Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources
Issue 22 - Evidence - March 24, 2011
OTTAWA, Thursday, March 24, 2011
The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:02 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.
The Chair: Good morning, ladies, gentlemen, our viewers on CPAC and on our worldwide webcast, and everybody in the room. Welcome to this official meeting of the Standing Senate Committee on Energy, the Environment and Natural Resources.
This morning, we welcome Mr. John Bennett and Mr. Ralph Torrie, both here on behalf of Sierra Club Canada. I would like to start by giving you as warm a welcome as I can on this cold morning, and I want to apologize for your having to sit here on Tuesday evening while the elected branch of politicians on the Hill were doing things in such a way that we were not legally able to sit. We are delighted you were able to prolong your visit to the nation's capital and be with us at this early hour this morning.
We are continuing our study on the energy sector generally. In that regard, colleagues and viewers, I would like to just say how pleased I was to note that another international report has come out from Shell Canada saying that Canada needs a national energy strategy or policy. They have used language that is so similar to what we have been using here and what is in our report that I wondered whether they were actually sitting as members of our committee. It is a beautiful thing that this national conversation on the way forward and the need to have a structured and strategic framework for energy policy requires a conversation amongst all Canadians, young and old, east, west and on all our three coasts. I really feel good about this.
Another thing is that I noticed and was advised yesterday that a Winnipeg group, the International Institute for Sustainable Development, IISD, I believe it is, has brought together close to 20 groups. It is now conducting studies similar to our own. They are gathering during the next month in Winnipeg to have discussions about how to bring all these different groupings together and to develop a common thing at the end of the day that would take into account the various different interest groups. This is a good thing.
This morning we are very tight for time because of the exigencies of Parliament, this Parliament nearing an end, and so forth. We have the group from the other night. My predecessor will talk to you in a moment about that, but we also have a group of witnesses originally scheduled for eight o'clock this morning from the coal industry. We will hear them after our friends from the Sierra Club.
Gentlemen, I wanted to inform you about the people you are before. I know you have been following our deliberations. I am Senator David Angus, a senator from Quebec, and I chair the committee. To my right is Senator Grant Mitchell of Alberta, the deputy chair. Next to him is Marc LeBlanc is from the Library of Parliament, who provides us with valuable research and keeps us on the straight and narrow. Beside him is Senator Richard Neufeld, former Minister of Energy and Resources from British Columbia; and Senator Daniel Lang from the Yukon Territory, a former minister, legislator and man of great power and influence in that very special territory. We also have our only elected senator, Senator Burt Brown from Alberta.
To my left is our able clerk Lynn Gordon. You gentlemen know her already. To her left is Senator Tommy Banks, my predecessor, who is betting large money and many oil wells on his property that there will be no election. Senator Banks, you never know, and it is great to have you with us this morning. To his left from Montreal, Quebec, a place that will be very active in the election, Senator Judith Seidman, the newest member of our committee.
I am also proud to introduce to you this morning Senator Jacques Demers, who is not a regular member of this committee but who is filling in for Senator Linda Frum. His national notoriety far exceeds any of ours. He is a man who understands what non-partisan activity and teamwork is about and how you work effectively in adversity. He is a wonderful senator, a great friend and a colleague. Welcome, Senator Demers. To his left, from Saskatchewan, is Senator Robert Peterson, a regular member of our committee and a valued one at that.
Without further ado, I would like to mention that we have visited various nuclear plants. We visited Chalk River to try to get a sense of what the nuclear industry is about. We visited Darlington and went to some of the chemical installations, as well as Bruce Power. We got a very rudimentary layperson's understanding of at least what we have in Canada in nuclear generation and power. We have not formed any firm views.
Since our last meeting, there is been this very horrific tsunami, earthquake and nuclear breakdown in Japan. Therefore, I am delighted that you folks from the Sierra Club would agree to come this morning and tell us another dimension of the nuclear story. We thank you for having provided us with materials in advance. Again, we thank you for your indulgence for being here for two days.
Colleagues, these gentlemen will outline for us a number of the concerns they and many people have, which we should have, about using nuclear sources of energy.
Mr. Bennett is the Executive Director of the Sierra Club. He is a well known and outspoken activist, often quoted in the media. He is in daily contact with environmentalists in Canada and around the world. He has had a long career, which includes stops at Greenpeace, Climate Action Network and Climateforchange.ca. He has been campaigning on energy and environmental issues right back to the early 1970s, when he co-founded the first Greenpeace office east of the Rockies and launched Greenpeace's first nuclear power campaign.
Mr. Bennett created a media session by leading a trio of Greenpeace activists who canoed into the Bruce nuclear power plant to prove it lacked security. That is quite interesting, because we were there only a couple of months ago. We did not think you could get in there with a battery of Gadhafi's tanks, but maybe that is post-9/11 security.
Ralph Torrie, Board Member of Sierra Club of Canada Foundation; President, Torrie-Smith Associates, Sierra Club Canada: A canoe is another story.
The Chair: It is, and it is in heavy water, so it is slow paddling.
Colleagues, these gentlemen's biographies are in your packages. I want to add that Mr. Torrie is with Mr. Bennett. He is a member of the board of the Sierra Club Foundation of Canada and is known for combining visionary thinking with rigorous analysis and has made original and important contributions in the field of sustainable development. He is a graduate of the University of Waterloo, and he was the assistant coordinator of the Energy Research Group of the United Nations University and the International Development Research Centre.
Colleagues, we have more details in the documents, as I mentioned. Now I will be quiet and we will go to you, Mr. Bennett.
John Bennett, Executive Director, Sierra Club Canada: First of all, I would like to say a few words about the Sierra Club. We are one of the oldest environment organizations in Canada, and definitely one of the oldest in the world. We are related to the Sierra Club in the United States, which was founded in 1892. We have been committed, since 1892, to conserving our wilderness and the health and welfare of people as well. For that reason, we believe that nuclear power should be phased out and that we ought to do it deliberately, beginning right away.
In 1977, when I visited the Bruce power plant, I posted the first Greenpeace banner, which said "Nuclear power, unsafe, unnecessary and uneconomic.'' Every one of those things was true then and is still true today. We can see clearly the safety question with what is happening in Japan right now.
However, it is also unnecessary. I grew up in the west end of Toronto near Highway 427. The quick way to get to school was to run across the highway, and the slow way was to walk around it and go over the bridge. The question is was it a necessary risk for me to run across the highway? My mother thought it was an unnecessary risk — and I agree with her now. The question for us is whether nuclear power is a risk that we need to take.
We will talk a lot about that argument today. That is why I asked Mr. Torrie to come with me, because he is the expert regarding how we can reorganize our energy systems so that we do not have to take that risk.
Mr. Torrie: Good morning, everyone. I think today if you were trying to cross Highway 427 during rush hour you could probably stop and have a picnic.
I want to express my appreciation to colleagues from the Coal Association of Canada, who have obviously had an encroachment on their time allotment this morning. Although it was no fault of ours, I do appreciate they had to make adjustments in order to accommodate the schedule change that allowed us to be here today.
I am not speaking from a prepared text. We did table some materials, which I will refer to. I want to be quick, for the reason I just mentioned and also to allow as much time as possible to respond to any questions and concerns that occurred to you during your deliberations and your travelling about.
I will address my remarks to two general topics. The first one has to do with risk, in particular nuclear risk. The second has to do with the question of need for, and alternatives to, the nuclear option.
My personal involvement in the question of nuclear risk dates to the early 1970s, which seems like a million years ago now. As a young physics student, I landed a co-op job; the prize jobs in those days were with Hydro or Atomic Energy of Canada Limited, AECL, because they paid the best and it was interesting work.
I had two assignments at AECL. One was to do research on the foundation of the Canadian nuclear safety philosophy, which was developed in the 1950s. To this day, it underpins the basic approach that nuclear engineers take all over the world to the question of managing the risk from nuclear power plant operation.
The second was to run Fortran simulations of loss of coolant accidents at the Bruce nuclear power plant, which was in the early stage of design at that point. I am telling you this because I have some personal technical awareness of some of the issues that come up in the field of reactor safety, particularly with reference to CANDU reactor safety, which has its own peculiar characteristics.
However, I am also an environmentalist. This morning, rather than give you a polemic on the problems with nuclear — I am sure you have heard that — I want to offer my observations on why we divide into such polarized camps on this question.
There is not a lot of disagreement on what the risks are from nuclear power. Everyone agrees that if you put a large amount of radioactivity in one place, with high-energy intensities, you have a hazard. Everybody agrees it is a big hazard and must be controlled and managed.
Everybody agrees that this technology produces waste that we do not yet have a way to dispose of and that will remain acutely hazardous for many years after it comes out of the reactor, as we are having a lesson in these days following the shutdown of the Fukushima reactors.
Everybody agrees that the increased levels of radioactivity in our environment represent a new health hazard. Our knowledge of that hazard is still evolving. It was very imperfect back in the 1950s, when the basic approach to nuclear reactor safety was designed. We had the data from Hiroshima, but I do not think there was an appreciation of the long- term effects of increased levels of low-level radiation in the environment. That is still evolving.
Everybody agreed that at almost any cost, it would be necessary to avoid even relatively small quantities of the fissile material finding their way out of the civilian nuclear fuel cycle and into the hands of rogue states or terrorist organizations — and some would even say legitimate states — where it could be manufactured into weapons of mass destruction.
There are other issues, but right from the early days of the debate over nuclear power, these have been the four big ones: reactor safety; radioactive waste; impact of the radiological contamination of the biosphere, which has occurred in the lifetime of the people around this table; and, finally, the prospects for preventing leakage of these materials into applications that would lead to weapons development, even dirty weapons development.
Even the facts on many of these issues are not in great dispute. However, where we come to differences — this observation is one that I first made 35 years ago and I have continued to refine it — there are different understandings about how we define "acceptable risk.'' There are very different understandings, to the point where the anti-nuclear and the pro-nuclear factions cannot even hear each other.
I do not know whether they are still doing it — they have gotten much more sophisticated in their approach to public communications — but in the early days when I was there, the nuclear industry used to say, "Anybody who thinks this is not safe is irrational. It is clearly safe.''
The model that prevailed in the development of nuclear reactor safety is the linear risk model or the probability consequence model. In simple terms, it comes down to this: If you have a consequence — for example, a release of radioactivity from a nuclear reactor — and the consequence is X, and you can show that the probability of that consequence ever happening is Y, then the risk of this situation is X times Y.
That got embedded into the engineering design standards for the safety systems, the shutdown systems, the emergency cooling systems, the containment systems and at least the regulatory structure of the Canadian and the nuclear industries around the Western world: Consequence times probability equals risk.
The problem in the early days, aside from the possibility that the model has a flaw, was that, first, we had a very imperfect understanding of the consequences. We did not have any reactor accidents to go on, except some incidents at some research reactors. We had very poor and early information on radiological health effects.
Nevertheless, the emphasis very quickly turned to limiting the probability of these events, to the point where you will see claims made in all seriousness by the nuclear safety engineers that they have reduced the probability of an uncontained release of radioactivity from a CANDU reactor to less than 1 in 1 million reactor years, or less than 1 in 100,000 reactors — those kind of claims.
How they come to those claims is to say, "Well, we have our shut-off rods, and we can show from the regular testing that there is only a 1 in 10,000 reactor year probability that they will fail when called on. Then we have our backup second shutdown system, and we can show through our regular testing of that system that it also has an independent — red flag — probability of failure of 1 in 10,000 reactor years. The chance of both of them failing at the same time is 1 in 10,000 multiplied by 1 in 10,000.
Now we are up to a 1 in 100 million probability — I think that is right — of these two systems failing at the same time. Then add to that the probability of the emergency cooling failing and so on, and you get these fantastically low probabilities of an uncontained release of radioactivity. Therefore, that is where all the focus has been.
A consequence of this is that very little attention has been paid in this model of risk to the consequence side of the equation. It does not matter how big the consequences get in this model, you can always make the risk acceptably safe by making the probability small enough.
What the Japanese reactor accident shows, what Three Mile Island, Chernobyl, and all the reactor accidents show us, is that almost invariably it turns out the systems were not really independent. They are at the same place. They are installed on the same reactor. They are physically in the same place. There is a fundamental profound limit to just how independent two things that are right beside each other can ever be. You will almost invariably find common mode accidents or unforeseen circumstances that render what they thought were independent systems not so independent after all.
At the first level of questioning of our nuclear safety situation there is the question of whether within the paradigm of the linear risk model we are succeeding, whether it is even possible with engineered systems to create believable probabilities that are low enough that they balance the very large consequences of an uncontained release of radioactivity.
Beyond that — and this is where the debate gets so polarized and entrenched — a new approach to risk has been emerging as a result, in large part, of the environmental crisis. It says wait a minute — there are some consequences that are just not acceptable. There is no probability that makes them acceptable. You should not do things that even create the possibility of consequences that are beyond a certain size. You should not do things that create the possibility of consequences that can permanently damage the ability of the ecosphere to support life.
These questions never get asked in the everyday world of nuclear safety, which is always focused on keeping that probability low with engineered systems. Therefore the idea that maybe the reactors should not be so big in the first place never comes up in the context of reactor safety.
After all, if the amount of radioactivity in one place is limited, so too will the possible maximum consequences of any release be limited. It never comes up in the context of reactor safety that maybe putting several reactors on the same site is not such a great idea, notwithstanding the economics, because it is just asking for these common mode accidents, which in Japan we are seeing. Japan is the other country besides Canada that has this habit of putting many units on a single site, and now we are seeing what happens. If one breaks down, you cannot even get the crews into the other ones because of the radiation fields and the danger, and the crisis management is focused on the problem reactor. Before you know it, the other ones are in trouble.
There are some profound questions on the consequence side of the equation that do not ever seem to get asked. The on-power refuelling, which is considered one of the attributes of the CANDU system and one of the ways that the higher capital costs of the system can be justified, is by not having to shut the reactor down for refuelling, but it introduces yet another whole class of possible accidents that involve problems between the interface of the calandria and the fuelling machine, and the possibility of fuel-sharing accidents, of which I believe we had one at Pickering. It never comes up that maybe having large quantities of heavy water creates a very difficult if not impossible-to-manage tritium hazard both for the workers in the plants and for the public in the event of uncontrolled releases. Perhaps we should not using heavy water in reactors.
All of these ideas of using heavy water, using on-power refuelling and having lots of reactors on one site to get more power and economies of scale are never tempered by a screen that asks whether that is taking the consequence side of the risk equation into an area where we do not want to go.
As a conclusion to these first few brief remarks on reactor safety, if there is going to be a review of reactor safety in this country, it should not be just internal to the industry, which is operating inside this probability consequence paradigm to the point where those inside do not see these more profound and deeper questions that we need to be asking, and asking especially at this time, when whether to continue with reactors that need rebuilding, which is a live issue in Quebec, New Brunswick and Ontario, or whether to build new reactors, which is a live issue at least in Ontario, if not in Quebec and New Brunswick, is being considered, and when we have this moment to stand back after this first 40 years and ask ourselves whether these risks really make sense. Never mind the engineering side for a moment. Let us just look at the consequence side and ask ourselves whether or not we are creating the possibility, never mind the probability, of consequences in places where we just should not be doing that.
This is not news to the insurance industry. They have never been willing to insure these things for just this reason. You can go to the insurance industry with a bundle of documents showing how unlikely an uncontained release of radioactivity is, but they still will not insure you against it; forget about it. A non-zero possibility of its happening is too high for them. The industry is therefore protected in every country where it operates by an act of Parliament or of government that limits their liability in the event of an uncontained release because it is not insurable. At least it has not been until now. Perhaps it would be if they had paid more attention to the consequence side of the equation. Maybe they would be insurable if the reactors were a lot smaller and therefore it was possible to show, without any doubt, that the consequences were fundamentally limited.
The CANDU reactor actually has a positive feedback loop right in the physics. If you begin to have what they call voiding or the creation of little bubbles in the cooling channels, the reactivity increases. This was also an issue at Chernobyl. Perhaps reactors should not be designed like that. Does it make sense to have a design that will not shut itself down — from the basic physics — in the event of a disruption of the geometry or the cooling capacity inside the core?
I will leave one conclusion with you on this segment on risk. It would be a mistake on your part, I would suggest, to conclude that the critics of nuclear power, such as the Sierra Club, who find the risks unacceptable, are coming from anything approaching what you might call an irrational or ill-informed base. This is a very rational, very well-informed and I would argue very modern approach to risk. It leads one to the conclusion that if we are going to preserve the biosphere, there are certain types of risks we should not be taking. Having large quantities of highly radioactive materials co-located with high densities of high pressure temperature and steam maybe is not such a great idea. Enough said about nuclear risk.
Of course now it sounds like we are talking about Russian roulette being an acceptable practice if there are enough chambers in the gun, but that, of course, begs the question of why would you play the game in the first place. That brings me to the second few remarks I want to make, which relates to what I have spent most of the time since the 1970s thinking about, which is what the energy component of a sustainable society might look like and how we could get there.
I have done this work for the last 30 years. One of the more recent versions of this was a fairly major study that was done in the run-up to the Kyoto Protocol. After all, sustainable energy is not just about reducing greenhouse gas, GHG, emissions; it is about creating an energy system that is sustainable in terms of toxics, of waste generation, of efficiently meeting human needs and so on. You can see the criteria in the documents that have been tabled.
The report that was done and sponsored by the David Suzuki Foundation in the run-up to Kyoto was an attempt to show a low-emission future for Canada that could cut our greenhouse gas emissions in that case by 50 per cent by the year 2030. I was also asked to see if it could be done without renewing the country's commitment to nuclear power, so that was a constraint on the study. By the year 2030 we will have no nuclear power, unless the existing plants are rebuilt and new ones are built, so I set about creating this scenario. The nuclear component was not that important to it. We were more focused on looking at a low-emission version of the Canadian energy economy.
When I was finished, the Sierra Club Canada and some other groups asked me to look at the Quebec, New Brunswick and Ontario components of that national study and provide more detail about what a transition to a low- emission future would look like that also had no nuclear power. That led to this little report, several years old now because it dates to the Kyoto Protocol period, which has been tabled for you. When Mr. Bennett asked me to come here today, I said, "You know, no one has been looking at what the non-nuclear option looks like.'' The last thing I did was that phase-out report.
I do not want you to look at it as being a definitive answer to the question of how would a non-nuclear future look, but more as an illustrative example of how it could be possible to make a transition away from the nuclear option that also has very low greenhouse gas emissions relative to where we are now.
I would also offer the observation that it is startling to me, and will be to you, if you think about it, that there are so few examples of this kind of study. Never mind the anti-nuclear community doing them — where is plan B? Where is the contingency? What do we do in Ontario if we cannot get it to together to extend the nuclear option, even if we want to? There has been an absolute dearth of serious, properly funded, detailed contingency research and analysis on what that plan B might look like, even just having it available in the event we need it. We need much more, and government needs to step up here, in my view, if for no other reason than to have that contingency available in the event it is needed.
We need an exit strategy for the nuclear option, and it needs to be worked out in considerably more detail than it has been to date and certainly in much more detail than little glorified back-of-the-envelope analyses like the kind I have tabled for you here today.
Suffice to say that a body of opinion is developing within the energy community that is seriously contemplating in some detail, with respect to the economics and the engineering, what the transition away from nuclear looks like, and it is not so terrifying. You see this throughout Europe and the Western world.
Some of you may be aware of the work the national round table did a few years ago that developed those wedges that showed how our greenhouse gas emissions could be brought down gradually over the next 50 years. I did that work. In that scenario, we left nuclear in. We pushed it hard. We pushed it hard in terms of how many reactors could reasonably be built in this country by 2050. I cannot recall the number off the top of my head, but it was an aggressive nuclear expansion scenario; however, it results in a GHG reduction sliver in that collection of wedges for reducing our emissions that is quite small. It is one of the smallest slivers. The heavy lifting is done by energy efficiency, renewable electricity options, biomass-based liquid fuels and cogeneration of electricity and heat with natural gas.
The nuclear option has always had this difficulty in that all you can do with it is make electricity. Electricity has a limited role, at least right now, in the range of energy end uses it provides in this country. The electricity in this country, even without nuclear, is already carbon-low. In fact, for most of you around this table, there is no nuclear power in your province; there probably does not need to be; and maybe there never will be. It is a live issue in just three provinces, most difficult for Ontario, obviously, and it would take longer for Ontario than for the others. Quebec could walk away from it and no one would know, in the same way hardly any people know they have one. For New Brunswick and Ontario, however, it is a more difficult challenge, but it could be done. In fact, the more you look at these low-emission futures, the more you realize that they offer the possibility of not only an environmentally preferred way of meeting our future energy needs but also one that is more consistent with a sustainable economic pathway. The supply and demand of energy becomes much better matched to human-scale needs for energy, which nuclear has never been, at least not in the way it has been developed.
To summarize, I have two points. First, we need to be asking some very profound questions about nuclear safety. It is not us versus them in a simple debate between who is right and who is wrong. It has to do with the shift that is happening in the world in how we look at the risks we take, in which there is a legitimate, reasonable and solid foundation for believing that nuclear risks are not acceptable. You can disagree with it, but you cannot say it does not make any sense.
Second, there is a growing body of literature and research on the possibilities of a sustainable energy future that can be based on much lower levels of fossil fuel production and consumption while phasing out nuclear power at the same time. There is no easy energy future, including that one, but it is a contender for one of the different possible energy pathways that lie before us, and it is a contender in which there is a growing body of interest, especially in the wake of the events in Japan in the last few weeks.
I will close by saying I know how much everyone in the Sierra Club Canada feels the same way, and how much our hearts go out to the people of Japan in this situation. It seems to be their fate to be the suppliers of epidemiological data on the biological and health effects of radiological contamination. We all have friends and colleagues in Japan, and it is very painful right now to see what has happened and what will continue to happen, unfortunately, for some time into the future as the result of an ill-informed and inappropriate engineering design philosophy being applied to a risk that is just too big.
The Chair: Mr. Torrie, thank you very much for your comments directly on point of the study we are trying to conduct. It was a balanced, logical and reasoned presentation. I have to ask myself what the reaction would be in France if you were in Paris giving the same presentation this morning.
Colleagues, we have only 21 minutes left for questions, and I have seven questioners on the list. Let us ask one question each.
Senator Mitchell: I have many more questions than one, but I appreciate what the chair is saying, so I have to triage.
To clarify one thing, I think at some point, Mr. Torrie, you were perhaps suggesting — but I think not really, so just clarify for me — that if reactors were actually made smaller and were dispersed, not concentrated, and perhaps were done by government, rather than the private sector — the Japanese case involved some private sector questions about rigour and so on — if we met all of those types of changes and had state of the art technology, we might actually be able to do this and limit the overall risk of impact or risk of consequence. Were you suggesting that? Or are you are saying no whatsoever, completely?
Mr. Torrie: I do not know how relevant my opinion is on this. Mr. Bennett may want to comment from the perspective of the Sierra Club Canada.
As I am sure you are aware by now, the idea of smaller nuclear reactors is quite hot right now — no pun intended. They are not that small, though. The ones I see are still 40 or 50 megawatts, which is an enormous machine relative to human energy needs, would still generate large quantities of waste heat, would still be too large to be effective as a cogeneration site, and would still have concentrations of radioactivity that would admit to very large consequence events.
It seems that the worst possible accident that can happen at very small nuclear reactors, the Chalk River reactor sort of being on the scale we are talking about, is much smaller than what you would see into tens of megawatts, never mind hundreds. My information and analysis on that is not up to date. I expect that the economics become very difficult, and reactor safety is not the only dimension of nuclear risk. You would still have the waste problem. You might actually make the problem of security worse by having many small sites, and you would still have the ongoing increase of the low level of radioactivity out there.
Senator Mitchell: My frustration is that I am deeply concerned about climate change, and most of the solutions to it run into some kind of problem, so the question is whether there is a practical solution that can be done quickly enough to begin to offset it. It is getting late in this climate change emissions issue, and we need to find a practical way to solve this problem that people will accept, and maybe people will never accept nuclear again, so we may have solved that problem. We still have to assess the risks of climate change against other risks as well because climate change is pervasive. It is affecting the entire world and every individual in it. How do we rally around that?
Mr. Torrie: There are arm-waving arguments about the role nuclear can play in responding to climate change, but when you run the numbers, it does not get us there because it does only one thing. You may not realize this, but our problem in this country is that almost 60 per cent of the actual end use of energy in this country is for heat, and over half of that is for low-temperature heat, for keeping buildings like this comfortable. Another 25 per cent of that is liquid fuels for transportation.
The piece of our end-use energy pie that actually requires electricity because it consists of lights, small motors, appliances, telecommunications or electronics, is 13 per cent. We provide most of that with hydro in this country. Nuclear is in that 13 per cent wishing it could be in the big pond, but the question is what will electricity's role be in the future. You have to answer that question at the same time that you look at the possibility of whether there could be a role for nuclear. It just looks like an inappropriately matched source to end-use needs to me, and it costs so much that it also has the effect — this is a well-known phenomenon — of drawing capital, bright minds, innovators, public policy attention and government subsidies. AECL received more money in one year than home energy retrofits in yesterday's proposed budget. It is like a big sponge. What do we get in return? We get a contribution to a small sliver of our energy needs.
Senator Neufeld: I appreciate your remarks. I come from British Columbia, where I put in an energy plan that said no to nuclear facilities, and that is because we have other options. There are other places that do not have other options.
I have many questions, but the remarks I found most interesting were when you talked about using natural gas. I am interested in how Sierra Club Canada feels about the fact that when we try to go out and get natural gas, we get a certain amount of reaction from the environmental movement saying we should not be doing so. I have heard it here in testimony. I am not saying directly from you. It may have been directly from you, or it might have come through you folks.
What would Japan do? You could probably put all the solar panels and wind farms in the world on the land base and there would be no land left for anyone to live on because Japan is not big enough to generate the electricity they need to get out of nuclear generation. Where would one get it from, then? There are places that cannot get it, and there are places around the world building it now. I agree with the chair. How well would you be received in France with 98 per cent coming from nuclear sources suggesting you should change it all and do something different? I am not saying I do not take to heart the things you said; I understand that, but there are some things we have to look at in reality as well. There are plants being built in Russia that everyone talks about, getting away from the cold, and China should be doing more of that. There are all kinds of pros and cons to everything. No one has the right answer. I think it is a mix of a bunch of things, but I do not believe we can just say no to certain forms of energy that we have had for a long time.
The Chair: Your question?
Senator Neufeld: There were two questions, one about natural gas and the other about what Japan would do.
Mr. Torrie: One thing that has taken me to Japan in recent years is that the Japanese government, along with the U.K., has been the sponsor of an international network of people researching your question. There is a Japanese component to the research on this, and I would be happy to send it to you rather than getting into it here. I believe there is also a French component to that. To the extent that the committee is looking at energy options for these other countries, I could show you what people in those countries are saying. My focus has pretty much been on Canada in my career, but I have some awareness of how your question is being addressed in other countries.
If the implication of your question is that in one generation the human species has become irrevocably dependent on an energy source that we did not have 35 years ago, that is a rather startling comment. That seems unlikely to me.
As far as natural gas goes, I do not know whether Mr. Bennett wants to comment on that from Sierra Club Canada's perspective.
Mr. Bennett: We see natural gas as a transition fuel. We do have problems with coal bed methane and with fracturing because it is a much different, more environmentally not-benign way of obtaining it, and it has been proceeded with without full environmental assessment and full understanding of the implications. That is why you are having problems in Northern British Columbia, because suddenly a brand new technology is being forced upon a community without a proper environmental assessment to determine whether it is actually sustainable.
Regarding the use of natural gas, this building is heated by natural gas, but when it is burned, it could also be generating electricity for the lights, and it is not. Therefore, we are using natural gas in a very inefficient way. We should be making sure that when we burn natural gas, we also produce electricity as a by-product so that we can actually extend the supply of natural gas for many more years to come. We have to stop waste, and that is the biggest issue.
In terms of France, we would do exactly what we have done in Canada, which is to do a study and determine how to do it. France did fine without nuclear power. It will do fine without nuclear power in the future, but it will not be able to turn it off tomorrow. There are many ways to figure out how to solve the problem.
Senator Neufeld: In response, this has to get on the record. You said fracturing is a new technology, but it has been around for 60 years or more that I am aware of. I have worked in the industry. When I was a kid, I hauled frac sand. It is not new technology; fracturing has been around for a long time. It is a way of getting around your organization saying we should maybe not have natural gas. I want to put on the record that you said fracturing was a new technology, and I totally disagree with you.
Mr. Bennett: In how it is being applied today, it is a relatively new technology. The way it was allowed to go ahead without proper assessment and proper involvement in the community in Northern B.C. resulted directly in the impact of it.
Senator Neufeld: I live there.
Mr. Bennett: I know. I also know many other people who live there. It is not the only place using the technology. It is now being presented as an option in Quebec and all across the United States, and it is being questioned everywhere.
What we say is what we have always said: Let us have a full environmental assessment so that all the options can be looked at. However, we have been deprived of that in British Columbia. We have not had an environmental assessment. After that happens, then we can have another talk. Until you have those assessments, you cannot say it is not a brand new technology and you cannot say it does not have environmental implications because you have not bothered to do the work.
Senator Neufeld: Everything has environmental implications. Your flying, driving here or walking down the street has an environmental impact.
Mr. Bennett: I took the bus this morning.
The Chair: Skip the bother, skip the fuss; take a public service bus.
Senator Banks: Mr. Torrie, you have not turned me into a tree hugger yet, but you have changed my perspective today, and I thank you for that.
With respect to the acceptable risk thing, this committee addressed before that question. When we were in Paris, talking to the International Atomic Energy Agency, IAEA, and all of those people about this, we heard from a critic who said that these levels of risk for exposure to people who live near or work in nuclear plants are set by some organization someplace that sort of arbitrarily says what the level of risk is. The person, whose name I cannot remember — it was a doctor who appeared before us — said those are not right. They arbitrarily set those levels of risk, but they are not right. She made an argument to that effect.
Does that same thing happen with respect to the safety factor of a nuclear plant? Would you tell us, specifically? I received a note last night from a man who said he designed the safety systems at Darlington, among other places, and that its safety factor is a level 1 safety factor. He explained there are level 2 safety factors and level 3, and he went through the arguments he had to go through to get them to be level 1.
Tell us about this business of levels, if you could, briefly, so we will know about it for our future deliberations.
Mr. Torrie: I think you are referring to the defence and depth. The formal definitions of these safety levels relate to the regulatory and design environment that the Canadian reactors are designed under, and they go back and forth with the Canadian Nuclear Safety Commission, CNSC, on this. If you need descriptions of those levels, I would refer you to them rather than have it mangled by me.
I can assure you that it continues to be the focus of the nuclear industry, in this country and everywhere, in the way they set those levels up that they focus on creating engineered systems with demonstrable probabilities of failure that are independent from each other. They can, therefore, be shown to have a probability of simultaneously failing that is low enough that, when you multiply it by the possible consequences, it equals acceptable risk.
That foundation goes all the way back to the work done by Ernest Siddall in Chalk River in the 1950s, along with others in the United Kingdom and the United States at the time, because they had a problem. Other industries can look at early experiences, like the coal industry, which they used as a reference point at the time, by the way. They looked at what was believed to be the death rate from the coal fuel cycle in the 1950s and said, "We have to do 100 times better than that, because we are new and do not have any experience with accidents from our technology.'' They used that to set their target. Maybe it was 1,000 times better, but the actual phrase was "average death rate.'' They would never use that today, but in the early papers that was consequence, deaths, probability, events per year over time, one in one million or one in ten million, equals deaths per year on average. It is a linear type of thinking you could use to justify world war III, as long as it only happens once.
Senator Banks: Are those levels that are set uniquely Canadian, or is there a universal measurement?
Mr. Torrie: The details are uniquely Canadian. I think the former director of the CNSC was quite active in trying to globalize the approach to nuclear regulation, for obvious reasons. However, in the nuclear industry up until today, the reactor designs tended to come with a built-in software, if you want to call it that, of regulatory approaches. If you bought CANDU, whether you were India, Pakistan or whoever, you tended to buy into the Canadian approach to licensing and regulating those, and there are differences.
The Americans, in general, tend to go for a much more detailed specification of components and their performances. The British approach, which Canada more closely follows, tends to stand back and give a smaller list of regulatory requirements that the designers must then demonstrate they are meeting, rather than putting out specifications for every washer, nut and bolt, which tends to be a caricature of the approach.
The Chair: I think Mr. Torrie offered to give a little more background information on how one develops these safety levels. If that offer is open and you could give us that through the clerk, we would be delighted. I am seeing that clock still, and I have to say, if you are willing, on another date, I would like to invite you back to the committee.
We are down now to three questioners with six minutes remaining.
Senator Lang: I have just an observation on what I read here. Indications are that you feel, for Ontario specifically, that the electricity demands are levelling out or will be decreasing, if you go through energy efficiencies and a number of other steps from the point of view of Ontario in particular, and, I would, assume Canada, if that was the case.
I want to ask one question on that. How can you say that this will happen when we know, from all the demographics that have been presented to us, that the world itself is looking at going from seven billion to nine billion people within about 30 or 40 years? We have that much more demand for energy, no matter what the source is. Mr. Bennett, how can you can justify that?
Second, Mr. Torrie, I appreciated your comments. What concerns me is that we have 50 or 60 years of nuclear experience. We have 50 years of nuclear waste stored within 40 miles of most parts of Toronto in what looks like plastic containers. They are not.
Mr. Bennett, in view of the fact we do have that nuclear waste, does your organization support the underground storage of that waste? Would you support the government in its endeavours to find a place that could be designated and utilized for that purpose so that we meet the real problems we are facing instead of having organizations that always just say, "Not in my backyard''?
Mr. Bennett: Since we are a national organization, we do not have a backyard.
Senator Lang: Everybody has a backyard.
Mr. Bennett: The first thing that must be addressed is the continued production of the waste. Let us start by talking about stopping the production of waste, and then we can solve the problem of getting rid of it. We do not solve the problem as long as we continue to create more.
Senator Lang: I will step in, because I think you are side-stepping the issue.
Mr. Bennett: I am not side-stepping the issue at all.
Senator Lang: Yes, you are. I have a question for you. We have 50 years of nuclear waste stored within 40 miles of most parts of Toronto. We all saw it; we went on a tour of it.
As an organization, in dealing with what is there, are you prepared to support governments and the fact that we should be creating underground storage somewhere in order to minimize the consequences of the storage of that waste?
Mr. Bennett: I will be clear again. The first point is to stop producing it. Second, we are, in fact, participating in the upcoming hearings to discuss the depository. We cannot comment on a specific site until we know where it is and have looked at the geology and understand the transportation implications.
If you ask me at this stage whether we support a deep depository, the answer is no. We remain open to being convinced that there is a proper location, but the fundamental problem is that there is no hole big enough, as long as you keep producing more and more waste.
The solution is to start there. That is what we should do. Quickly, on Senator Banks' point in relation to regulation, the regulations for tritium releases in Canada are several orders of magnitude higher than in Europe and California. It just so happens that the CANDU technology produces a greater amount of tritium than other designs. Therefore, the standard, which is supposedly a health standard, is based on what the reactor can achieve, not what the public can absorb.
When we made that point, the Canadian Nuclear Safety Commission said we were producing junk science within half an hour of our releasing our report. There is a strong bias in this system to try to stigmatize people like me as unreasonable when we are not unreasonable. I think those who are conducting a nuclear experiment on our behalf without our permission are the unreasonable ones in this society.
Senator Seidman: I would like to go back to the acceptable risk issues again. Mr. Torrie said there are certain types of risks that we should not be taking. That was quite an absolute statement. Clearly, there are similar issues, risks and consequences associated with oil and gas, as we have seen recently in the Gulf, as we hear about the shale gas exploration fracking issues. Many environmentalists say these risks are not worth taking, either.
Based on this argumentation, we would discontinue or phase out, as you suggest, nuclear, but also oil and gas. One has to do a risk-benefit analysis also, not just a risk-consequences analysis. Will you please comment on that?
Mr. Torrie: That is a big, big question. All I will say is that the research on low-emission futures does not generally involve the phasing out of fossil fuel use. It involves bringing it down to a level that is manageable by the ecosystems into which you are putting that CO2, which is a much lower level than we have now, but it is not zero.
Senator Seidman: I do not think you answered the question.
Mr. Torrie: The presumption in your question is that fossil fuel use must cease. There are no doubt people who hold that view, but the body of research on low-emission futures does not make that presumption. It sets as one of its limits that we have to bring greenhouse gas emissions down to a level — it is not zero — that the biosphere including all the biomass is capable of breathing in and out on a sustainable basis. That does not mean you need to stop using fossil fuels. It means that depending on what success might be achieved with carbon capture and storage, you have to bring it down to a sustainable level.
Senator Seidman: What I was asking is that, based on your argumentation for nuclear phase-out, if one used the same argumentation, one would then phase out oil and gas as well.
Mr. Torrie: Let me then say that all of these low-emission studies are absolutely focused on the cost-benefit trade- off. The benefit is not the production of energy commodities for its own sake. There is no demand for fuel and electricity, when you stop to think about it. What the demand is for, what the real benefit is, is warm, comfortable rooms, cold beers, hot showers, getting access to a job or education or shopping. The research method is absolutely focused on the benefit. That is where we start. We do not start by presuming that the only way to make sure all of those human needs and desires are met is necessarily by increasing the energy commodity contribution. Maybe better buildings, better vehicles, better urban designs, et cetera, can allow us to get the benefits that we really want, which are the cold beer, the hot shower, the comfortable room, and the access to education, employment and shopping, with a much smaller contribution from energy commodities and a much larger contribution from intelligent design, information and efficiency of commodity use.
The core of this new way of thinking about energy is to put the commodities to a broader context.
Senator Seidman: I appreciate that. Thank you.
The Chair: That was a very good exchange. I will have to conclude with you, Senator Brown, and I know you will be brief.
Senator Brown: With the disaster in Japan, for the first week or so we were talking about nuclear problems. It was not the nuclear problems that caused the problem; it was the tsunami. It was the largest earthquake that had been registered in many, many years. The wall of water that hit the reactors was so gigantic that it took over the entire reactors. It took the water into the stop generators that would allow them to shut off the rods and took the power completely away from them. It allowed hydrogen to collect under the roofs and they did not have the fans to get rid of them. It just kept tumbling.
I do not think that necessarily says to us that the engineers cannot find a way to build a reactor that can stand that kind of shock. We have had accidents with airplanes and cars for many years, and we get better and better at building better and better ones all the time, and fewer people get killed and there are fewer accidents.
One person I heard on the radio had 25 years in nuclear energy, and he said the problem for Japan is that it will not be able to get away from nuclear energy simply because a 40-megawatt to 50-megawatt reactor, which is what you talked about, fits in a 12-foot by 12-foot by 12-foot cube. I guess this table would just about hold two of them. He translated that into horsepower. It is 180 million to 250 million horsepower. That is why Japan cannot get away from it.
Are you saying that engineers are not capable of building a truly totally safe nuclear facility?
Mr. Torrie: We could talk about what you mean by "truly totally.'' Under what most people would think you mean by that, the answer would be yes. I think most nuclear engineers would also say we cannot achieve absolute safety.
Senator Brown: That gentleman disagrees with you.
Mr. Torrie: He thinks he can achieve absolute safety? He should get the Nobel Prize.
Mr. Bennett: There were also plenty of people who said the automobile will not replace the horse because there are millions of them and an entire industry and transportation system are based on them, but they were replaced. We can replace any energy source and have a safer environment. That is the message we would like to leave with you: We do not need to take unnecessary risks. We do not need to spend huge amounts of money on things we do not need. We can replace the horses.
The Chair: Mr. Bennett and Mr. Torrie, you have left us with a clear message. When I was having a little chat with Mr. Bennett on Tuesday evening, when we were hoping we could still have a meeting, I asked him if he had been up in Darlington chained to the pews in the church there where they were starting off some hearings. You told me — I am paraphrasing — that you do not do that anymore. What you have been doing this morning is much more constructive. We appreciate the context in which you delivered the message this morning. If I am the chair when we come back to the next Parliament, I would love it if you would come back and let us explore this with you. In terms of the study we are doing, I think you very accurately assessed the kinds of questions and articulated what we need to be asking and hopefully answering in our report.
We are grateful to you both. Thank you very much.
I will ask the next witnesses to come forward.
As the witnesses settle in, I will show you a document. I hope you all have it. The title is something the previous witnesses might well want to look at. All these sources of energy will be fitting into the ultimate mix in some way or another. I think the risk assessment is a critical part of how we will be going forward.
There are four witnesses in this panel before us: one from the Coal Association of Canada and three from Sherritt International Corporation. From Sherritt, we have Ms. Juanita Montalvo, Managing Director of Corporate Affairs and Sustainability; Mr. Amar Amarnath, Senior Consultant; and Mr. Sean McCaughan — a fine Irish name —the Managing Director, Coal Division. From the Coal Association of Canada, we have Mr. Allen Wright, who I believe is well-known to some of us. Thank you for giving up a bit of your time to enable us to hear from the Sierra Club Canada this morning.
I will try to steal a little extra time at the other end, if Ms. Gordon will let me. You were in the room when I introduced us earlier, I believe.
Allen Wright, President and CEO, Coal Association of Canada: I know many of the senators, as well, from another life.
The Chair: Mr. Wright, you are the President and CEO of the Coal Association of Canada. I believe you put this document before us.
Mr. Wright: We did it as a team. I will kick things off today. I will then turn it over to Sean McCaughan, who will then turn it over to Amar Amarnath, who is our technical expert. That is one reason he is joining us today.
I appreciate the opportunity to appear before this Senate committee. I have felt strongly about this topic for a long time. I am engaged in the Energy Policy Institute of Canada, EPIC, group that is looking at the energy side, as well. It is something that is near and dear to my heart. It is critical for Canada, and I think we need to look at this. There are some challenges, not the least of which are jurisdictional challenges when the provinces are the ones who own the energy resources. It does make it a little bit more of a challenge.
Today I want to start off by talking about the Coal Association of Canada and giving a brief background on what we do, and then I will talk a bit about the global and energy reality, coal in Canada and coal in the energy mix. I want to then talk about meeting the challenge with technology. Going forward with many of the hydrocarbons will result in the use of new technology.
Before you is a presentation, and I will refer to the slide numbers to make it easier for you to follow along.
The Coal Association of Canada has been in existence in some form or another since 1906. We have been around for a long time. We represent companies engaged in the exploration, development, use and transportation of coal. Our members include coal companies, railways and ports that ship the coal, industry suppliers of goods and services, and municipalities that have an interest in furthering the mining, transportation and use of coal as a safe, sustainable and environmentally and socially responsible source of energy.
There are two types of coal. One is metallurgical or steel-making coal. About 70 per cent of the world's primary steel is made using coal. We will focus on thermal or energy coal, and that is the reason Sherritt International Corporation is here with me today. It is far and away the largest producer of thermal coal in Canada.
Slide 3 shows a map of where coal is located in Canada. You will see most of it is in Western Canada, though there is some in the Maritime provinces: New Brunswick and Nova Scotia. A couple of exciting projects might happen there, as well.
This map needs to be updated because it does not really reflect some of the deposits found in Northern Saskatchewan and West Central Manitoba. Not long ago, a company was drilling for diamonds and came up with a significant coal seam. Several others have found even more. It is an area that needs to be addressed.
Slide 4 indicates that we produced 68 million tonnes of coal in 2010, of which two thirds was thermal and one third was steel-making metallurgical coal.
The Chair: Is that all consumed domestically, or do we export any of that?
Mr. Wright: We are a significant exporter, although most of the coal exported is metallurgical coal for making steel. Our target markets are Japan, Taiwan and so on. The majority of the thermal coal is consumed domestically in Alberta and Saskatchewan for power generation.
As I mentioned, 56 million tonnes is used in Canada, of which about 11 million or 12 million tonnes is imported. The rest is produced in this country. We provide about 8 per cent of Canada's primary energy and about 14 per cent of Canada's electricity. It is important to note we are a major contributor to the Canadian economy. Last year, it amounted to about $5.5 billion in economic benefits.
Slide 5 gives you a picture of coal-fired generation within Canada. It is a regionally based energy source. As you know, Quebec is primarily hydro, as is Manitoba and British Columbia. It is a major energy source in Alberta, Saskatchewan and Nova Scotia.
This gives you an idea of roughly where the percentages are as far as the generation is concerned. It also gives you an idea of where the plants are.
The Chair: Quebec is absolutely nil?
Mr. Wright: The only coal Quebec uses is in making cement.
The Chair: That is for the shoes they need to use in Quebec courts.
Mr. Wright: It is important to point out that, with respect to the energy source they use, the provinces will use whatever they have a competitive advantage with.
I will talk next about the global energy reality. Right now, coal supplies about 29 per cent of the primary energy around the globe, 40 per cent of which is electricity-based. The International Energy Agency, IEA, estimates that by 2035, hydrocarbons will still contribute 80 per cent of their total energy. They also predict coal will be used to produce 43 per cent of an expanded electricity market.
It is important to look at that and put it into context. I want to talk about the U.S. For many people, looking at China and India does not have the same relevance. The fact is we are connected at the hip with the United States. The U.S. projects that coal will still be 44 per cent of its power generation by 2035. It will be down a wee bit, but it will be part of a larger pie. It is important to realize that it will continue to be used.
Slide 7 gives you an idea of where coal is distributed around the globe. It is important to look at that. The world reserves are higher and more distributed than oil and gas. The other positive about coal is that it is not typically subject to geopolitical issues. That is important. Many of the other fossil fuels and other sources are subject to geopolitical issues. We talked about nuclear today, which is obviously another concern.
The other important thing to point out here is that coal is a strategic resource, not only in India and China, but particularly in the United States. The U.S. is called the Saudi Arabia of coal. They are looking at many ways to use that, whether for power generation or coal to liquids. A Canadian company tried to set up an operation in Canada. As you know, you are never a hero in your own home court. That company is now down in Texas and has a new technology for coal to liquids that will turn coal into a synthetic crude that can be refined.
The Chair: What is the name of that company?
Mr. Wright: Quantex Energy. It is based out of Calgary but is building its plant in Texas, which is sad in many ways.
The other important thing when looking at hydrocarbons, and coal is one of them, is that there is a lot of discussion about the use of renewables. We are strong supporters of the use of renewables. When you build a wind turbine, it takes more than 170 tonnes of hard coking coal to make the steel for that tower, so we are engaged in that as well.
However, if you look at the IEA's projection for 2035, non-hydro renewables will only account for 7.3 per cent. We have to be realistic about providing the energy that we require. The question really is not whether we will use coal in the future; it is how we will use it better.
I would like to turn it over to my colleague, Mr. McCaughan, who will lead into what Mr. Amarnath will talk about, the technology and what we are doing about it.
Sean McCaughan, Managing Director, Coal Division, Sherritt International Corporation: Thank you for inviting the coal industry this morning to present to you. Mr. Wright has done a good job describing the coal industry in Canada and pointing out that coal is a very valuable source of energy to Canada. I would like to elaborate further on a few of those points regarding coal and its role in Canada's energy mix.
On slide 8, one of the key points I think the Senate committee is aware of is that Canada has an abundance of coal. This slide speaks to approximately 200 billion tonnes of coal in Canada.
The Chair: Both types?
Mr. McCaughan: Yes, both thermal and metallurgical. To put that in context in terms of years of production based on today's level of production, it equates to centuries and centuries of resources. We have a tremendous source of coal in Canada.
Work is being done by the Alberta government to try to quantify deeper coal. I am hearing numbers in the range of up to three trillion tonnes of deep coal in Alberta. That is a tremendous number and would put Canada more in line with the amount of coal that is spoken about in the United States.
Another key point regarding the abundance of coal in Canada is that if you were to translate it in terms of the amount of energy, there is more energy in coal in Canada than there is with the oil and gas resources combined. I think that is quite valuable to Canada.
Slide 9 highlights a key characteristic of thermal coal for producing electricity. We have attempted to show that coal, on a unit-of-energy basis, is relatively inexpensive compared to the other fossil fuel sources. If you compare coal — the green, blue and light purple bars in this chart — to natural gas and oil, it is a very inexpensive fuel for producing electricity. It is one component of producing electricity, and it certainly helps make coal a low-cost baseload provider of electricity in Canada.
The next slide tries to show the cost of electricity using coal. It is important to note that there are many studies out there today looking at the cost of new builds for electricity generation. This is just one of them. That cost will change as the coal industry and the utility industry look at greenhouse gases and how we reduce and capture those emissions. We will speak to that in a moment, regarding clean coal technologies.
What we want to highlight today is that if you were to build generation today using current technologies, coal is a low-cost option that provides for low-cost electricity today. In fact, the units that are supplying coal-fired electricity today in Alberta, Saskatchewan and other parts of Canada are providing electricity at rates lower than what is shown in the chart here.
On slide 11, we speak more about the stability of coal prices. Coal is a predictable fuel source in terms of cost. It has been stable over time, which is its advantage relative to other fossil fuel sources. There has been tremendous volatility in natural gas and oil in recent years. That is an important point for predicting electricity prices in order for consumers to be able to have a predictable bill. It is important for utilities in terms of financing and planning for new generation.
I will transition to slide 12. I have now gone through some of the key characteristics of coal and why it is important as part of Canada's energy mix. For the rest of the presentation, we want to speak about what the coal industry is doing about coal and its emissions. That is directly linked with how coal is used to produce power by the utility sector.
Coal has emissions, like any other fossil fuel. We have made significant improvements over the past 30 to 40 years to reduce emissions from coal-fired power. Most reductions have been in SOx and NOx — particulate matter and mercury reductions. We are seeing those improvements continue.
For example, mercury capture is now required in Alberta. Utilities are using activated carbon technology to capture 70 per cent and above the level of mercury that is in flue gas emissions. That mercury capture technology is being implemented in the United States in the coming years. Sherritt, which Mr. Amarnath will speak about later, is involved in that through an activated carbon plant we have constructed.
Greenhouse gases are the largest emission challenge the industry is working on. It is paramount that the industry continues to research and develop ways to capture and reduce greenhouse gases. As the coal industry, we are investing in that.
Speaking on behalf of Sherritt, given that we are the vast majority of the thermal coal industry in Canada, we have been investing in gasification technology, understanding carbon capture and storage and investing in other clean coal technologies for many years now. We have built a pilot plant in Alberta, which is unique in Canada. Mr. Amarnath can speak to that more. We are members of the Canadian Clean Power Coalition, CCPC. We have joined a couple of other associations, with the Lignite Energy Council of North Dakota, and have done quite a few studies with some universities on improving clean coal technologies.
I will ask Mr. Amarnath to speak about the clean coal technologies that Sherritt and the industry have been involved in.
The Chair: That brings us to page 13, is that correct?
Amar Amarnath, Senior Consultant, Sherritt International Corporation: That is correct. I will concentrate on what the coal industry in Canada is addressing — some of the problems faced by the industry in Canada.
Sherritt has been a premier hydro-metallurgical company for the longest term. We only acquired coal in 2001. Most of us were introduced to coal 10 years back. When we took over the coal, we had to understand what coal is. I have to be honest that I did not know much about coal 10 years back. We knew a lot about nickel ore, copper ore and zinc ore, so we coined a new term within our company: We called coal "carbon ore.''
The reason we coined the phrase is that we came to the conclusion that carbon itself is not problematic, other than it produces C02. However, all the other things that come with the carbon, such as the pyrites, sulphur, selenium and mercury, are the problems.
That brings me to the slide, which shows what is happening today. Today, we have a mine mouth operation, which means we mine the coal and directly burn it into the power plant. If you look at any other hydrocarbon industry, nobody takes a barrel of bitumen or a barrel of crude or natural gas and burns it directly. They have to refine it and get rid of all the other things. In the case of the coal industry, because coal is considered cheap fuel, for a long time people just took it and burned it. When you do that, all the sulphur, mercury and ash that comes through that is problematic. What we did then was try to capture all those things after combustion. We tried to find the solutions.
We thought this may not be the best way to do it. Why not use the idea that prevention is better than a cure? Why not get rid of all these deleterious elements that come with coal ahead of gasification and put it back into the mine in the natural state? If we do that, if we clean the carbon as pure as it is, that is a social responsibility and also an economic responsibility; it is a better way of thinking, so our thinking changed. In the last seven years we have been concentrating precisely on that.
The words "clean coal technologies'' are used to describe many things. When people consider integrated gasification combined cycle, IGCC, they are all clean coal technologies, but at Sherritt, when we talk about clean coal technologies, we refer precisely to cleaning coal before it goes to combustion.
We participated in a study that was done by the federal government in 2004, along with the utilities, called the Clean Coal Technology Roadmap. We came up with the road map for Canada in 2004, in which we stressed that we would like to do more research ahead of combustion.
The Chair: On this slide 13, is "PC'' plain coal?
Mr. Amarnath: It is powder coal. It is crushed. It is the lingo we use in the industry. I apologize that I may have inadvertently used some acronyms.
For tomorrow's technology, as we speak about it, we need a coal refinery just like a petroleum refinery or an oil and gas refinery. We need a coal refinery that takes care of all the bad elements, and then we can give a designer coal for combustion to the utilities so they can perform better. Or we can give it to the gasification, which also produces poly- generation or IGCC, to produce synthetic fuels or hydrogen or fertilizers or anything else.
I will move on to slide 14. There are three things to consider when you look at the industry. If you want to clean coal it can happen in three places: One, before combustion, as I mentioned, you can do a lot of work in cleaning coal. Two, you can also increase the combustion efficiency of the plants themselves because as you improve the combustion efficiency, you will automatically decrease the GHG intensity that is produced by the PC power plants. Three, the last thing is what you will do after combustion. You can pre-clean, improve the efficiency and post-clean to reach a minimized emission of GHG and also virtually eliminate some of the problems that we have today with SOx and NOx, particulate matter and mercury.
On slide 15, I tried to portray what we call a clean coal value chain. Here we are basically saying that instead of using the raw material acid that comes from the ground directly into power generation, if you take the first box, which is blue, it just indicates that usually in Western Canada we have the carbon itself at between 60 per cent and 84 per cent. The ash is between 16 per cent and 40 per cent. Incidentally, all our coal in Canada is what we call low rank coal, which means it is high ash and high moisture, as opposed to bituminous coal that is abundant in the U.S., in the eastern sea coast.
Using that in the base case today, burning that coal, we have SOx, NOx and mercury and we have particulate matter. Because of the high moisture in the coal, it has a lower heating value, and because of the lower heating value, you have lower efficiency. Our power plant's thermal efficiency varies between 32 per cent and 36 per cent today, and you have GHG emissions.
What we are proposing is to go to the next step, which is the intermediate cleaning, meaning that as it comes out of the mine, you take it through a cleaning process that reduces the ash to about 8 per cent to 13 per cent and automatically increases the carbon content to between 87 per cent and 92 per cent. This is not a blue-sky technology, it exists; it is commercialized and used all over the world. By doing so, you reduce the SOx and NOx because you are now taking away some of the elements that came with the carbon, such as pyrites and pyrrhotites. Even the mercury is removed at about 50 per cent to 60 per cent. If that is done as prevention, the mercury is lowered and automatically particulate matter is lowered because you are not burning a very high-ash coal but a lower-ash coal. In doing that, you get a higher heating value and higher efficiency, and the GHG emission intensity will automatically be lowered.
In places like Japan and Australia a tremendous amount of research has been done. They have taken a very high-ash coal such as ours and now have produced in the pilot plant an ash-free coal at basically less than 1 per cent ash. We call this an ultra-clean coal; the carbon content is now 99 per cent plus. We are now approaching, from somewhere around 60 per cent to 70 per cent carbon, almost 99 per cent plus carbon. When you do that, you find there is no more sulphur left, no more mercury left, no more selenium left, so there is no SOx and no mercury. There will be some NOx because of the burning tendencies. There is absolutely no particulate matter because you are burning carbon, and it is a high heating value fuel now because you have eliminated all other things and there is high efficiency when you burn it in a boiler. Because of the higher efficiency, you will now get much reduction in the GHG intensity.
In the next slides I will talk about some targeted numbers. Moving on to slide 16, based on the pre-combustion coal cleaning, what is our target? Our target is to actually reduce the GHG intensity and other coal impurities like mercury. How do we do that? We do it step by step. Today, we are doing raw material burning. Tomorrow, we can actually construct intermediate coal cleaning plants. Ironically, we do clean coal in Canada, but all our clean coal is exported. All the clean coal, which is 8 per cent to 12 per cent ash, is going to Japan, and we burn only all the raw coal.
The near-term target is to use the existing technology to clean the coal first before we go into the thing. Now, one may ask about the cost. If you really look at the mining cost of coal, people say $10 to $20 a tonne, but let us put everything on an energy scale. In terms of energy content, $10 to $20 a tonne is 50 cents to 65 cents a gigajoule. That is what the coal provides.
Natural gas is about $5 to $6 a gigajoule on average, so obviously coal is cheaper. However, our logic says do not burn 50 cents to 60 cents a gigajoule coal, but rather spend some money cleaning it up. The cleaning process takes another 50 cents if you want to clean it to intermediate cleaning, so now the value of the coal coming out of the cleaning process is about $1 to $2 a gigajoule, which is still cheaper than natural gas but is also a much better way of burning coal. That is the intermediate process.
In their process, the Japanese are supposed to come out with the first commercial plant by 2016. Then you will find out that your heating value increases by 25 per cent to 30 per cent, and automatically the GHG reductions are about 20 per cent per plant.
The neat thing about that is that it does not require any huge infrastructure change in the existing plants. There are changes of some of the burner construction, et cetera, but basically you are using the existing power plants to convert by cleaning up the feed. By cleaning up the feed, the utilities also gain immensely by reducing their maintenance costs.
What does the pre-combustion coal cleaning involve? I will not go into the details, but there are many steps. There is mechanical separation, which is basically taking the coal, crushing it, and separating the rocks from the coal right at the mine site and sending the clean coal to the combustion places. Then you can also clean it a little further by froth floatation. You can have things that are used by the metallurgical coal industry as we speak because the metallurgical coal industry has tighter specifications for the steel industry. Unfortunately the thermal coal industry has not had any specifications, and we have to change that picture a little bit. Once you tighten the specifications then we can do those things.
There is also the application of high temperature and pressure to remove the moisture.
These are the three major basic things we can do to the raw coal.
Interestingly, in relation to the ash-free coal, the Japanese have now come up with a new solution. Mitsubishi has a new turbine, a 2-megawatt turbine, which has been piloted. They are going with a 50- to 100-megawatt turbine in the next two years. You can take the ultra-clean coal and burn it straight into the turbine. Just like you can take natural gas and burn it straight into the turbine, you can take the coal, because there is no more ash that can cause maintenance problems for the turbine blades. If you do that, the combined cycle of coal and steam turbine will improve the efficiency of the plants to 53 per cent.
As Mr. McCaughan indicated, when Sherritt started to look at pre-combustion coal cleaning, we did a lot of work in little labs and came up with the idea that we should do something better. With the help of the Alberta government — and at that time the Alberta Energy Research Institute — we built a pilot plant that can now produce kilograms of ash- free coal and moisture-free coal, from all the Western Canadian coals. This pilot plant was started in 2009, and I might add that it is the only thermal coal centre in Canada right now. We are very excited about this, and we would like to come back some day with a demonstration facility where you can use clean coal for combustion.
In terms of combustion efficiency, it is important to note that as you improve the efficiency of the existing plants, you will decrease the CO2 emission intensity. There are a number of technologies. There is powder coal, which is the base. We can go to supercritical. SCPC stands for "supercritical,'' and USCPC is ultra-supercritical plants. Of course, you have heard about gasification, IGCC.
Another technology that is evolving throughout the world is in situ coal gasification, where, without digging the coal out, you burn the coal underground, clean the gas and you can produce electricity. Russia is the leader these days, and China, India and Europe are investing a tremendous amount of money in gasification.
The last one is poly-generation. We have to understand that we actually look at coal as a fuel. In many parts of the world, coal is not just a fuel. Coal is the beginning of the production of many chemicals, which could be fertilizers, methanol, synthetic fuels. By doing this, you are taking the carbon and converting it into a useful chemical. Rather than just converting it to CO2 and putting it in the atmosphere, you can convert it into urea, lock it up, and then use it in the agriculture industry.
The next chart, 19, is from the coal institute of Japan. It clearly shows the baseline. The current technology is again powder coal. With a high-efficiency heating value coal, the best you can get is 38 per cent net efficiency, which translates to a baseline load of 100 per cent of CO2 emission rate. By going to a supercritical plant, you are increasing efficiency by 2 per cent. However, you can see that by doing so, the same plant can now reduce 5 per cent of the GHG intensity.
You can achieve the same thing by intermediate coal cleaning. You do not have to go to a supercritical plant. You can just clean the coal. You will get the same efficiency improvement, and you can reduce the GHG intensity.
The next step is to go to either ultra-supercritical, or now the Japanese have commercialized pressurized fluidized- bed combustion, PFBC, which is 42 per cent efficiency, and they reduce the GHG intensity by 10 per cent per plant.
With developing technologies, such as IGCC, you can see that the efficiency can go as high as 46 per cent. That means they can reduce the intensity by 17 per cent. As I mentioned, by taking the ultra-clean coal and burning it in a turbine, you can go up to 53 per cent efficiency. That has been proven on a pilot scale now. That means each plant can reduce the intensity of GHG or CO2 by 35 per cent.
Now I will talk briefly about post-combustion, which is what you do after combustion. Of course, we are dealing with scrubbers today to remove the SOx and NOx. The technology does exist. As Mr. McCaughan mentioned, we have mercury removal using activated carbon, which Sherritt is producing in Saskatchewan. This captures up to 90 per cent of the mercury emissions. Carbon capture and storage is a key technology for mitigating all CO2. It has the enhanced oil recovery, EOR, potential, and it has been piloted in many parts of the world. Some commercial plants do exist, but we still have to do the entire loop; in other words, doing the IGCC, transporting the CO2, and actually producing EOR does not exist in one place today.
Mr. Wright: We have been strong supporters of the requirement for an energy mix. I think all of you around this table would agree that it is a bit like putting your RRSP in one stock and hoping to hit a home run, because if you do not, you have a problem. We believe that coal should be part of the mix. It will clearly be part of the mix around the globe if those projections are accurate.
One thing we can say about coal is that it is reliable. Coal is also secure, which is becoming more important geopolitically. Coal is also low-cost. As Mr. McCaughan said, we have 200 billion tonnes, and I am told we could have significantly more than that if we decided to find it.
To go forward, we need a clear policy that would facilitate investment in coal, which includes fiscal policy for technology investment and obviously some clear direction on what will happen with the price of carbon and that type of thing.
Industry — ours or any other — likes certainty. We are investing money, as you have heard. We are not the only ones investing. Clearly, billions of dollars are being invested around the globe. Technology investments will drive the solution, and we need to realize that.
The last point I would like to make is that in trying to develop an energy strategy — and I have been a strong proponent of this for a long time — we need to take a look at all energy sources in an objective way. We need to look at the good, the bad, the ugly, the social, the environmental and the economic. There is not an energy source out there that does not have issues. There can be a variety of reasons for those issues. If you are going to do it, you have to find a way to look at it.
We all bring our own biases to the table. I read some of the transcripts, and some of the comments that were made are quite interesting. However, I think that if you are going to do this properly, you have to look at it as objectively as you can so that you can make an informed decision. I encourage anyone who will listen that we should go in that direction.
I am not sure we have done that. Even some of the energy strategy with the EPIC process is very oil and gas focused. If you look at natural gas, as an example, you have to look at a full life cycle. Coal produces about 90 per cent of its emissions at the burner tip, and gas is about 60 per cent. However, if you go right back to the full life cycle of this, the numbers are quite different.
We spoke about shale gas. A study done out of Cornell University, in which a Calgary professor was involved, looked at the emissions profile of shale gas. I am not opposed to it. I think we need it all. However, you have to look at that, too, if you are to make an informed decision.
Thank you for allowing us to come and speak to you. We would be happy to answer your questions.
The Chair: I thought you did a great job in the limited time you had of giving us a fairly comprehensive look at your issues.
I want to ask one question that arises from your last comment, Mr. Wright. Clearly, you have been following what our committee has been doing. You have referred to the transcripts. Of course, we are trying to look at each of the sources of energy, and we have already said that there has to be a mix of all sources. Do you think we are on the right track, or is there something we are not doing right, from your perspective?
Mr. Wright: I am suggesting that when you look at this, you have to objectively look at all those things. I am not trying to criticize natural gas. I think we are fortunate in that we have good assets there. However, we talk about this and say that we have to move off coal. I have read some of the comments and questions from senators about natural gas saving the planet and so on. The reality is that if you look at natural gas and go right back to the methane emissions in particular and add it all together, it is not exactly as it appears. If you are going to make an informed decision, you have to look at all of those things.
Coal has issues; we understand that. We are trying to address those issues, but to throw it out because you say natural gas is better, or if you say we should do more wind, if you want to look at the Alberta Electric System Operator, AESO, you can see a current supply and demand, what is going on as you speak, and it will change as you watch. It will show you coal, hydro, gas, wind and others. There are 777 megawatts of wind represented on the AESO, and I printed a couple of copies. One day recently it was producing 661 megawatts, and the next day or two days later it was down to 1 megawatt. In other words, if you are going to look at it, look at it as objectively as possible. I must confess maybe in our industries we are not quite as objective as we might be.
The Chair: That is helpful. We have noted that, and we try to make allowances. Of course, we heard this morning that the nuclear industry is clean and green, that there is no risk at all and why do we not have it everywhere; and coal is equally clean and green as powdered down. In any event, we are trying to be objective and trying to discount the natural biases, but we would welcome input as we go forward with this study, as we will after the election, because it is clear that we will need all the sources and will need to have a constructive mix that is more efficient, cleaner and more sustainable.
All of us are working hard at this, and if we are on the wrong track, just feel free because we are very open-minded. I think you can see that.
Mr. Wright: Absolutely, and I commend you for doing it. Everyone is trying to look at it, but at the end of the day we are looking for a solution going out 50 years. We are not looking at it for 3 years, the typical political window. We want to ensure that everything is on the table. I commend you for that, and I am not being critical of any other energy source because I think we need it all. Everything has its advantages. British Columbia uses hydro, which makes absolute sense. Why would it not use that?
Our hearts are in the right place. It is a matter of whether we are looking at every angle of it that we need to look at.
The Chair: I was interested in one of your comments, Mr. McCaughan, that the coal is not as geopolitically oriented as some of the others. It is amazing that, in the great order of things, we are hearing all about a nuclear renaissance and this tragedy in Japan happens. We are hearing about the advances in coal and suddenly there are terrible mining disasters. It is just what you are saying. It is amazing how the great scheme of things works.
Senator Mitchell: I have a general and a specific question. It was a powerful presentation. You do address climate change, but the question I have concerns the intensity with which you are addressing it. Everyone talks about the important economic benefits of their energy and the variety and diversity that it brings and the need for all of that, and how important it is for economies, but if we do not get greenhouse gases and climate change under control, all the economic benefits of this energy will be outweighed by the economic detriment from greenhouse gases and climate change.
Is your industry absolutely on the record saying that it accepts that climate change is occurring and that it is caused by greenhouse gases like those emitted by burning coal?
Second, you have targets but how intensely are you pursuing them? Have you dates when you will get this done, when you will get greenhouse gases down to a certain level and maybe to all but nothing? Who is managing that in your industry? Who is driving it? Are you saying to the government, "Give us this price. We need it now. We have to get going''? Are you trying to skate it by saying we are doing stuff about greenhouse gas and clean coal? I am being a little cynical in this, but I am driving for an answer because there is a problem. We hear industry after industry say, "We are great. We have to do this. We need it for the economy.'' I am saying all the economic benefit you bring could be wiped out by climate change.
Mr. Wright: We recognize that we need to address this issue. Obviously, you have two sides. The majority of emissions that are produced are produced at the consumption end and not at the mining side of it. I am not saying the mining side is perfect, because we are dealing with issues there. We are trying to use biofuels. We are trying to reduce our emissions when we wash coal. We are trying to deal with the whole range of those things.
Canada basically has two large producers of coal. You have Sherritt on the thermal side and Teck on the metallurgical side. There are many smaller companies in there as well. That is the reason on the thermal side that Sherritt is so actively engaged with the Canadian Clean Power Coalition. They are looking at the various technologies; that is the reason Sherritt is involved. The Electric Power Research Institute, EPRI, is involved. It is a respectable organization in the United States.
To give you a date, they are talking about making carbon capture commercial probably within the next decade, but in effect Sherritt is saying that we are not sitting still. We are working on all these other things. As they also mentioned, there are technologies available today. In Ontario, they are shutting down their coal-fired plants. Several years ago we had a group over from Europe. As you know, everyone looks at Europe as the model. They say they are going more renewable. The reality is that in Denmark, for instance, 39 per cent of the power still comes from coal. They also pay about 30 cents a kilowatt for their power.
When they came over, they were surprised that the units at Nanticoke and Lambton — Nanticoke being almost 4,000 megawatts, which is probably the largest plant in North America — were not all scrubbed, whereas in Europe they have to be scrubbed. The question now is where do we go and the timing. Maybe Mr. McCaughan or Mr. Amarnath can give you a better handle on timing. It is a challenge to say it will be done a week Thursday because it just does not work that way.
Senator Mitchell: In Japan, there is a nuclear disaster; they will fix it tomorrow. I am saying somewhere between that and forever and talking. We have to get some intensity.
The government has said that by 2017 there is some kind of deadline on coal-fired plants. Now that we are not going to do cap and trade, you point to price; we are going to regulate. Are government officials sitting down with the Sherritts and coal-fired electrical plant companies right now and saying these are the figures of emissions; this is what we expect the utility to do; this is when you will have to get it done by? Are we getting down to that, and are people signing agreement, contracts and memoranda of understanding with a government regulatory regime to do that, or are they just talking about it, too?
Mr. McCaughan: How the government is interacting now with the industry is primarily with the utility industry that is actually consuming the coal, and talking about new policy regarding emissions from coal with respect to greenhouse gases. We hear that 2011 is a target for coming out with some certainty, and I think this goes back to Mr. Wright's point regarding certainty on carbon regulations. It needs to happen as the coal industry and the utility industry that is looking to invest in clean coal technologies need certainty around what the regulations will be, what the liability is with respect to CO2 storage. Many issues must become clean and concise with long lead times for industry to adapt to.
Going back to your other question, Senator Mitchell, timing is a very valid question. As a publicly traded company, we are investing a lot of money in clean coal technology. We get asked the same questions from investors: When will this happening? What are we doing about it? I think we are proud that we are a leader in Canada on clean coal technology. We have been doing it since 2003 or 2004. We were probably one of the first to invest heavily in coal gasification, and we continue to do so with this clean coal centre that we have just built. Timing is important. We are trying to move as quickly as possible.
Senator Mitchell: Go faster.
Senator Banks: I will pursue the same line of questioning Senator Mitchell did. The reason I am asking you the question again is because Mr. Amarnath said the technologies to do refining before you burn it are not blue sky. They exist now, you said — I am talking about advanced cleaning. Then you also said, Mr. Amarnath, once you tighten the specifications, we can do better cleaning.
Is it that the industry is waiting to be told where the mark is and then will meet it? I know that industries need to know; they like certainty. If we do not know what the target is, how can we get there, and how can we know how much we have to spend to get there, or to go beyond it if we want to be munificent?
I will ask Senator Mitchell's question again: What is the timeline? When are you doing this? Will you wait until somebody tells you that you have to do it, or will you do it to make your product more palatable?
Mr. Amarnath: Can I take this question?
Mr. McCaughan: You can start, absolutely.
Mr. Amarnath: One challenge Canada faces is that our industry is not vertically integrated. We have coal miners and we have utilities. As coal miners, for a long time we prided ourselves on getting the coal out efficiently without many accidents. Most of our coal mines are open pit mines. That is one reason Canada is proud we do not have any big accidents, at least in the West. We are proud to say that at Sherritt safety is an important thing we pay attention to.
Having said that, where do you draw the line? I think we said give us a spec. In other words, there are two ways to address the problem. The government can say, "Thou shalt have only so much SOx, so much NOx, so much particulates and mercury,'' and allow the industry to do that.
The utilities then come and say, "If you want to address it, the first inclination is why not just generate these things first and then clean them up later?'' As miners, we are saying there is another alternative. You have to clean it ahead of time. You give us specs — how much sulphur, mercury or whatever it — and we will strive to meet them. However, the feed cost will be more than just digging the coal and giving it to you. That is where the problem is.
Right now, they would like to consider the coal as cheap as they want to get it and then clean everything later on. This is the precise reason we joined CCPC, so that we could be part of the utilities, our customers, to work with them to say there is an alternative. As we speak now, we have an excellent committee set up within CCPC, where the feed is paid a lot of attention. It is easier to clean the coal ahead of time, and much cheaper than doing anything else. That has been happening.
As for a timeline, I hope that in the next four or five years an intermediate cleaning will be the thing. We can build the intermediate cleaning plants ahead of every commercial power plant.
Senator Banks: Your customer is the utility. Is it in their interest, and do they see it as being in their interest, to do what you just said?
Mr. Amarnath: Yes.
Senator Banks: A minute ago you said what they are saying is never mind all that stuff; we will clean it later at the top of the stack.
Mr. Amarnath: I am saying that in the past, it was the attitude that let us not worry about the feed. Having now worked with them in the last five years, we are able to impress upon them that the cheaper alternative is to take the feed and clean it. That is what every other industry does. If you do it at the mine site, it is cheaper to get rid of all these elements.
We have a big study going with the utilities on the benefits of cleaning the coal ahead of the combustion. Hopefully that report will be done in a year and that as a result of it we will see some changes in the pre-combustion cleaning.
Mr. McCaughan: Regarding the CCPC, all the utilities are members of it; we are the only coal mining company that works with utilities. They commissioned us to do this coal beneficiation study, which is the second study we are doing. We are working with EPRI on this study as well. That does show some working with utilities on this issue.
Senator Neufeld: Mr. Wright, I have known you for a long time, and you are a great advocate for the coal industry. Thank you for coming and reminding us that we need to look at everything. I continue to say that.
I do not really have a question because I agree with the things you are doing. I applaud you for the things you are doing because there are places that only have one source, maybe, and that might be coal. That is the question I asked the other gentlemen: What does Japan do?
I am a firm believer that there is no silver bullet, but there are a whole bunch of parts to it that we need to do. I think the chairman would agree with me. That is where we want to get to. We will not be here saying this is unacceptable and that is; we have to look at all aspects of it.
Senator Lang: I appreciate your observations about all sources of energy and that they are all in the mix. The concern I have, briefly, is this: Whether it be the oil industry with the oil sands or natural gas with the fracturing — which Senator Neufeld referred to with the other witnesses earlier — or nuclear or any source of energy, the message that seems to permeate the public is all the negatives.
We know that we need energy. We know that industry — your industry, the oil and gas industry, the nuclear industry — are all working toward a more reasonable way of presenting and providing that source of energy.
What are your plans to inform the public about what you are doing? All I hear as a consumer is about dirty coal. My vision, when I see it on TV, is that coal disaster in Pakistan, which is third world and obviously not the way we do it here. What are you doing in working with the other industries to get a concentrated, educational, public relations program together so that Canadians are informed of what you are doing, how you are doing and how you are providing your energy source?
Mr. Wright: As an association — I will let Mr. McCaughan talk about that as well, and Tim Boston from Capital Power has also joined us — it is a three-pronged approach. We are shifting our focus at the association to spend more time dealing with the communications side of things.
Trying to get out to as broad an audience as possible is a challenge. You have to be a little more focused. There are two ways to do it. Obviously, at the political level, being here is one of those things. The other side is in the schools. We are trying to get on the curriculum, when they take a look at resource modules and energy, to ensure they get a balanced perspective.
In the past, that has not been the case. It is interesting; we are part of an energy literacy group in Alberta; it has a broad base, not just coal but all things. I was not at the meeting in which this happened, but I heard later that a teacher got up and apologized; he said, "I have been misinforming my students for 26 years because I did not understand the reality of energy.''
If you look at oil and gas, if all of a sudden we did an ad and the things that happen from an energy perspective started disappearing from this room, there would not be much left. Fortunately I am not wearing my polyester suit, so I would still have clothes on, but you understand the idea.
Those are some of the things we are trying to do. We are a small organization, so it is a challenge. We are working together. I know that for the EPIC group, a key thing is communication and how we deliver messages, and so on. I know Capital Power is actively engaged in trying to get people to understand the role they play. It is a hard sell. There is no question about that.
Mr. McCaughan: If I can add to Mr. Wright's comments, we recognize that the message is not getting out there. Through the CCPC, we are completely redoing the website as a tool of communication. We are putting out the results of the reports and the studies we have done so that the public can gain access to this information freely on the website. I think doing that is a tremendous achievement.
It is clear that the messages around all the work that Sherritt has done are not getting out there. We need to do a better job of finding a way to communicate that.
Mr. Wright: It is a challenge. The old theory "if you build it, they will come'' does not always work. We have just redone our website. We have more information and data on the industry and what is happening. We will have a more robust section on technology and what is happening there and another section on reclamation.
Most people think we do not care. However, the fact is that the two largest companies have been reclaiming mine sites for over 40 years, long before they were required to do so. They have done an incredible job of it. People do not understand or know that. You are right: They think of the negatives.
The Chair: Senator Peterson will have the final word, as we are short on time.
Senator Peterson: You are doing a lot of work on clean coal technology and are to be applauded for that. It is hard to put an end date on it, but where do you think you are in that process? Would you say you are halfway there or three quarters of the way there?
Mr. McCaughan: Good question. We are doing it, and we have been investing in this technology since about 2004. It has taken different stages with tremendous stages of learning.
We went very heavily into coal gasification and developing a commercial project in Alberta in the 2004-06 period, where we were very close to bringing a commercial coal-gasification project that would capture all the carbon in Alberta. We went through feasibility studies, and after millions of dollars invested in this, we found out the technology is more expensive than anticipated right now. We need some certainty on the carbon regulation side with respect to storage.
We have had to take a multi-pronged viewpoint in terms of investing in clean coal technology, and not just in coal gasification but also in coal beneficiation. On the immediate cleaning side, we hope in the next five years we will see some results coming out of the facility we are building.
The Chair: Gentlemen, thank you for understanding our time constraints. This town turns into quite a zoo during the final gasps of a Parliament.
I am sure we will want to come back to you as we try to make our own balanced assessment of how the mix should look. We thank you for suggesting you come regarding coal; we had not forgotten about you. We have heard a great deal about coal indirectly and how important your industry is. We will go on our break now with a greater knowledge than we had before. We will look forward to talking with you in the future. Many thanks.
With that, colleagues, I will terminate the meeting. Thank you all.
(The committee adjourned.)