation and a logical approach to the problems we face. Often, you have people or organizations who take an extreme view, which makes you suspicious of whether that will be the way to go.
My first question concerns the primer. It is one thing to do a primer, which I think is a good idea, but the next step is to get the general public to hear about it and to read it. Could you outline for me and the committee how you propose to do that? After the primer is written, will there be Internet, television and other communications to promote it?
Also, what is your relationship with the departments of education across the country? Would it be possible to see whether the primer can be put into the school curriculum to replace something that is perhaps out of date, so it gets our younger people thinking about energy and where we should be going?
Mr. Oliver: The materials of the educational curricula are controlled by the province. Unless they contracted Pollution Probe to write an educational text for their curriculum, it is very unlikely that we would be able to insert this as part of the formal course. However, we would be thrilled if it was picked up as a complementary piece to the core curricula.
With respect to marketing, our resources are limited, so we often try to partner up with another organization. For example, for the Primer on Automobile Fuel Efficiency and Emissions, we partnered with the Canadian Automobile Association, CAA, because they have a direct communications channel to 5 million motorists in Canada. We look for ways to lever up.
We have a provision in our budget for a web-based version of this primer. We will be printing hard copies, doing the web-based version and would be thrilled to find resources to take our content more broadly.
The primer will not be read by every Canadian. However, it provides a reference document from which we can produce more focused messaging pieces such as brochures and commercials; and hopefully other people will reference it and use it in their own communications. We want to put it out in the market and hope that it gets picked up and broadcast more broadly than we could.
Senator Lang: I would like to hear your observations, recognizing the purview and the constitutional responsibilities of the provinces versus those of the federal government. In a general sense, from your vantage point, what should the federal government do for a national energy framework policy, recognizing the provinces' responsibilities?
Mr. Oliver: It would be helpful if the federal government provided some form of endorsement to a national energy dialogue. However, I am not sure that the federal government is the right organization to lead it. I think we have to take a cross-country approach. We have to respect the authorities of the individual jurisdictions, and we have to work through various stakeholder groups.
A collaboratively led process to develop a shared vision leading to a national framework that guides coherent decision making across the country would be ideal. If the federal government were to impose some form of vision of an energy system in Canada, we could set back the progress that we have made so far. Moral permission to allow an action, not to oppose it but to provide space for it, would be helpful.
Senator Frum: Senator Angus made the point that language is very important in this debate. In your conversation with Senator Mitchell, you talked about the difficulty of why the science does not resonate. I was really struck by the language that you used in the presentation and the implicit value system.
When you speak about energy as an amenity as opposed to a tool for human survival or a life-sustaining force, there is an enormous value judgment there. Perhaps that is one of the reasons why the message does not always resonate with people because they hear the implicit moralizing behind the use of the word ``amenity.''
Mr. Oliver: We are trying to get across the idea of need and demand. People do not demand one litre of gas; rather, they demand the ability to go from point A to point B. They want to connect with goods and services, with their friends and families. That is why they get in the car and drive. Sometimes they simply enjoy a drive. The volume of gas simply enables that activity.
We are trying to educate the public about an energy value chain that includes many players. It starts as a crude oil that is refined into a petroleum product gasoline. It is merged with a technology — the automobile, which provides the service that the public demands. We want to take that entire value chain and make it less resource-intense to provide the service. That is a compelling pathway toward sustainable energy systems. However, who will bear the cost of doing that?
The oil companies do not have a profit motive to sell less of their product. The auto companies can make vehicles more efficient, but often consumers do not respond by buying them. They might buy them in small quantities but not across the board. The owner of the vehicle does not see the value that they generate to society in driving a less resource- intense vehicle or a more fuel-efficient vehicle. Thus, we have fragmentation throughout the chain. We do not want to solve that fragmentation with a bit of education. Instead, we want to lay out a dialogue that would allow us to move toward that energy is part of a services-based industry.
Energy is necessary for life, to be absolutely clear. For example, when I bought my cellphone, I did not buy it from Research in Motion and then find a service provider elsewhere. I went to a Rogers store to purchase my service to communicate with people. For example, if you provide the service and bill the customer according to the value of that service, then the resource input to that service — gasoline in this case — becomes a cost of the goods sold. This results in a profit motive for the provider to minimize the use of that. The consumer pays for the value of the service they receive.
I am not saying that it is the solution, but it is a possible way to reframe the discussion so that people do not think that using less energy means doing with less. However, if they are to do with less, then someone will have to bear the cost of making the system more efficient. The consumer has a role in that. Does that make sense?
Senator Frum: Sure. I am sympathetic to your ideas. I am suggesting that much of the conversation around this topic has been wrapped in a moral, quasi-religious layer that makes it difficult for people. I know that Pollution Probe is a great force behind the recycling program. However, a lot of misinformation circulates on the benefits of recycling. When people discover that, it turns them off the other messages that Pollution Probe might have.
Mr. Oliver: Your point is well taken. Perhaps we could discuss a proper choice of language that would reinforce the message rather than detract from it.
Senator Massicotte: I think all of us understand the importance of doing something with energy to ensure that we have enough without polluting the earth or the sky.
I will be cynical and play devil's advocate. You will produce another book and put it on the shelf. You will tell people how important it is to be more proficient and more caring about the planet. However, we have talked about buying Canadian for the last 40 to 50 years. Governments will come out with a new policy to try to convince the public and the world of something. The statistics provide a favourable template but does not produce serious results. At the grocery store, for example, you can find Mexican tomatoes and Canadian tomatoes. People buy the Mexican tomatoes because they are a little cheaper even if they feel guilty about it initially.
How far can you go with the education and make people feel good about it without a serious price indication?
Mr. Oliver: The education is meant to facilitate the recognition of the need for a price signal. If you do not have technology, infrastructure and pricing lining up to facilitate and drive a change, it will not happen. You can educate people, but that will not change this. We were trying to arrive at a common language in consultation with energy experts across the country that they feel would provide for the right type of dialogue. At the moment, we are not talking about this. The debate around the energy system in Canada is defined by extreme views of marginal issues, in many cases. The meat of the system and the opportunities to achieve a sustainable energy system are not even in the scope of the discussion. As an educational document, the primer was meant to try to put that forward.
As I said, I do not think every Canadian will read this, although I would be thrilled if that happened. Even if they did read it, it would not elicit a tremendous amount of change, but it might facilitate change when we start talking seriously about pricing regimes.
Senator Massicotte: Is it a political movement in a sense? You are trying to influence our voters to influence the government to put in the right policies.
Mr. Oliver: Yes. If I follow your logic correctly, raising awareness around this issue is seen by Pollution Probe as one of its responsibilities.
Senator Brown: I looked at your list of primers. For The Smog Primer, was there a study on scrubbers for coal-fired plants? The United States has the largest amount of coal energy anywhere in the world, and China is about the same. If we are to attack for a real change in emissions, we either have to convert all those plants, which would be expensive, or we have to find a way to deal with the emissions from coal. The same is true in my province of Alberta. I was an adviser to the TransAlta utilities for four years. Our coal was less than 10 cents per tonne. They said that they had bought enough to last for about 98 years. That conversion will be extremely expensive. We need to deal with the emissions on the scrubbers and not try to do away with the coal-fired plants. We can also store the emissions underground.
Mr. Oliver: The primer will address coal and its impacts as well as the technologies to mitigate those impacts. Targeting coal is one way to address emissions. That has been done in certain regions around the world, in particular in Ontario. A whole systems approach includes identifying coal as a resource input to the energy system. Then, if we can produce a system that requires much fewer resources, we will make progress on emissions from coal in addition to the end-of-pipe technologies that could be implemented.
Senator Brown: On which energy replacement are you focused — gas or nuclear?
Mr. Oliver: Pollution Probe does not have an active program promoting a fuel-switching strategy. Certainly, we supported phasing out coal in Ontario. Part of that strategy incorporated combined cycle, high-efficiency natural gas and biomass as one of the fuel-switching alternatives.
The Chair: It is perhaps worth noting that the Minister of the Environment, Jim Prentice, has called for a closing of coal-fired generating plants by 2020, I believe, or sooner.
Senator Massicotte: They are to be closed when they reach the end of their user life.
Senator Seidman: Thank you for coming this morning. My question is about electricity. You said that Pollution Probe seeks to make meaningful contributions to public education through your primers and to public policy. Specifically, what about electricity issues? Currently, the provinces control the pricing of electricity, which varies greatly across the country. Does Pollution Probe have particular recommendations on the costs of electricity? You said that there should be some type of coherent and integrated national energy management framework.
Mr. Oliver: I think the power authorities at the provincial level have made significant progress in promoting demand management. In most cases, the regulators have facilitated the ability of the utilities to recover the costs for the implementation of those programs and to offset the fact that they are producing less of that commodity, namely, electricity. I think it is already moving toward a more efficient system. We have to stay on that route or, alternatively, pursue some type of true cost-pricing system.
Yes, prices vary wildly, and that confuses the pricing signal. It fragments the market for efficiency. I think consumers are uncertain exactly as to how to respond when you have a commodity that is delivered at such a low price. What is the benefit to them of undertaking conservation demand management? That is why we have to broaden the scope of how we bill for those electricity-enabling services at the provincial utility level.
Senator Seidman: We had a witness here who talked about the possibility of an energy market between provinces, for example. Does that have any realistic raison d'être or possibilities from your point of view?
Mr. Oliver: The infrastructure would have to be adapted to facilitate a flow of electricity commodities across the country. It is fairly disconnected at the moment. We are connected with our markets. We produce excess electricity for sale to the U.S. That is not necessarily an improper model. This is why we need a national dialogue on what our goals are, on what technologies will get us there and on what infrastructure investments and business models we need to wrap around those objectives to realize their potential.
Senator Dickson: I was impressed with your paper. I want to come back to a subject matter that Senator Banks and Senator Massicotte raised. Another book sitting on the shelf is important, but, from a pragmatic and practical point of view, where would you rank the new thinking of the regulator? Is that something that would be high on your agenda?
Let us assume it is high on your agenda. In chapter 6, you talk about policies most impacting energy systems in Canada. Will you be making specific recommendations to government? That is, will you be starting right at the top versus from the bottom up?
Mr. Oliver: No, we will not make recommendations. The primers are not a venue for recommendations or influencing policy. The primers are clearly fact-based: Here is the way the system currently works; here is what is being done about it; and here are things you can do. It is not an advocacy tool in itself, but it can provide for informed advocacy, which is the type of advocacy that I like best.
As an advocacy organization, by undertaking this study, we are learning quite a large amount about the energy system that we did not know. This is a way of levelling and resetting our knowledge on the issue so that we can be much more effective. We can be involved productively in the changes that will happen.
We will, however, cite that price is controlled; this is a regulated market. The objective is to provide an account of the way the system works. After that, Pollution Probe may undertake some positions. We are involved in interesting dialogues in which the changing of the energy services delivery model is a chief concern in trying to enable system-wide efficiency improvements.
Senator Dickson: Is any other organization taking a more direct, positive approach than starting at the primer level?
Mr. Oliver: At the primer level?
Senator Dickson: Is any other organization taking a direct approach and making specific recommendations to government on the regulatory side?
The Chair: The Standing Senate Committee on Energy, the Environment and Natural Resources is doing that.
Senator Dickson: I am talking about something that we can source.
Mr. Oliver: I understand what you are saying. EFI and QUEST are two that come to mind. You will be talking to The Pembina Institute. It is a great source of information as well. I would look at EFI and QUEST as two forums for a serious rethink of how we make the system work for us.
The Chair: Thank you, Senator Dickson, and thank you all colleagues for being concise. We are now at the time of the changeover. I want to thank you on behalf of all my colleagues, Mr. Oliver. That was tremendously enlightening for us. Your document is excellent. We will be waiting, with great interest, the publication of your primer. Again, I reiterate our request that you share copies with us. I hope you will be available to come here again at the next stage of our study and discuss this with us. I think we are on the same page, subject to Senator Frum's point of view, which is an excellent thing that we should all keep in mind.
Senator Lang: When will the primer be completed and published?
Mr. Oliver: In the summer.
The Chair: Without further ado, thank you very much.
We are privileged to have with us now and I am pleased to welcome Mr. Tim Weis, Director, Renewable Energy and Efficiency, for The Pembina Institute, where he handles sustainable energy policy research and advocacy, strategic planning, project development and management, and communications and public outreach. I note you have made available to us a deck of just over 40 pages.
I have shared with Mr. Weis that we will be asked to vacate this room around 10:15 a.m., so we have an hour to not only receive his presentation but hopefully to have very penetrating questions from my colleagues.
Welcome to you, Mr. Weis. You have the floor.
Tim Weis, Director, Renewable Energy and Efficiency, The Pembina Institute: Thank you for having me. I realize this is a somewhat long presentation. However, most of it is photos and hopefully some reference material for afterwards. I will try not to dominate with the presentation.
I appreciate being invited here. This is an important and timely topic for Canada and for the world. I will go through my presentation quickly so that we will have time to discuss some of the issues.
I will not talk about specific policy recommendations today. Instead, I want to provide an overview of where the world is headed and where it is at around renewable energy specifically. The technologies and industries have advanced incredibly over the last five years. If you knew something about wind and solar energy five years ago, it is out of date now. Things have changed rapidly. That is the message I want to drive home today.
The Chair: Mr. Weis, The Pembina Institute is a widely known think tank in this field. Could you give us a few sentences, for the record, telling us about the organization?
Mr. Weis: This is the 25th anniversary of the founding of our institute. We were founded in Drayton Valley, Alberta, after the Lodgepole blowout, which is the sour gas blowout just west of Edmonton. It was a citizens group that formed to ensure that industrial accidents such as that did not happen again. We spent a great deal of time keeping an eye on oil and gas development in Alberta in particular.
We have since morphed into an organization that focuses on energy and the environment and where those two issues meet. My role in the institute is to look specifically at renewable energy and energy efficiency opportunities in Canada and how those are a strategic opportunity for the country.
We are a staff of about 55 across the country. We have four offices in Alberta, together with an office in Vancouver, Yellowknife, Toronto and here in Ottawa. We have a spectrum of issue that we deal with. We deal with provincial issues in the provinces where we have offices, and we also deal with federal issues. That is a quick overview.
The Chair: How are you funded?
Mr. Weis: Half of our funds come from fee-for-service. We do contracts directly for companies, government, and municipal and First Nations groups. About half of our money comes from that. We have direct donations and also a foundation that supports our advocacy and outreach work.
The Chair: Is it a not-for-profit group?
Mr. Weis: Yes.
The Chair: Even though you have fee-for-service, overall you are a not-for-profit, and you are registered as a charity, is that correct?
Mr. Weis: Yes, we are registered as a not-for-profit in Alberta. That is a bit about the institute. As I said, 2010 is our 25th anniversary.
As a little about myself, I direct our renewable energy and energy efficiency program. I have lived for the last nine years in Alberta and just recently moved here to Ottawa. I am a professional engineer. I started out doing a PhD at the University of Quebec at Rimouski about eight years ago.
I wanted to get into technical issues. I am a mechanical engineer, and I wanted to get into control issues around wind energy in the Arctic. As I researched that area, I realized that technology was not the problem that was delaying the implementation of these systems; it was policy issues that were getting in the way. Even though I am an engineer, I spend all my time doing policy work and policy research, largely because it is policies that are slowing down the implementation of these technologies, rather than the technology itself.
Slide 5 of the presentation has a list of some of our different publications. Most of our publications can be downloaded free online. We cover issues from oil sands to international climate change and renewable energy issues.
One of the unique things about The Pembina Institute is that we also do work on the ground. We have a consulting arm; as I said, part of our income comes from fee-for-service work. Some of that work has been with communities, particularly First Nations, installing renewable energy equipment, and monitoring resources such as wind and hydro resources.
In the slide, you can see some of the work we have done. That makes us unique in the sense that we have a good understanding of actual issues on the ground, and what some of the pitfalls can be when dealing with real-life projects.
The next slide shows all the different communities with which we have worked across Canada on energy efficiency and renewable energy projects. That provides some background about myself, the institute and where we are coming from.
Today I will talk a little about climate change. I do not want to deal with that in depth, but it is the framework of why we are talking about these issues. Then I want to talk about the global context for renewable power and the opportunities we have in Canada.
It is important to recognize that when we start talking about climate change, there is often discussion about the science not being settled 100 per cent. We need to understand that that is a sore that cuts both directions. There is uncertainty in the science, no doubt; but there is also uncertainty that things could be worse than the current models are predicting.
In fact, the most recent Intergovernmental Panel on Climate Change, IPCC, reports have underestimated the changes that we are already seeing in the atmosphere. You can see on slide 10 what the models were predicting and the actual data; it has been warmer than even the worst-case scenario of some of those models.
Slide 11 highlights our responsibility in Canada. We are one of the top 10 emitters of carbon pollution, not only per capita but also on an absolute basis. We are one of the top 10 countries in the world in terms of emissions. Therefore, we have a role to play not only in demonstrating what can be done but also in reducing our absolute emissions.
I do not want to get into climate change any further than that, but it is an important framework for why we are talking about these issues.
I will specifically talk about one solution, which is renewable energy. All sorts of issues need to be dealt with to address climate change, but I will talk just about electricity today because that is all the time I have.
In 2007, electricity was about 16 per cent of our overall greenhouse gas emissions. You can see on the pie chart on slide 12 that even though we have a relatively low-emitting electricity system with hydro power and nuclear power, still about 16 per cent of our overall national emissions came from that one small slice, which is largely coal and natural gas emissions. Even though our system on aggregate is fairly low emitting, it is still emitting a large amount of emissions.
Slide 13, which is just a graph from Alberta, shows the emissions from coal are close to the current emissions from oil sands in Alberta alone. That will obviously change because the oil sands are growing rapidly. To put it in context, coal is still a large source of emissions.
What options do we have? The next slide shows the exponential growth in renewable energy in terms of installed capacity and how it has come a long way in the last few years. The graph on slide 14 shows that four or five years ago, looking at 2003 to 2005, we were at about a third of where we are today. Additionally, 2005 was a record year for wind energy. Despite that, renewable energy grew quite a bit.
The next slide shows a breakdown of where the investment in renewable energy is going. When we talk about renewables, wind energy becomes the one technology that dominates the discussion. It has become the lowest cost, the technology has advanced the fastest, and it has the largest market share right now. You can see that about 50 per cent of the dollars invested in renewable energy have gone into wind. That is why wind dominates the discussion, but it is certainly not the only technology out there.
Slide 16 shows that in 2008, for electricity generation, more money was invested in renewable power globally than was invested in nuclear, coal and natural gas combined. This is no longer a marginal player. This is a major industry that has huge amounts of investment not only in Europe but also in Asia.
On the next slide, you see that the United States has become the largest market for wind energy in particular, and the largest market for renewable energy in the world. That will change as China ramps up. Currently, we are seeing Europe, North America and Asia getting into the market in a serious way.
The countries that have dominated development have done so by setting pretty aggressive targets. On the next slide, you can see that Germany has targeted 80 per cent of all of their energy to be renewable. They are ramping up in a serious way. The European Union is looking at 20 per cent renewable energy by 2020. Texas set a target of 6,000 megawatts of wind by the year 2015, but they already have 9,000 megawatts of wind power. That is about three times what all of Canada has for wind power installations.
The Chair: On the next page, you show a map of the United States. You have Texas at less than 6,000 megawatts by 2015. Did you just say that they currently have 9,000 megawatts?
Mr. Weis: Yes. Slide 19 shows all the targets that the United States has legislated in terms of what their renewable energy targets are by a specific year. Texas has well exceeded its own targets.
Canada has renewable energy targets as well. Provincially, if you add up all the different provinces' targets over the next five years, we will have installed about 15,000 megawatts' worth of wind power if all the provinces meet their respective targets. That would be about five times the installation of wind power that we currently have in Canada. Up to 5 per cent of our supply could come from wind within the next five years. That is roughly equivalent to where natural gas currently supplies electricity. We are talking about a major chunk of the market.
We do have a good target federally. By the year 2020, 90 per cent of our electricity is to come from non-emitting sources. That was in the Speech from the Throne in 2008. To put it in context, 77 per cent of our electricity comes from non-emitting sources. We would need to clean up about 23 per cent of the electricity system. On the right-hand side of the next slide, you can see what that means for the country in terms of where the projected growth would be and where it needs to be. That is a significant amount of the national grid that needs to be changed over the next 20 years, if we want to meet that federal goal.
To put that into context, to reach that federal target of 90 per cent non-emitting sources by the year 2020 would mean about 40 per cent of our overall existing emitting sources — that is, coal, natural gas and other fuels — would need to be shut down or have carbon capture and storage added to them by the year 2020. If we are looking at just coal, 85 per cent of our existing fleet would have to be either retrofitted or phased out if we want to meet that target. It is doable, but it is an aggressive target.
Ultimately, we probably cannot build large, new hydro or new nuclear in the next 10 years. It takes too long to build those projects. If we want to meet that goal, we have to ramp up renewables tenfold from what they are today.
Ontario is phasing out its coal power. Nova Scotia released a plan last Friday to reduce its coal from 75 per cent to 40 per cent by the year 2020. We are seeing progress in certain provinces. Alberta is building a new coal plant as we speak. Certain areas have seen progress, but other areas still need to be worked on.
You can see that Denmark has done this. It is possible. They went from large, centralized plants — as shown on slide 23 — to smaller, distributed wind energy systems, as well as combined heat and power systems. Slide 24 shows how quickly they were able to ramp up wind power in a 10-year time frame. They went from over 2 per cent of their national supply to over 20 per cent of their national supply from wind. It can be done on a rapid scale if the government is serious about it.
Over that time, Denmark's electricity emissions dropped one third when the wind energy was ramping up. It is possible to ramp up renewables in a serious way as well as to reduce emissions.
I would like to read from the testimony of the electricity system operator, ELTRA, given to the government in 2003, which states:
We said that the electricity system could not function if wind power increased above 500 MW.
Basically, they were saying that wind energy is too unstable, and we do not understand how it will impact the system. It goes on to state:
. . .we are handling almost 5 times as much. And I would like to tell the government that we are ready to handle even more . . . .
In spite of Denmark's major gains, they went through growing pains as well. It was not easy for them to do. The system operator realized difficulties existed. They were hesitant, but, ultimately, they were able to integrate far more renewables than they were originally able to do.
The next slide shows Ontario's plan. These are figures from the Ontario Power Authority, OPA. Within four years from now, they will be phasing out their coal. It will be largely replaced with a mix of natural gas and renewable power. It is possible to phase out coal using these technologies.
The next slide shows how quickly some countries have been able to ramp up. Germany and Spain are typically the two examples we show as being the poster children of renewable energy development and how quickly they can get renewables on line.
On my way in here, I read that Germany had 5,000 megawatts of installed solar power. To show you how quickly these numbers get out of date, they are at 9,000 megawatts of installed solar power today. I put these numbers together eight months ago. Germany installed 3,000 megawatts of solar power last year; Spain is getting about 3 per cent of their national supply from solar power. This can supply national amounts of power.
On the next slide, Iowa is getting about 7 per cent of their electricity from the wind; Spain is up to 11 per cent of their overall national supply from the wind. Interestingly, Spain — and you can see this at the bottom of the slide — on particularly windy days; can get up to 40 per cent of their overall national supply from the wind. These technologies are no longer fringe, marginal technologies. That is the point I am trying to make. You can have major national impacts.
The next slide shows where all the different states are with penetration of wind energy. It has advanced to the point that the head regulator of the United States' Federal Energy Regulatory Commission, FERC, Jon Wellinghoff, has basically said that renewable energy has advanced to a point where we do not need to be considering new nuclear or new coal plants any longer. That statement is not mine, nor is it from a non-governmental organization, NGO. It is from the chief regulator in the United States. That is testament to where these technologies are at the present time.
These technologies are not only supplying huge amounts of electricity, but we are also seeing a huge industry growing. In Germany, over 90,000 are people employed in wind energy. They have about 300,000 people employed in renewable energy. In Germany, the renewable energies industry was about $50 billion in 2008.
Renewable energy in general was a $140-billion industry in 2008, but we have seen exponential growth in this industry. We are expecting wind energy to be a $1-trillion industry by the end of 2020. We are talking about big dollars. This is no longer a small niche market.
In the U.S., 24 states opened new manufacturing plants in 2008. That will have grown significantly in 2009, given the huge stimulus dollars that President Obama put into renewable power.
Slide 33 shows the results of a recent study that looks at where wind energy will go in the European Union. It is interesting that, although they pay a little more for wind energy today, they figure that by the year 2020, wind energy will reduce the spot market price in Europe and will reduce the price to consumers. It is a long-term investment that, within 10 years, will reduce prices in Europe. The study also shows that wind energy can replace, in part, the baseload generation. It can be combined with other renewables and technologies to make serious gains.
In this context, it is important for Canada to look at what the Americans are doing. I quote President Obama:
. . . a green, renewable energy economy isn't some pie-in-the-sky, far-off future, it is now. It is creating jobs, now. . . . And it can create millions of additional jobs and entire new industries if we act now.
That is important in the Canadian context. Slide 34 shows that in the most recent budgets, on a per capita basis, Americans are investing in renewable power at a rate of 18 to 1 over what Canada is investing at the federal level. We have a huge market in the United States, not only on an absolute basis but on a per capita basis. There are huge investments in renewable power, which is creating a huge sucking sound from south of the border as it draws our industries to the United States. That is important from a Canadian perspective, given how big this industry is becoming globally and where we are positioning ourselves competitively internationally and, in particular, in North America.
The Chair: Mr. Weis, I apologize for interrupting you, but for clarification, do you not consider hydroelectric power and nuclear power as renewable energies? You are talking about wind and solar energies only.
Mr. Weis: We are talking about the new, low-impact emerging technologies. I would not consider nuclear a renewable energy.
The Chair: Is that because of the uranium input?
Mr. Weis: There is not an infinite supply of uranium.
The Chair: What about hydroelectric energy?
Mr. Weis: Hydroelectric has its own issues, but, by and large, our view is that it is better than the other options. We have an advantage with our legacy of large hydro systems. I am not focusing on those two technologies today because we cannot build such facilities in a short period of time, and we are talking about what can be done over the next 10 years. It is unlikely that we could get a new hydroelectric system up and running or a new nuclear plant over the next 10 years.
The other real issue is that we do not have many more areas where hydroelectric systems could be built in Canada, although British Columbia is one area. Quebec has a few large systems, but we do not have a glut of large, untapped hydro resources.
The Chair: We are told that at least 25,000 megawatts are out there to be developed, and potentially about another 163,000 megawatts. I do not know if the figures are accurate, but they were given to the committee in evidence.
Mr. Weis: Certainly, there are large, small and run-of-the-river hydro systems that can be added together.
The technologies we are talking about in this presentation include the low-impact, run-of-the-river hydro systems.
The Chair: We heard from the renowned Professor David Keith last week. I believe that you know him. He stressed the particularities of Canada, including the geography and the existing clean systems. He suggested that we have to remember to focus. He more or less said that as interesting as wind and solar are, we had best forget wind because it is so costly and small in relative terms.
As you near your conclusion, I would like you to be aware of what we have been told. No pun intended, but we are blown away by your emphasis on wind energy this morning.
Mr. Weis: Slide 35 speaks to that. Certainly, I do not mean to put wind forth as the only technology for a solution. Rather, my point is that wind dominates the global market in terms of renewable investment at this time. That is why I talked about it.
However, slide 36 shows a study that we did in Alberta on what would happen if Alberta's electricity demand were to double in the next 20 years, which has been forecast. The study was done at the height of the boom in Alberta to look at the technologies that could be used to avoid building new coal plants in Alberta. We also did not build new nuclear facilities. We found that you could double the electricity demand in Alberta in the next 20 years and still meet the supply needs with this mix of technologies.
It is important to point out that wind is not the only technology that we are using because we have a portfolio of technologies. A key message on renewables is that not one technology will solve the problem, although wind is certainly one of them. Many types of technologies need to be included.
Speaking to Dr. Keith's point, I hope that some of my slides illustrate that these technologies can be ramped up to a massive scale for the supply of vast amounts of electricity. I would agree with him that they do not provide the only solution and that this is not the panacea that will solve our problems. However, it merits serious consideration toward making major reductions. Europe has shown that.
Certainly, the costs are higher for wind and solar energy; and solar is significantly higher right now. However, if we do not make investments in those areas, nothing will drive the price down. We saw the price of solar come down 30 per cent last year. If we sit on the sidelines and wait, other countries will develop it, and the price will come down. The question is where we want to play in that market.
That study in Alberta is available on our website. The point I want to make about that slide is the very point that you asked about: a mix of technologies is needed, and wind is not the only technology. It is often worth highlighting because there are so many misunderstandings about what wind can do. I brought a fact sheet on it today that speaks to some of the issues around wind energy.
Although I focused exclusively on renewables today, the strategic opportunities for Canada are efficiency, efficiency, efficiency. Efficiency is our priority in terms of where we should invest. There is no point in putting money into great technologies that will simply be pumped into an inefficient system. We can make major gains in that area in a short period of time.
The Chair: On slide 36 about the greening of Alberta's grid, the top part is efficiency. That is not a new source, of course, but simply using the existing resources more efficiently. Is that right?
Mr. Weis: Yes. Basically, you can bend the supply curve down by that amount.
The Chair: That is quite a big chunk.
Mr. Weis: In Texas, it is mandated such that you have to come up with 10 per cent of the supply through efficiency before you are allowed to build a new plant.
Coming up with that amount of efficiency is not impossible. The study showed that we could easily make about 50 per cent gains in efficiency. It is a question of being economical, where we choose to invest our dollars and what rates of return can be had. By and large, we could reduce energy consumption in a huge way.
Slide 37 addresses other technologies and ideas that exist, which I have not focused on today. Power storage will become a big issue, especially if we are talking about integrating huge amounts of renewable power. I think tidal is a particularly strategic option in Canada because we have some very good tidal resources. The Bay of Fundy is the best resource in the world.
Deep geothermal is a technology that does not get enough discussion. Basically, that is drilling deep into the Earth's crust — anywhere between 3 to 10 kilometres down — finding hot areas of rocks and injecting water to force steam to come up in areas that are not natural hot springs. That is a technology that has not really been developed yet; but given our expertise in Canada at drilling, I think that is a technology that we could be investing in pretty heavily.
However, we do not even have a map of Canada right now. The federal government could be doing that right away, mapping out the resources we are sitting on in the country.
The Chair: Do you mean in terms of the geological structures?
Mr. Weis: Yes, we do not know what we are sitting on. We do not know where the hot spots are in the country, even as a starting point to know where geothermal might make sense.
The Chair: We have been told that the key is to have the right geological makeup. I think it is news to us that we do not have any maps — especially in Canada, this great mining nation.
Mr. Weis: There are two types of geothermal, and they often get confused with each other. The geothermal that Iceland uses, for example, or you see in California or Italy, is where you have a natural hot spring or a natural geyser. You have natural hot steam under the ground, which you can then harvest or turn into electricity.
I am talking here about deep geothermal. It is basically forcing those things to exist in places where they do not exist already.
Senator Lang: Pump the water down, heat it and bring it back up.
Mr. Weis: You drill really deep, yes. That is a technology that has not been developed.
Probably for the technology you are talking about, we do not have a great resource in most of the country, but we do have opportunities. They are currently looking at building one in the Northwest Territories, in terms of the more conventional geothermal, and British Columbia has opportunities as well.
Offshore wind is obviously a big opportunity. The final point I want to make, which often gets overlooked and which is a particular interest of mine, is about remote communities. We have approximately 200 remote communities in Canada that run largely on diesel fuel. They are subject to huge price fluctuations.
Canada was really an early adopter of technology for remote communities, for remote wind-diesel integration, but we have deployed hardly any of it in Canada. Most of the technology is being exported to Alaska now. Just before she left office, Sarah Palin invested $250 million in renewable energy, largely in wind-diesel systems for remote communities. We are exporting our technology to Alaska right now to the point that they have reverse-engineered much of our technology, and we are seeing American companies taking over market share that could have been Canadian.
We still have many remote communities relying on diesel fuel. I would love to see those communities powered by Canadian technology instead of buying it back from the Americans. That is a role the Government of Canada could play. It is a smaller role than these other technologies. However, it is one that is forgotten frequently, and I wanted to highlight it here.
To sum up, at a really high level, what the federal government could or should be doing is making renewable energy a priority. This is sort of a motherhood statement, but that goes a long way.
Right now, we are not treating this as the size of the market that it is; we are not treating the technology in terms of the opportunity that it presents for us. If we were to make it a priority, we would see that all sorts of decisions and policies would flow from that. It is a pretty general statement, but I think it is not even on the radar.
Looking at a national strategy for renewable energy will be important because some of the fluctuations with renewables are different than current systems — so better integrating electricity systems. A carbon price probably gets repeated over and over, so I will not go into it, but that is obviously something the federal government could be doing. Incentives for deployment and accessing capital are other areas that the federal government could help with, along with emerging technology support.
Those are all fairly broad statements. I know one of the issues with the federal government is that many electricity issues are provincial. Therefore, the question often comes up concerning what role the federal government has. At a general level, those are different areas where the federal government could be playing a role.
I realize I am a little over my time; however, the last slide I want to show concerns a very interesting project that I like to talk about. You have two research stations: On the left-hand side, is the McMurdo Station, which runs at 60 hertz; and on the right-hand side is a New Zealand research station, Scott Base. They are connecting these two systems, so you have two different frequency systems that are being connected to one another. They are 3 kilometres apart, and they are connecting them with wind turbines; they will displace 60 per cent of the diesel fuel using those wind turbines. From a technical point of view, you will not get a more complicated project than this. This is incredibly difficult to pull off. This project is in Antarctica, with two different frequencies and high levels of wind; they are building it today.
Hopefully that brings home the point with which I started. The technology has advanced to high levels, and we can be doing this and are doing this right now. It is really a question of what Wayne Gretzky said when he was asked why he was such a good hockey player. He said that he skates toward where the puck is going, not to where the puck has been. Therefore, the question is where is the puck going and where does Canada want to position itself in that overall market.
I appreciate your time and am happy to take your questions.
The Chair: Thank you, Mr. Weis; that is a very interesting perspective. We will begin with Senator Mitchell, the deputy chair.
Senator Mitchell: It was a very interesting presentation.
The Chair: It is right up your street.
Senator Mitchell: Yes. I think there is tremendous potential, and you have underlined it more than I have heard before.
I was interested to learn that Sarah Palin, the Republican's Republican, intervened in the economy through government to put $250 million into renewables. That is fantastic. That will be in the report, I hope. I will fight for that.
The Chair: Keep going to the National Tea Party Convention.
Senator Neufeld: Did you go to listen to her?
Senator Mitchell: No, I did not; but I got what I want, I will tell you right now.
Clearly, wind has evolved because it has been subsidized or government has invested in it. At what point does it become economic? That is always the rub that we hear here — that it is not economic, that it cannot compete with fossil fuels.
Further to that, are there subsidies to fossil fuels that would be commensurate, that are in addition to any type of royalty regime advantage that the oil sands, for example, might get?
Mr. Weis: One of the realities is that energy has been subsidized, whatever form it is. Whether it is nuclear, oil, oil sands or wind, massive subsidies have happened in all the energy systems, and for good reason. The job of the government is to invest in public goods.
The oil sands, for example, have had huge amounts of dollars go into it to make it profitable. It is only in the past few years that the oil sands have been profitable.
I do not have all those subsidy numbers. We did a study in 2005 that looked at some of those fossil fuel subsidy numbers, but it is a little out of date now.
In terms of when these technologies will be competitive, in some parts of the world, they are competitive already. One of the reasons Texas has done what it has done is because wind energy has become, on the margin, more economic than building some of the other technologies.
One of the reasons it is difficult for renewable technologies to compete — and I keep going back to wind, but it is certainly not the only technology — is because our existing infrastructure was set up to service our existing systems. Therefore, all the transmission lines go to nuclear, large hydro or coal power plants. That was done either through public support or through ratepayer investments, but largely through public support in the 1950s, 1960s and 1970s.
As a result, you have technologies that are trying to compete with a system that is set up for the other types of technologies. That adds costs and difficulties to these technologies. In some ways, that is why we want to support these types of technologies so that they have a level playing field in terms of access to the overall grid, or even access to the market.
Senator Mitchell: You mentioned carbon price. Everyone is saying that we have to price carbon. If you had to choose, would you do cap and trade or carbon tax?
Mr. Weis: We are agnostic on the mechanism, but the important aspect is the sooner the better. Not knowing where we are going is a disservice to everyone. Whether that is the oil and gas industry or the renewable industry, the whole idea of uncertainty hurts everyone. The sooner we can get something in the ground and start signalling where we are going, the better.
Senator Neufeld: In the interests of time — and, the chair always chastises me for this — I will ask you to get back to us with some information. He already asked a question about wind, which this slide tends to lean toward.
Could you give us a slide that shows us exactly where each of those countries on slide 11 are in total percentage of the world's GHGs? On slide 17, I understand why wind is great. I am not sure about either Spain or Portugal, but tell us about France. Tell us what the average residential prices are for electricity in each of those countries.
Senator Banks: It is 38 cents.
Senator Neufeld: I think, in slide 35, you say that Canada is falling even further behind the U.S. in sustainable energy investment per capita. We should be bragging about Canada and saying that it is 75 per cent clean. When you look at the U.S., over 60 per cent of their electricity comes from coal. Why do we not show a map of Canada and show what each province has done? In British Columbia, we are 90 per cent clean.
The Chair: It is 93 per cent.
Senator Neufeld: We are 93 per cent clean, but we want to maintain 90 per cent. Those types of things would help us a little. Dr. Keith told us to forget solar in Canada. He was very clear that solar was not the answer, other than for heating hot water in homes or something similar. People want to use solar energy for that, but it is not practical for large commercial applications.
Does your organization approve of run-of-the-river, large hydro and tidal? Is The Pembina Institute out there saying that it supports these types of projects? Let it be known that I come from British Columbia.
The Chair: Yes, and he is saying it right here on television.
Mr. Weis: I will address your first question about investment and why I want to highlight the investments in the United States.
This is more of an economic argument. At the end of the day, we are talking about a huge market here for renewable technologies. Yes, British Columbia has a fairly clean electricity system now. One of the major areas for British Columbia to make gains will be through electric vehicles and through moving heating systems on to ground-source heat pumps and air-source heat pumps.
Senator Neufeld: We are doing that.
Mr. Weis: Yes, but in a bigger way, which will need a more serious amount of electricity. At the end of the day, we will need new sources.
Senator Neufeld: You seem to approve of it.
Mr. Weis: We do not disapprove of it; we do not approve of it, either. At the end of the day, it is a local issue. Any of these technologies have local issues. I think you cannot say, carte blanche, that I support wind anywhere because I do not. I cannot say carte blanche that I support any of these technologies anywhere because local constraints and issues always exist.
We tend not to get into individual projects or site-specific projects. That tends to be issues for the people who live there. It becomes a decision for the First Nations and for the communities in that area.
Senator Neufeld: Would you provide us with some of those slides?
Mr. Weis: I can see what I can do, yes.
Senator Neufeld: That would be great. Thank you.
Senator Massicotte: Thank you for being with us today.
Obviously, it is a serious challenge for the government to meet its target of 90 per cent from 75 per cent. You say that wind is part of the solution. That indirectly tells us that the government's ambition is aggressive and that it should be complimented. You are saying ``if we can get to the 90 per cent.'' However, if the government is serious about it, that is quite a challenge. Is that accurate?
Mr. Weis: Yes. It is definitely in the right direction, and it is definitely a positive target. Presently, we do not have many policies in place to make it happen. However, if we are serious about it, that is definitely a commendable target. It would put Canada on the trajectory of where we need to go.
Senator Massicotte: You talk a great deal about wind. In Texas, you said that it seems to be totally market-oriented. In Ontario, in Canada, we are predominantly getting 10 cents to 12 cents in feed-in tariffs, and that is the way we subsidize it. Is it significantly less than that in other places where it is actually competitive against electricity or coal-fired plants? What is the lowest we are getting it at in pure market without subsidy of wind?
Mr. Weis: Alberta is probably where it is being built out of pure market price. In any of these developments, you are looking at a 20- or 30-year project. In some ways, you are speculating a little on where prices will be. It may not be economic today, but, hopefully, it will be in a few years.
Senator Massicotte: What is the lowest rate in the world?
Mr. Weis: Alberta is probably one of the best examples.
Senator Massicotte: What is the rate?
Mr. Weis: It is market-driven, so it fluctuates all the time. It is anywhere between 8 cents to 9 cents per kilowatt hour.
Senator Massicotte: Therefore, Ontario is subsidizing too generously at their 11 cents.
Mr. Weis: It is a totally different market. To be fair, the Alberta number also would have a top-up of a penny or so from the federal program, which is currently out of money. I do not know the numbers in Alberta, but that is the range, namely, 8 cents to 10 cents per kilowatt hour — it is probably closer to 9 cents or 10 cents.
Wind is incredibly finicky in terms of wind resource. Alberta has an absolutely fantastic wind regime in the south of the province. That is why it has been economic at those prices. Ontario does not have the same wind regime as Alberta does.
Senator Massicotte: You talk about employment quite a bit. From the wind sense, most of the equipment was imported, for example, from General Electric, and so on. After construction, not much employment remained. Is that wrong? Does wind provide a large amount of continuing employment?
Mr. Weis: Yes, a fair amount still exists. I do not know the numbers offhand, but Pincher Creek, Alberta, employs a number of permanent maintenance people. On their website, the Canadian Wind Energy Association, CanWEA, has a fact sheet on how many people are employed in Pincher Creek.
Any energy system, whether it is nuclear, hydro, or whatever, has many more jobs in the creation of the system than in the operation and maintenance of it. That is just the way it is.
Senator Massicotte: I understood that France put a moratorium on new wind turbine construction. Is that accurate? If so, why?
Mr. Weis: I do not know if that is the case. As far as I know, that is not true.
Senator Lang: I would like to pursue the cost of producing power with wind. In your brochure, you state that onshore wind power typically costs 8 cents to 12 cents per kilowatt hour, depending largely on the site. Does that projection of cost include the backup that is required when you are not producing power because there is no wind, or is that in addition to the backup that is required to continue the flow when it is interrupted?
Mr. Weis: Any system needs backup. Last year, I went through the numbers for the Ontario Independent Electricity System Operator, IESO. Half of the nuclear plant fleet was down for 45 days. About 25 per cent of the overall supply in Ontario was down because nuclear plants were shut down for about 45 days. Needing backup is nothing new in the electricity system. That is just the fact of the matter; that is how it works. That market is basically the price with which the wind can sell on the grid. Ultimately, the system will have backup systems inherent to it.
Senator Lang: That is additional?
Mr. Weis: Yes, but it is the same for any system that you would put on the grid. You need some backup.
Senator Lang: I would like to go to a more general statement that was not covered in your presentation, but I am sure you were involved in one manner or another; namely, the various environmental assessment processes throughout the country. You stated earlier that it is difficult in Canada to have a nuclear plant built within 10 years. In places such as China, where the systems are different, you might have one built in four years after the decision is made, not that it is necessarily right.
Governments are struggling with the long, evolved processes that have been put in place. I think that perhaps you were not born when the Mackenzie pipeline project was started; and it has not come to a conclusion yet.
I ask you or your organization whether you support the provincial and federal governments' direction in their efforts to streamline the systems between them so that these assessment programs are set up with a timeline for decisions to be made and information to be considered on a timely basis.
Mr. Weis: Technically, that is not my area, so I am a bit nervous about venturing forth in my response. Definitely, gains are to be made, but there are dangers of unintended consequences of some potential changes. The environmental assessment system was set up for a reason. I do not want to say too much more than that.
The Green Budget Coalition, of which The Pembina Institute is a member, is comprised of about 20 of the larger environmental groups in Canada. Some of the other groups within that coalition look more closely into the environmental assessment issues. That might be a better place to look for answers. I can refer you to what some of those groups are saying about the current state of affairs with environmental assessments.
Senator Lang: I agree that in remote communities, we should pursue actively the concept of wind, if it is viable, depending on where the community is in conjunction with the diesel generation. If we do not do something, it will become so costly to run communities in the Arctic and across the North that we simply will not be able to afford it. The government should look into that.
Senator Frum: That was an interesting presentation. I appreciated all the information you provided about the value of this energy. As well, I give you credit for including a page about some of the problems with it, such as health and noise considerations and the environmental impact of the wind turbines.
I am from Ontario. You say that Ontario's current setbacks are more stringent than those in eight European countries. Are you implying that Ontario's setbacks are too severe or too strict? In terms of making decisions about where to locate these projects in Ontario, what aspects are considered?
Mr. Weis: I am not a doctor, so it is difficult for me to say exactly what the setbacks should be. I do not think we are suggesting that Ontario's setbacks are too stringent. They happen to be more aggressive than they are in some European countries. Ontario tried to strike a bit of a balance between helping development to occur and setting guidelines on where that development should occur.
I cannot remember the second half of your question.
Senator Frum: How much flexibility is there in choosing locations, in particular in Ontario where you say that we have a poor wind regime. I am not sure what that means. How much choice is there for location?
Mr. Weis: I did not mean to say that Ontario has a poor wind regime, but it certainly is not as good as the one in Southern Alberta. Wind is finicky. It has to do with the kinetic equation that says that the amount of energy in the wind is related cubically to the speed of the wind. That means if you double the wind speed, you get eight times as much power. Conversely, that knife cuts in the opposite direction such that you can have significantly less wind energy if you have slightly less amounts of wind. A change of 10 per cent in either direction is a change of 30 per cent in power, which is a change of 30 per cent in economics, which can destroy a project one way or the other.
Therefore, choice for locating wind turbines is a fairly finicky business. You want to choose the windiest areas that have easy access to the grid. That is certainly one of the constraints in Ontario. Northern Ontario and around Hudson's Bay have great wind regimes but no access to the grid. Some wind turbines are being placed where they hope to find that nexus with enough wind and access to the grid. The positioning of the turbines is somewhat flexible. However, those are the two aspects of development.
You asked about constraints. Certain areas you do not want to develop, and consideration must be given to cumulative impacts. I do not mean to suggest, carte blanche, that wind energy is impact-free or should be developed everywhere because you will want to stay away from protected areas and parks. As part of the environmental assessment process, you ensure that some of those issues are avoided.
Senator Frum: It requires a great deal of community cooperation. Not everyone considers a wind park an attractive feature in their neighbourhood.
Mr. Weis: Yes, and not everyone considers a large highway or transmission lines attractive. It is what it is.
Senator Frum: Fair enough.
The Chair: Not everyone considers a nuclear plant attractive either.
Senator Peterson: Thank you for your presentation. What did you mean by power storage?
Mr. Weis: I will use solar power as an example. Basically, it means being able to store the power from the collection during the sunny hours until it is used at night. The obvious technology for that storage is batteries, but, on a large scale, that is probably not the technology you want to use.
To the government's credit, the Clean Energy Fund invested in a couple of pilot storage projects last year in Canada. One of the options is compressed air, whereby you use an old natural gas well or an old empty salt cavern. When it is very sunny or windy and excess power is produced, you can pump air into a cavern and pressurize it. When you need that power, you allow that pressurized air to come up and run it through a turbine and get power out. That system can be used for bulk supply.
There are other options for hydro storage. Commonly used in Europe is pumped hydro. This is an option in Canada where we have large hydro systems. When you have excess wind, sun or other sources, you can pump the water back up the hill into the reservoirs. You can even use the same pen stocks, in that the water comes down and you can pump it back up. We have a primer on our web page that shows about eight different technologies. Currently, most of them are in pre-commercial development.
Senator Peterson: Could you see nuclear power as an important part of the solution to the greenhouse gas reduction challenge?
Mr. Weis: We are not anti-nuclear, per se. We have concerns with nuclear and its long-term storage. In the short term, one of the issues is how quickly you can build these technologies and get them onto the grid. The two concerns about nuclear, purely from a market point of view are, first is that nuclear has the opposite problem that renewables have in that you cannot turn nuclear on or off. In the same way that you cannot control the wind, you cannot control nuclear either. It runs full steam, 24 hours a day, 7 days a week. That is an equal but converse problem to wind. Ontario is having that problem with too much baseload power. At times, they have to sell the power at negative prices to the United States because they have too much of it.
That is a bit of an issue when you are trying to integrate renewables with nuclear because the two do not play well together. Renewables have their own fluctuation concerns, and nuclear wants to run full steam all the time. The two of them do not get along well. Having more grid flexibility and power storage is a good way to strike a happy balance between the two technologies.
The second problems with nuclear is that it is very expensive. The federal government has poured billions of dollars into nuclear subsidies. In the last year, I believe that the government put $1 billion into nuclear cost overruns. The most recent quote for new nuclear build in Ontario was rejected because it was incredibly expensive. In our view, renewables can be employed faster at a generally lower cost than nuclear can be employed.
Senator Peterson: Even though it runs 24 hours a day, 7 days a week, it is emission-free. France has a high percentage of nuclear power.
Mr. Weis: I am trying to say that we are not necessarily against it, but it has issues.
Senator Peterson: Does your institute support carbon capture and storage technology?
Mr. Weis: Our position on carbon capture is similar to our position on nuclear in that it is an expensive technology at this stage in the game. Probably, renewables tend to be a cheaper bang for the buck. At the end of the day in Canada or around the world, it will be difficult to meet science-based targets without some type of carbon capture and storage. We support its development. The question is who should pay for it. Should the companies polluting pay for it, or should the taxpayers pay? It will be a step forward when we get carbon capture and storage working.
Senator Massicotte: You discourage nuclear and carbon capture on the basis of costs. You mention renewables all the time as the solution. Can we get there? You earlier comment was about the challenge in getting renewables to meet the 90 per cent test. If we were to drop nuclear, hydro, and carbon capture and storage, could we achieve that target?
Mr. Weis: We could meet that target with renewables.
Senator Massicotte: Is that without nuclear or hydro?
Mr. Weis: We will not meet those targets with nuclear or hydro because neither will be built by 2020.
Senator Massicotte: According to your chart, despite a significant ramp-up, it is still a small portion of our total energy supply.
Mr. Weis: It takes time. In Germany, 1 per cent of its power comes from solar, but they doubled in three years. After three years, they will be at 2 per cent and in another three years, they will be at 4 per cent.
Senator Massicotte: That is a long way from 100 per cent.
Senator Brown: My question was pretty well answered by Senator Neufeld when he asked about the percentages on slide 11. I ask you to define the word ``absolute.'' You said that on a per capita basis, we are close to the United States in energy. However, at the bottom of the slide, you use the word ``absolute.'' It sounds as though we have bigger emissions than any other country in the world, except the U.S. I think we are at 2 per cent. Some people are saying that it is close to 3 per cent.
Mr. Weis: To be fair, there are two separate points. The graph shows per capita emissions. On a per capita basis, we are among the top 10 countries in the world. If you look at pure emissions and take all the countries in the world and their overall carbon dioxide, Canada is still among the top 10.
Senator Brown: You are saying that the 2 percent or 3 per cent in emissions that we have been told about is not even close to being true?
Mr. Weis: That is true. If you take 300 countries in the world, the top 2 per cent puts us in the top 10 of those countries.
Senator Brown: Are we above China and Germany?
Mr. Weis: I do not have the list with me, but Canada is eighth or ninth.
Senator Brown: Canada is at the bottom of your chart.
Mr. Weis: This chart shows per capita emissions and says both absolute and per capita.
Senator Banks: I want to give you a little comfort as you go away after answering the questions you have been asked. As the chair and Senator Neufeld pointed out, everyone else who appeared before the committee has patted wind power on the head and said that it is not significant. You are the first person to say that it is real and significant and could become more significant. You should know that.
For the purpose of clarification because this meeting is in public, you said that subsidization of energy is part of the public good. With respect to the object, which is the efficiency and sustainability of energy, that is the opposite of the truth, is it not? Is that not the exact opposite of saying that price point and internalization of the true costs of energy are the best ways to ensure that we are making sustainable use of it? Is subsidization the opposite of that?
Mr. Weis: In the absence of price point, you want to see subsidies come into play, ultimately. Currently, we are not pricing emissions or pollution. In that case, the only mechanisms in the quiver are regulations and public subsidies.
Senator Banks: The Pembina Institute is in favour, in some cases, of public subsidy of energy production, is that correct?
Mr. Weis: Yes.
Senator Banks: Thank you.
The Chair: Mr. Weis, you said that we need to recognize that policies are slowing down the development and implementation of new technologies, not the reverse. We are doing this study because the private sector in the oil patch, for example, does not want to be criticized for not developing and spending money on new technologies. They need to know details of the policies and the supporting running rules. Then, they will be ready to spend the money on such development. Have I understood you correctly to say that the technologies exist but inhibiting factors also exist because of various government policies and regulations? Do you have examples?
Mr. Weis: The lack of carbon prices is obviously high on the list and the lack of price on pollution. There are also the nitty-gritty issues that we do not have time to get into. The system is currently set up to enable existing technologies, which becomes an unlevel playing field. Without policies that enable or encourage other technologies to merge into the system, we will continue to deal with that unlevel playing field.
I will use my last moment to sum up and address the chair's words that I am the only witness to discourage those aspects. I reiterate that I am not saying that wind energy is the solution or the silver bullet.
Senator Banks: You are saying that it is a practical part of the solution.
Mr. Weis: Yes. Renewables form a key part of that portfolio. That is my key point. They are real, and they are a huge industry globally. Not one single silver bullet will ever be the solution. We need silver buckshot, and this is a realistic opportunity for us.
The Chair: I thank you, Mr. Weis. Your perspective is interesting and engaging. I hope that we might come to The Pembina Institute for further information as we go forward.
(The committee adjourned.)