Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 9 - Evidence, November 16, 2016
OTTAWA, Wednesday, November 16, 2016
The Standing Senate Committee on Transport and Communications met this day at 6:45 p.m. to continue its study on the development of a strategy to facilitate the transport of crude oil to eastern Canadian refineries and to ports on the East and West coasts of Canada.
[Translation]
Victor Senna, Acting Clerk of the Committee: Honourable senators, I see a quorum. As clerk of the committee, it is my duty to preside over the election of a chair.
I am ready to receive motions to that effect.
[English]
Senator Eggleton: In the absence of the deputy chair, I nominate Senator Mercer for chair.
Mr. Senna: Are there any other nominations?
It is moved by the Honourable Senator Eggleton that the Honourable Senator Mercer do take the chair of this committee.
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
Mr. Senna: I declare the motion carried. I invite the Honourable Senator Mercer to take the chair.
Senator Eggleton: Well done.
Senator Doyle: You should be Speaker of the house.
Senator Terry M. Mercer (Acting Chair) in the chair.
The Acting Chair: Thank you, ladies and gentlemen, for that very strong vote of confidence. Democracy is alive and well.
This evening, the committee is continuing its study on the development of a strategy to facilitate the transport of crude oil to Eastern Canadian refineries and to ports on the East and West Coasts of Canada.
I would like to welcome our first witnesses. Gaétan Caron is Executive Fellow with the School of Public Policy at the University of Calgary. He was Chair and CEO of the National Energy Board of Canada from 2007 to 2014 and has chaired regional public hearings evaluating pipeline projects and offshore exploration of oil and gas.
We also have with us Dave Core, President and Chief Executive Officer of the Canadian Association of Energy and Pipeline Landowner Associations. He is joining us by video conference. His organization represents directly affected landowner groups in negotiations for business agreements with pipeline and power line companies across Canada.
Each of the witnesses has been asked to make a five-minute opening statement. I would like to invite Mr. Caron to begin his presentation, which will be followed by Mr. Core's. Afterwards, senators will have questions.
[Translation]
Gaétan Caron, Executive Fellow, School of Public Policy, University of Calgary, as an individual: Mr. Chair, thank you very much for this opportunity to speak with you on the transport of crude oil. My key observation this evening is that oil will flow to markets if we let our public institutions to their work. I believe that we have the right institutions to do that. The fundamentals are already there.
[English]
In response to your specific questions: One, how can the federal government help to facilitate social licence for crude oil transportation? I believe that the phrase "social licence" is very unhelpful and is being used at cross purposes by different people with different goals. I recommend going back to the term "public interest." Public interest presumes that there is a greater good to be achieved by taking some actions, acknowledging that some people will be inconvenienced by such actions or very opposed to them and very vocal about their opposition.
Question number two: how to improve public confidence in the pipeline review process.
I see three main factors causing erosion to public confidence in the process. First, NEB hearings have been the primary choice for people that are unsatisfied with the progress on climate change to try and express their views. The NEB has provided its own reasons based on its analysis of the evidence on why it would not address upstream and downstream GHG emissions in their review of specific pipeline projects. This has resulted in frustration on the part of those seeking to make progress on this broad policy question.
The second reason: In Bill C-38, Parliament has asked the NEB to change its hearing process. It has imposed time limits. It has specified that the NEB must focus its hearing time on directly affected persons. The NEB has faithfully implemented the wishes of Parliament in Bill C-38, and it has been unfairly criticized for doing so.
The third reason: NEB processes have been, in my view, unduly politicized. Parties from all sides have criticized the NEB without much if any specifics as to what mistakes the NEB has made in implementing its mandate, except in a few cases where corrective action was promptly taken by the NEB itself.
In view of these three reasons, improving public confidence in the regulatory process would come from three matching actions.
Number one: improved public policy debates on climate change. This has been done with the current government taking a leadership position in Paris and the subsequent collaboration initiated with provinces and territories.
Second, amendments to the National Energy Board Act go back to Bill C-38 provisions, if necessary, or other legislative provisions. The recent appointment of panels to review the regulatory process will do exactly that.
Three, depoliticizing the public dialogue around regulatory systems — a more difficult task, I grant you. The federal political process on pipelines is meant to begin with the receipt of a final report from the NEB. It is at that time that the merits of the project and broader policy questions such as climate change are to be discussed.
Your third question: how to facilitate the involvement of indigenous peoples in decisions related to crude oil transport. In my view, the key is to implement well known but sometimes very poorly implemented best practices. The School of Public Policy is currently doing some broad research to better document and communicate these practices. To name only a few, number one, early and frequent engagement of indigenous peoples; number two, provision of resources for the assessment of proposals; and, three, alignment of economic interests through equity positions in a project such as was done in the Mackenzie Gas Project.
Your fourth question of five: If a national strategy is needed, what are the key elements? I have six quick points for you.
Number one is to continue relying on fundamental market forces. The private sector knows best when and where to invest in energy projects.
Number two: regulate these market forces by appropriate and predictable policies and regulatory frameworks, which in my view in large measure you have already, subject to improvements.
Three: Go back to basic notions of public interest rather than fall in the "social licence" trap.
Four: Depoliticize the regulatory process.
Five: Recognize the primary role of provinces in the development of natural resources.
Six: Recognize the international dimensions. As we move towards achieving the 2 degree Celsius goal reaffirmed in Paris last December for the world, the world will still need growing amounts of hydrocarbons until 2014 and beyond. It is a reality. It's a long transition to succeed on climate change. There is no country better qualified than Canada to help meet that need in responsible ways, thanks to our values, our regulatory systems, our democratic processes and the transparency in which they operate, and freedom of the press, the rule of law and our enviable safety and environmental record.
Your last question: how to broadly share the risk and benefits of crude oil transportation among Canadian regions and with Canada's indigenous peoples.
One: Recognize that it is in the very nature of linear infrastructure to have an uneven distribution of benefits and burdens. The benefits are typically national or regional and burdens are mostly local. We just can't help it.
Two: Deal with the unevenness of benefits through the tax system and equalization.
Three: Deal with local burdens through design, operational practices, mitigation and compensation.
Four: In the case of indigenous peoples, share the benefits again through their equity interest in the project, as was done with the Mackenzie Gas Project.
Those are my preliminary remarks, honourable senators.
The Acting Chair: Thank you, Mr. Caron.
Mr. Core, you have the floor.
Dave Core, President and Chief Executive Officer, Canadian Association of Energy and Pipeline Landowner Associations: Good evening, honourable senators. I'd like to begin by thanking you for the invitation to speak to you today about this very controversial subject — pipelines. I'm not going to take the time to introduce my organization again. Someone has already done that.
Moving on to the subject at hand, first we need to define "social licence," a term that has no standing in law or in our liberal democratic tradition in Canada. If by "social licence" you mean broad popular support, how do we measure and authenticate it?
Of course, it is always a good idea for large industrial developments and the companies and their partners behind them to win broad public support, but we already have a well-established tradition of public relations, and the companies and their partners, like landowners, can win the public over without government intervention.
If by "social licence" you mean some sort of measurable political support, then I would argue that we need the exact opposite. Pipelines have become too politicized and we need to depoliticize them.
If by "licence" you mean permission, the only permission urgent energy transport projects need comes from those whose land pipelines would cross. This permission is part of property rights. When property rights are respected, the directly affected farmers, ranchers and other landowners and perhaps their neighbours and surrounding communities directly affected are more than capable of negotiating what we at CAEPLA would call win-win business agreements that protect our families, our homes, our businesses, our safety and our environmental stewardship responsibilities.
If the government wants to help win social licence for pipeline projects, it can begin by protecting property rights and helping depoliticize the process. Ultimately, social licence is a political construct, and we need to depoliticize pipelines.
If government wants to help win social licence in terms of facilitating public approval for important energy projects, they can do so by educating the public about the agreements landowners have reached with industry to ensure safety and environmental standards.
If the public learned about these agreements and the fact that they are backed by people who, with their families, live and work with pipelines in their backyards 24/7, 365 days of the year, tremendous peace of mind could be created.
This will go a long way to increasing public confidence in pipeline review processes. Pipeline companies have often referred to pipeline landowners as their first line of defence. In a very real sense, we are also the public's first line of defence. Nobody has a greater stake in safety, soil and water quality and energy abundance than rural agricultural communities.
If landowners' property rights are restricted, which means government not intervening to expropriate during negotiations, we can very quickly reach agreements that will provide the public with the peace of mind I am talking about.
Pipeline safety and environmental friendliness comes from the front line, the grassroots. It cannot come from top down, from government, who all too often are in political conflicts and conflicts of interest in terms of being an expropriator as well as having a financial interest in projects in terms of tax revenues.
I'd like to point out that real solutions for environmental challenges come from the grassroots and are not handed down from on high. A good example is a young woman you'll be hearing from shortly, Kelcie Miller-Anderson. We were very happy to feature her in the last edition of our national quarterly magazine, the Pipeline Observer. Kelcie and her company MycoRemedy are proof that science and entrepreneurialism are keys to innovating when it comes to the environment. We had tremendous response to that story from landowners.
Industry has come a long way in terms of safety and environmental technology. Landowners are the best judge of what works best on the ground. So we say government, and in particular the National Energy Board, needs to get out of the way and let agreements be reached through a grassroots process that will have the confidence of the public and provide the public with the peace of mind that comes from knowing the very best standards for safety and environment are being guaranteed by those who have the most at stake — again, pipeline landowners who live and work with energy infrastructure every day.
I do not claim any special insight into First Nations communities and don't pretend to advocate on their behalf, but I have had occasion over the decades to speak to many First Nations and Metis individuals. I can tell you that almost every one of them wants what we want: individual property rights and an opportunity to participate in economic development like energy transport projects, and to be respected.
We don't think First Nations people are much different from any other Canadians. They care about the environment and safety, but they also care about economic opportunity. The only way they are different is that they have even fewer property rights than most other Canadians and are in greater need of economic opportunity. I think the way to tap into First Nations support for pipelines is to bypass band governments and empower the grassroots of First Nations with individual property rights.
Band governments are roughly equivalent to municipal governments. We don't feel that any band or municipal government should have a veto over national energy development. We also don't feel that any individual, First Nations or otherwise, should have their interests held hostage by politicians and bureaucrats.
Perhaps at the band and municipal levels pipeline approval could be subject to a ballot question to allow the grassroots, First Nations or otherwise, to be heard.
We believe the only national strategy is one that again depoliticizes economic development. We need a national strategy that safeguards property rights and gets regulators out of the way of business negotiations and allows farmers and ranchers and other landowners, the stewards of the land, to achieve agreements that promote safety, environmental integrity and economic prosperity.
Canada was building pipelines long before we were micromanaging them and creating political conflict over them. The national strategy we need should be to liberalize the sector so its participants — companies and landowners — can work together to get pipelines built in a safe and environmentally friendly way. We can have a peaceful process based on cooperation and voluntary agreement.
In conclusion, it is the view at CAEPLA that a status quo has paralyzed the pipeline industry. Regulators never did respect the property rights of landowners, and by permitting the regulatory regime to be hijacked either by industry or today by anti-energy, anti-pipeline activists, property rights are still being denied. When industry cannot build, not only have they lost their property rights, but landowners who wish to supply land for those important projects are again denied their property rights: the right to partner in energy projects.
Thank you.
The Acting Chair: Thank you very much, Mr. Core. We appreciate that.
We will now go to senators for questions, and we'll start with Senator Eggleton, please.
Senator Eggleton: Thank you for your presentations.
Mr. Caron, your years of experience are quite valuable and quite obvious in this document here. There are some good suggestions. I particularly like your suggestion number three with respect to involvement of indigenous people. I think that hits the nail on the head.
You also mention what would help here. The NEB hearings are resulting in many people who want to talk about climate change issues coming there as a way of getting their voices heard. You said there needs to be an alternative mechanism, i.e., a need to get into improved public policy debates on climate change itself. I can understand that.
However, I want to ask you about your comment that the "NEB has provided its own reasons based on its analysis of the evidence why it would not address upstream and downstream GHG emissions in their review of specific pipeline projects." I'm not familiar with that. Could you explain that, please?
Mr. Caron: Thank you, senator. The NEB has a legal obligation to look at pipelines as they are, one pipeline at a time.
I sat on a hearing about the Keystone 1 project, which actually was built. The first segment of Keystone was one of my first hearings at the NEB. Some parties were saying we should look at the upstream, and at the time they said we should look at the downstream of this pipeline being in existence or not, and think of the upstream and downstream production of greenhouse gases.
We looked at the facts, and several panels at the NEB reached the same conclusion based on the facts they were facing. You will find that the Province of Alberta will not change the rate of development of its natural resources whether this particular pipeline is built or not. Consumers in Ontario and Quebec will not change their driving habits or the temperature of their dwellings whether this pipeline is built or not. So the board found that for a pipeline, taken one at a time, the upstream or downstream production of hydrocarbons at the societal level is essentially unchanged. Because of that, those aspects were not relevant in terms of the determination the panel had to make. It's a technical evaluation, but that's their mandate.
Meanwhile, Canadian society was looking for a place to be seen as leaders in climate change, and until recently there was no such thing. "The NEB is in town, and they will have a hearing on a pipeline." It attracted all the people who wanted to be heard, with their broad policy measures on the nation as a whole.
Senator, there was, there has been and there remains a mismatch between the legal obligations of the board to look at pipelines one at a time, and broad policy choices that people like you and members of the House of Commons or the government, depending what branch of government is involved, to make these big and difficult decisions for the nation. The NEB is not the proper place, neither in legal terms because of its "one pipeline at a time" review, nor in terms of legitimacy of decisions for the country on questions of that scale, like what Canada did in Paris last December.
That's the explanation, senator. I hope it's clear.
Senator Eggleton: Yes. Let me follow up on that.
What would you see as the useful role of this committee in its consultations on this issue in view of the fact that specific pipelines are the NEB's responsibility for hearings? We talk a lot about the different pipelines — the east pipeline, the other ones as well — but ultimately it's the NEB that has to deal with this. What could this committee usefully do on this subject?
Mr. Caron: I certainly agree with Mr. Core on the need to depoliticize discussions about pipelines. We came at it from different angles, but we reached the same conclusion — without, by the way, rehearsing our key points before this appearance, senator; I can assure you of that. But there is a place for politics in Canadian society to talk about these things.
Maybe it's a dream I have. As you talk amongst yourselves about parliamentary reform, maybe Senate committees in particular — because you have the ability to go a bit deeper on matters like this — can actually be a privileged means of discussions with Canadians, and perhaps with more Canadians, about things that never started and never finished, such as policy discussions on climate change, on pipeline safety generally in terms of the provinces, the federal level and the territories. In this way, Canadians would feel that there are senators listening to them with sincerity and genuine interest — not to decide who is right and who is wrong, but report back to Canadians what the nation is telling us about great policy choices as input into the legislative process. You do that already, but I would suspect that many Canadians would feel that it's hard to appear before a committee or perhaps there are no technological means to go into an electronic exchange with a Senate committee. I would see your committee and all the others as well to be a place where, as you reform the parliamentary system, you make more Canadians feel they are being listened to, with respect and without judgment.
Senator Black: I have a couple of questions for both witnesses. Thank you both for being here.
Mr. Caron, thank you for your years of service. It's valuable and it has been very effective.
There are a couple of things I would like to clarify with you, Mr. Caron, if I may. You made the point to us that the NEB, being a statutory body, can only do what it is authorized to do by statute and that we, Canadians, are unrealistic and unfair in asking the NEB to do what they cannot do. Correct? That's what you're saying.
Mr. Caron: That's the consequence of what I said, senator, yes.
Senator Black: The government recognizes that. We currently have a process whereby studies are being done on Energy East and Trans Mountain in respect of greenhouse gas emissions, A; and, B, the issue of further consultation. That is the model that is being pursued now. So the NEB is one of three reports that will be bundled and presented to government. What is your view of that as a mechanism going forward?
Mr. Caron: I'll start with the easiest one.
The government, having decided to invest additional resources and meaningfully engage indigenous communities, is absolutely necessary and has been established by the courts for the longest time. Being independent, the NEB cannot be the Crown and say, "We're going to listen to you as a representative of the minister." It would be an error in law for the board to be seen as part of the government, because it is not. So there is always a top-up or additional consultation required of the Crown itself.
In the Northern Gateway case, if you read the case of the Federal Court, much of the consultation during the NEB process — by the industry, by the NEB and by the Crown — was well done, with a critical flaw in phase 4, which was that once the NEB had made its recommendation on how well the government of the day did its post-NEB recommendation consultation, the court found it was flawed and "returned to sender" the decision. That is a really good thing this government is doing by investing in natural resources to implement the laws of the land.
Should committees be struck to assess how to modernize the environmental assessment process and the NEB mandate, as general topics? I would say yes, let's finish that and move on to something else after the recommendation has been made and specific improvements to legislation that you will consider. That will be a good thing, because in terms of uncertainty, it being a political promise to take care of that business, they will take care of it and by the end of March we will have a public report on how to modernize the NEB. Some of those suggestions may be really useful.
Senator Black: I don't want to get those muddled because I'm going to come to that.
The process which is being followed currently on Energy East and Trans Mountain, the three consultations, does that have merit? As Senator Eggleton has suggested, we are looking for ways to be constructive. Given your expertise, is that a constructive approach?
Mr. Caron: Well, at the very least it's not a negative contribution to the public debate. The public expected that. If you have read the Trans Mountain report, it said, yes, we listened to a lot of people and many were upset. Some were so upset that they felt the process was not deep enough; so they found what the NEB found, that you will find people who are opposed.
Senator Black: I understand that.
Mr. Caron: But there are good reasons. I'm not saying this is a bad thing.
My assessment of that, senator, is neutral in that it was an election promise to improve the process. They've had three additional members do the work of the NEB, trying to find out whether there were things not considered by the board, without recommendations at the end, and then the government has until December 19 to make a decision. So no time has been wasted. Because of that, I'm neutral, and positive that it has been done within the time frame.
On Energy East, I don't know, senator. It's an early stage and I don't have a view on that.
Senator Black: As you know, the Government of Canada has appointed a group of five leading Canadians to make recommendations about modernizing the NEB. Have you a comment in respect of that process?
Mr. Caron: What I hope comes out of that, senator, is a definition of the problem. The NEB has been, as I said in my opening remarks, criticized for implementing Bill C-38. The Trans Mountain report from the panel was very clear. The NEB only heard from people who were directly affected. Well, you asked them to do that, so that's not the problem. You cannot blame the NEB for having fulfilled the duties it has under the legislation.
With regard to the problem that the government has said must be cured because of the fact that Canadians have lost confidence in the environmental assessment process, I am still at the problem definition stage. I hope that these panels, as they do their consultation — and they are broad, deep and well-resourced — will come up with the definition of the problem, and from that will flow solutions that I will applaud once I see them. But I'm still at defining the problem, senator.
[Translation]
Senator Boisvenu: Mr. Caron, your brief was very instructive. It proposes some very interesting potential solutions. In my opinion, the current debate is sowing a great deal of confusion, voluntarily or not, between development and transport.
Mr. Caron: Yes.
Senator Boisvenu: The people who challenged the decisions of the National Energy Board came to Nova Scotia, among other places, and presented briefs. However, they never discussed the pipeline. They were talking about oil exploitation.
Mr. Caron: Yes.
Senator Boisvenu: This seems to me like an almost impossible marriage. If we want to debate an economic project like the pipeline and people want to come and talk to us about extracting oil, we are facing two different horizons as concerns the protection of the environment.
Mr. Caron: You are absolutely right. I am concerned by the state of Canadian society. We are very divided on some fundamental issues. We don't want to take other points of view into account. I am among those who hope that we will be able to make progress on climate change. I am ready to pay carbon taxes. I am concerned about the future of my children and grandchildren. I agree with these measures. However, some feel that they are not sufficient, that we have to stop producing oil immediately, that the transition is not necessary, and that we authorize the production of oil in countries that are much less advanced than we are when it comes to protecting the environment, safety and the protection of human rights.
In order to have peace of mind, people tell themselves that to succeed in curbing climate change, we have to stop building pipelines, and provinces have to stop producing hydrocarbons. This issue is in fact a matter of strictly provincial jurisdiction. The Constitution is very clear as regards provincial responsibilities. Quebec produces its own hydroelectric resources, and Alberta, Saskatchewan and British Columbia produce their own energy resources.
You phrased this well in your question: we are engaging in an unhealthy dialogue. We seem to have obtained a social consensus in Paris, with the co-operation of the provinces and territories. The future is promising. However, concerns are again being raised, because the objectives set out in the Paris agreement do not seem to be sufficient. Some would like us to stop the pipeline construction projects immediately, and would like the transition to be entrusted to other countries. I think this is unhealthy, because we are not taking part in human development in Africa, Asia or China.
Senator Boisvenu: These people who are completely opposed to development projects are led to support the pipeline project at some point. We are not talking about a year or two of debate, but about a decade of discussions.
Mr. Caron: Indeed.
Senator Boisvenu: However the need for oil is not measured over a decade, it is a daily need. As for the decline in production and consumption in some countries, we are looking at a five-year horizon. If nothing is done over the next five years, the billions of dollars invested in the West will be seen as money that was thrown away for nothing. There is a strong likelihood that these companies will withdraw, because the message will be clear.
In my opinion, the solution is not to exclude these people from the discussion.
Mr. Caron: I agree with you. Your argument is in the same vein as the question Senator Eggleton put to me. How can we foster a healthy and constructive dialogue in Canada? Whether one agrees or disagrees, the debate continues. People have to want to hear other points of view.
If we manage to reach the 2 degrees Celsius objective pursuant to the Paris agreement, what is the relevance of federal power in terms of interprovincial pipelines? It is strictly nil. In such a scenario, Mr. Core's concerns are an issue, and he is quite right. We are talking about landowners, farmers, producers. People wonder how to ensure that these pipelines are well regulated, and that the impact on farmland is minimal. We are also talking about compensating farmers who will have to deal with the disadvantages of a pipeline. This discussion is interesting. However, it is a federal dialogue on federal pipelines. Under the Constitution, climate change is a provincial matter, but it is accompanied by a federal objective. Mr. Trudeau stated clearly that if the provinces did not do what they were asked to do, there would be a federal standard brought in as a framework over all of it.
In my opinion, our nation is in a good frame of mind to succeed when it comes to curbing climate change. However, we are bogged down in discussions over pipelines, for reasons that are dotted lines and not continuous one. This quagmire is not contributing to the advancement of Canadian society on the social, environmental or economic levels. We are hindering the optimization of quality of life in Canada on these three dimensions of sustainable development.
[English]
Senator Beyak: I'm not a regular member of this committee, but I want to thank you both for a wonderful discussion. Pipelines have been around for decades; they are documented to be the safest method of transportation. We're not going to be flying our military jets or naval ships on anything but fossil fuels for many decades to come, with the best of intentions of looking at other energies. Thanks for the debate, and it's a pleasure to be here.
Senator Raine: I'm also not a regular member, and I do appreciate your expertise and being here.
I'm interested in talking to our other witness, Mr. Core, about the landowners' role in this. I sympathize with what you're going through, because you've got industry on one side, government regulation and the National Energy Board on another, and here you are left out in the cold. Could you expand a little bit on what you think your role should be in a modernized National Energy Board?
Mr. Core: I've been listening to Mr. Caron speak. Our organization has opinions on a number of things he said. We spent a lot of time thinking about them, and over the years we've come to the conclusion that we're the solution here, that by addressing landowner issues, that's the solution. Who does the Canadian public trust more than ranchers and farmers in the rural landscape? Our responsibility is stewardship.
I want to address your question by speaking about the National Energy Board. To be quite honest, we see that they do need to be modernized, that the National Energy Board is the problem and is why we're in the situation we're in today. So I've made some notes here about that.
I want to begin by talking about the National Energy Board. "Social licence" is ill-defined and can mean whatever activists and politicians want it to mean. If we break it down, the social side should refer to broad public support generally, and the only licence that should be issued must come from those directly affected.
Pipeline landowners and those who live along the energy corridor, that's where the licence comes from. We're the ones that live on the pipe, and we're the ones that have to deal with environmental issues and safety issues.
Building support for pipelines should be done by the companies and landowner partners. Landowners have been left out for years, but we now have a very important role. I can give examples of that.
Government could play the role of educator but needs to remove itself from the political conflict and the conflict of interest that arises from expropriation and taxation. Expropriation must end. Expropriation is basically the NEB being in land acquisition — in partnership with pipeline companies that are in land acquisition.
Let's talk about the National Energy Board. In our opinion, it's outdated. It's time to change it. It's been around for 59 years. I can tell you that there have been changes to the National Energy Board from a landowner perspective, but negatively. They continue to put more responsibilities on us.
What I want to say is this: It worked well when it and the pipeline industry were both out of sight and out of mind. They both were up until the last four or five years. They were out of sight and out of mind. People didn't even think about pipelines. They didn't know who the National Energy Board was. The only ones who criticized the National Energy Board previous to the public outcry we have right now were the landowners, but we couldn't get heard because we couldn't bring together enough of the public to support us. The public didn't understand the process. They still don't understand the importance of pipeline safety and the environment. They are just talking about wanting to stop pipelines because of climate change and fossil fuels. So they are not talking about pipeline safety.
The only ones who criticized it were the landowners who had their land effectively stolen because the NEB was and is in the land acquisition business for pipeline companies.
Previous to all this outrage — and we were ahead of the curve on this issue — I stated to a House of Commons committee in 2011 that the NEB was created with three conflicting roles. Its legislation and regulation set it up as a pipeline facilitator by being in the land acquisition business, by having expropriation. Their job was to help get pipelines built. But then it has another conflicting role and it's supposed to be a regulator. So here it's trying to get pipelines built and effectively putting conditions on to get them built, but then it's supposed to regulate the same people that it's doing land acquisition for through expropriation. The third thing it tries to do is be an ombudsman for the very people that they steal the land from. There are these three conflicting roles, and that's why it's in the mess it's in today.
We're not saying there isn't a place for the NEB. We have spent many hours considering this, and we do have a place for them.
Who's the most compromised by these conflicting roles? It is the landowners who live on the pipeline 24/7, the stewards of the land, the individuals who are most concerned for their safety, their environment and their future. The NEB is outdated and the public finally sees what it is.
To rebuild confidence in the approval process for pipelines would involve a new role for the NEB. The NEB has long since lost the confidence of landowners and the public. I can give you many examples from the landowners' perspective. The process should be one of the pipeline industry negotiating directly with their partners, suppliers and landlords, as any other industry would, without government interference and politicization.
Public peace of mind will flow from knowing pipeline landowners and their families live and work with pipe in their backyards 24/7. They are truly their first line of defence and can be counted on to ensure the highest levels of safety and environmental standards are achieved.
To back that up, I provided all of you with a letter. I think it's dated September 30, to Minister Carr. It talks about Line 3 replacement and our support for that.
You asked Mr. Caron to respond to the three consultations. This additional consultation undermined the landowners and our safety. You will read in that letter, if you take the time after this meeting, that we spent two and a half years negotiating issues with Enbridge on that line. We are even doing research with Enbridge now on decommissioning and abandonment. We created a settlement agreement that sets standards on environmental and safety issues higher than the NEB has ever considered. We have been doing this for years. Every negotiated settlement we do, we get the standards set higher than the CSA standards for depth of cover and standards that the National Energy Board had. We're the ones setting the bar on pipeline safety, not the National Energy Board. It's been CAEPLA, the landowners' organization, who have done it. We did it on Line 3. Our landowners want that pipe replaced.
What did the government do? After the NEB considered our evidence and said that this is a safe project, the government formed another process where everybody in the country can take part and give their opinion as to whether this pipeline replacement project should go forward. We've done the work to back up that it should be, and our landowners that we represented wanted that done.
I'm sorry to take so much time, but I know that I have to get these comments in. Thank you.
Senator Black: Mr. Core, thanks very much. I appreciate the information you have shared with us today.
I want to understand succinctly what it is you would have us accept. You have said to us that there is no role, or at best a very limited role, for the NEB to play in respect of pipeline approvals. Yes or no?
Mr. Core: I don't think I said that. We have been discussing with the NEB directly about our theory. We're saying there's a new role for the NEB. Take the NEB's role out of landowner issues. The fact that they can expropriate and take our land and we can't sit down on a level playing field and negotiate our safety and environmental concerns reduces the safety and environmental standards of pipelines.
We are saying that landowners should be taken out of the act so that we can negotiate in a free market system with the pipeline companies and get high standards set. The NEB's role should change from being in the land acquisition business to strictly dealing with public concerns, et cetera.
Senator Black: Very well, thank you. I understand what you're saying. Thank you for that clarification.
Based on that, if Enbridge wishes to build a small pipeline from Canmore, Alberta to Calgary, Alberta, or to Estevan, Saskatchewan, crossing a border or two, your view is that Enbridge would need to negotiate with each individual landowner along their proposed route without reference to any arbitrator. That would be your view; is that not accurate?
Mr. Core: Yes, it is.
Senator Black: What happens if I just don't want to deal with Enbridge? How does that pipeline ever get built?
Mr. Core: That is an excellent question. I spoke to a Senate committee in 2013, and that question was asked of me at that same presentation.
Actually, I've got a response to that here. With the state-of-the-art technology industry has developed now, they are able to do incredible things in terms of going around those that refuse to do a deal.
Companies are also able to use land assembly strategies that give them a lot of flexibility on routing: for instance, buying options or some parcels.
We also believe that with a level playing field, groups like CAEPLA are able to bargain collectively and broker win-win business agreements that work for industry, that address landowners' legitimate concerns about safety, environmental stewardship, liability and operational issues, as well as compensation.
We also believe that to address the question of what —
Senator Black: Not to be rude, sir, but we have your point. Therefore, we agree that if you're building a pipeline and I object, you're suggesting that that needs to snake around my land and on we go. You would agree with me that that will increase the price of pipelines, will increase the price of tolls and will therefore increase the price to consumers. Would you agree with that? I'm just checking how far your analysis has gone.
Mr. Core: I would not tend to necessarily agree with you on that because, number one, what you're doing is respecting that individual's property rights.
Number two, they may have to pay an exceedingly high cost to address that man's issues if he needs it buried extra deep. I can tell you that just by having to drill a pipeline, you can increase the cost of that pipeline greatly.
I can give an example where the National Energy Board approved —
Senator Black: That's fine. Thank you, sir. We have your point.
[Translation]
Senator Boisvenu: My question is for Mr. Core. Did you know that your organization is mentioned on a website called Stop l'oléoduc — stop the pipeline — whose mission is to block all of the work related to the pipeline?
[English]
Mr. Cole: I don't know that.
[Translation]
Senator Boisvenu: I would ask you to verify that information. The website seems to suggest that your organization is a member of the Stop l'oléoduc movement, whose objective is to block work on the pipeline.
If that is the case, I wonder what your credibility rests on. On the one hand, it seems that you are a member of the Stop l'oléoduc movement, and on the other hand, you come here today to defend the rights of owners in the context of the construction of the pipeline. I am having trouble understanding your position on this issue.
[English]
Mr. Core: They must be making a claim. We're pro-pipeline, pro-oil and gas. We've never been involved with that organization, so I don't know how they make that claim. We've never made that claim.
The Acting Chair: Mr. Core, you talked about negotiating a deal with each landowner as the pipeline goes on. I think that that's a fundamental that should happen anyway. That's just my opinion.
However, if that happens and something goes wrong, whatever goes wrong doesn't necessarily stay on the land for which negotiations have taken place, which means that becomes a matter of public interest and of the interest of the neighbours of the person who may have signed a deal for the pipeline. How do you deal with that?
Mr. Core: That's another very good question because that is one of our major concerns. We haven't been able to negotiate agreements because the National Energy Board steps in and says everything is in the public interest. We want to negotiate contracts that are held up in a court of law. When something like that happens, in a lot of provinces we have third party liability. If contamination goes on to another person's property, the landowner ultimately is responsible.
The thing with pipelines and power corridors is that it's an easement agreement and our name stays on title, so ultimately it's the landowner that's responsible for whatever happens.
The new act, the Pipeline Safety Act that recently came out, has helped to address some of our issues on pipeline abandonment and the future liabilities that go to our neighbours. But the very subject you bring up is one of the most important issues we've been trying to address by doing individual negotiations and negotiating for a group of landowners. We've never been able to get totally indemnified on things within our contracts because we have no rights or remedy outside the National Energy Board Act. So that overrules our right to go to court on a lot of issues. You're bringing up a very important subject, and that's one of the things we're trying to address by negotiating.
One thing I want to leave you with is the XL pipeline that was turned down by President Obama in the U.S., it was actually approved by the National Energy Board because we negotiated that back in 2008 and we addressed all these issues in that. So there we are.
The Acting Chair: I'd like to thank Mr. Caron and Mr. Core for participating in our hearings today. You've added a lot to our study and have given us something to think about. Gentlemen, thank you and have a good evening.
Our next witness, via video conference, is Kelcie Miller-Anderson. She is the founder of MycoRemedy, an environmental start-up company that remediates contaminated sites without utilizing any chemical- or energy-intensive inputs.
I invite Ms. Miller-Anderson to begin her five-minute presentation. Afterward, senators will have questions. I know that the subject of remediation without utilizing any chemical- or energy-intensive inputs will generate some interest.
Ms. Miller-Anderson, please make your presentation.
Kelcie Miller-Anderson, Founder, MycoRemedy: Thank you.
I grew up in Alberta, surrounded by nature. My childhood was spent skiing in the Rockies, fishing on the Bow River and camping in Kananaskis. Surrounded by such beauty and such a diverse environment, it would be near impossible to not have fallen in love with the environment and to not want to fight to protect it. I believe I've been an environmentalist my entire life.
However, I'm not your typical environmentalist. Where others see protesting, boycotting and rallying as the answer — the be-all and end-all to protecting our environment — I believe that the best way to create change is to actually do something: to create solutions. Rather than dedicating time and energy to opposing oil and gas operations, I believe that the time and energy is better spent dedicating ourselves to creating new solutions and developing new technologies to make the industry more sustainable and environmentally conscious, while at the same time working to develop new technologies so that when we are ready, we can begin a smooth transition to incorporating new energy sources.
Growing up in Alberta, I was exposed to the oil industry from an early age. As I grew up, I began to take notice of some of the press surrounding the industry, focusing always on the negatives and highlighting the environmental concerns. It was around this age that one afternoon I was in the alley behind my house when I noticed a dandelion growing up through the pavement. It's not an uncommon occurrence to see a dandelion, but there was something about this particular one that sparked my interest. Knowing asphalt was hydrocarbon-based, I became very curious as to why dandelions could grow in environments that were toxic to most other plants. With a little bit of research, I soon discovered it was attributed to the accumulation of a fungus in their roots.
Since this everyday observation seven years ago, I've developed two novel and completely natural methods of remediation to help support the industry by alleviating some of the environmental concerns. In January of this year, I founded my first company, MycoRemedy, with the goal of changing the way the world remediates.
Contamination of both soil and water is truly a global concern, and the problem is only further elevated by the lack of current technologies to efficiently address this contamination. Current remediation technologies tend to be slow, costly and extremely energy intensive. At MycoRemedy, we aim to change this by transforming the way we remediate, using fungi-based techniques to restore polluted environmental sites naturally. We aim to provide the most cost-effective, rapid and environmentally conscious solutions available without sacrificing high-quality results.
Our technology use utilizes fungi, part of which is diverted agricultural waste from commercial mushroom production. We manufacture it into our novel myco mats. All aspects of these mats are completely natural, meaning they can be left in the soil indefinitely after remediation is complete.
Early trials of our technology show that our technology is 90 per cent cheaper, 98 per cent faster and, unlike traditional remediation methods that don't actually do any remediation, we remediate 100 per cent of the contaminants.
In order to protect the environment, we must first understand it and learn from it. I feel it is important to support our environment and ensure its protection, but I don't believe we need to sacrifice our industry and our economy in order to do this.
A prosperous economy is integral to innovation, especially environmental innovation. To support innovation, to support change, we must support our industries and help them adapt so we can secure an economy that can support and foster further innovation.
I believe the lack of social licence and the opposition to new projects that would enable the efficient transport of crude across our country come from a place of misinformation and wrong assumptions. Many see a huge environmental risk where, in reality, the risk is quite minimal. They simply care. They want to protect the environment and ensure a healthy environment for our future generations.
We need to show them the incredible environmental innovations taking place in our nation — the innovations in all areas of policy and technology that are addressing our unique environmental challenges and working to proactively reduce our footprint. We need to show them that we are proactively addressing the problems before they even arise, that we are capable and that we are ready.
Thank you.
The Acting Chair: Thank you very much, Ms. Miller-Anderson. I was concerned when you started that you were going to suggest that we start growing dandelions, but I feel very comfortable that my backyard is safe. I've got lots of them. I'm ready to go.
We'll start questions from Senator Eggleton, please.
Senator Eggleton: Thank you.
You've told us about the process that you've discovered and the research you've done. I think you said your company was fairly new. Have you had any experience in dealing with real spill problems or cleanup problems that you've been involved with?
Ms. Miller-Anderson: The company is very new. The technology has been in development for the past seven years. However, the company was established back in January to help further develop it.
Right now, we've done a little bit of field work, not on contaminated sites, over the summer and are just entering a research-intensive lab phase over the winter, where we're working on testing different contaminant types and soil types, really answering some of those questions. But no large field trials have been done. The anticipation is that we will be undertaking some of those the next remediation season, so in late spring or early summer 2017.
The Acting Chair: If I could pose a question before we move to other senators, in the process that you use, there must be some waste left at the end of the remediation. What can that be used for or where does it go? You're left with something. You've remediated the land but there's something left over.
Ms. Miller-Anderson: That's actually the really interesting thing that sets this technology apart. A lot of traditional methods — and one you might be thinking of that's similar is phyto-remediation, which is remediation using plants. When you use a plant to remediate, it's a method of bioaccumulation. The plant is taking up the toxins, the residual hydrocarbons, into the plant. The toxins and contaminants are then contained within that plan and therefore need to be removed.
However, the unique thing with this technology is that's not how it works with mushrooms. It's similar to how mushrooms act in nature. They're decomposers. What happens is they're actually releasing enzymes underground. There's mycelium, the vegetative part, which is a branching network under the soil. That's releasing enzymes that are completely breaking apart the hydrocarbons and contaminates into smaller, non-toxic components.
So in terms of having any bioaccumulation or residual contamination in the mushrooms or anything that needs to be removed, that's not the case with this technology. You can leave it in the soil indefinitely.
The fungi and mycelium is actually a really integral part of any healthy ecosystem. The idea is that by leaving it in place, we've already shown it helps to re-establish local bacterial communities, and it will help support the reintroduction of native plant species.
The Acting Chair: Thank you for that. I'm also the deputy chair of the Agriculture Committee, so you've given me a new use for mushrooms.
Senator Beyak: We sit on the Agriculture Committee together, and I'm very impressed to see someone so young looking at such innovative solutions. Who are you sharing your information with? Who are you working with?
I would love to see Canada on the cutting edge of the solution to cleaning up fossil fuels — clean coal, clean gas, clean oil — and that we take a stand as the leaders of clean fossil fuels and cleaning up the things we can, rather than being on the bandwagon with everyone else on the planet who says climate change is more important than terrorism or whatever. I wonder who you're working with.
Ms. Miller-Anderson: I completely agree. I think we are already on the forefront of that. There's amazing work being done, both on policy and in developing new technologies, all across Canada. I've seen amazing work coming out of industry in Alberta. I really do think we will be leaders in that, and we're already on the path to making that happen.
In terms of who I'm working with, right now I'm in the process of patenting and keeping the information to myself and within the company. I've just signed engagement letters. I'm working with SAIT and the University of Calgary through the Innovate Calgary program. My lab space is at the Southern Alberta Institute of Technology. I'm also being supported through the entrepreneurship eHUB program at the University of Alberta, so I have some supports there and am hoping to tap into some other resources in Alberta as well.
Senator Beyak: Thank you very much.
Senator Raine: Thank you, and congratulations for the really innovative stuff you're doing.
I wanted to find out about the use. Is there any difference between heavy oil, oil from the oil sands, or does it work on all kinds of different oil and petroleum products?
Ms. Miller-Anderson: That's an excellent question.
The different oil products are basically categorized into different fractions. Right now I've been testing work with F1 to F4 hydrocarbons, which are light oils to fairly heavy oils as well. One of the aims of this winter research season is to be testing with different mixes, ages and weights of oil products in order to establish a use case for each of those.
In theory, it's very promising that it will work for not only hydrocarbons and different oil types but also other organic and non-organic contaminants. This winter we'll also be looking at things like the bioaccumulation of heavy metals.
Senator Raine: It's very interesting. A lot of what you've done so far is theoretical and you're just starting into the field work?
Ms. Miller-Anderson: Yes. Everything so far has been lab-based, trial-based, and a little bit of field work this summer. However, now that we're trying to commercialize the product and get it ready for market as soon as possible, we are doing even more lab work to validate it for a larger variety of contaminate and soil types and then do the field work this coming season.
Senator Raine: I'm looking at the interesting article in Pipeline Observer magazine, and it shows a rolled-up mat that has a plastic part. Does that plastic disintegrate as well or do you have to somehow clean that up?
Ms. Miller-Anderson: Every component of the mat is completely biodegradable. It has been designed in a way so that it can be left in the soil and leave no residues in the soil. It's actually not plastic; it's a bio-compostable plastic, so there are no issues of residues or contamination or pollution of any kind arising from anything within the mat.
Senator Raine: When you say "in the soil," does that mean the mats are spread out and soil is piled on top of it?
Ms. Miller-Anderson: No. If you can imagine how you roll sod, this is applied in the same way. We tested two prototypes, application methods, over the summer. One is the horizontal method, where you essentially roll it out. The mycelium, that branching network of fungi, actually goes from inside the mat and begins to branch into the soil and will continue to branch deeper the longer it's there.
We are also testing a vertical installation method, where you essentially auger a hole into the soil, and you can insert a different type of mat vertically so you can reach deeper levels of the soil more rapidly.
Senator Raine: Thank you very much. That's really interesting. Congratulations.
Ms. Miller-Anderson: Thank you.
[Translation]
Senator Boisvenu: If I understand the work that your enterprise does, your research also involves contaminated soil as well as contaminated water.
[English]
Ms. Miller-Anderson: Yes. The early trials have been conducted on both contaminated water and soil. However, right now the focus is contaminated soil. In the future I do plan to expand it further into contaminated water. However, the application method would need to be designed differently, and that's not something that has been the focus right now. But there is potential and it does work in water environments as well.
[Translation]
Senator Boisvenu: The Canadian West is facing a big challenge with regard to wastewater produced by the development of oil sands. A very large quantity of water has been stored in basins. A Quebec company is currently doing experiments with decontamination, using enzymes. Are you aware of these experiments?
[English]
Ms. Miller-Anderson: Yes. The enzyme method is a form of bioremediation, primarily using bacteria. They are both types of bioremediation but a little different in the mechanism of action. I have worked with some of the tailings water, the processed water, and had very good results with treating the residual hydrocarbons, as well as the naphthenic acids contained within the tailings water.
As you speak to the enzyme protocols, that's actually something I'm working on over the winter lab season, developing a method in the lab, extracting these natural enzymes produced by native fungal species in order to develop an enzymatic remediation process where you can add the enzymes directly to the contaminated material. The goal of that is to have more targeted remediation, whether that's deeper levels, groundwater, things like that. But that is in development, and I see it having very good synergy with the current micro-remediation technology that has been developed.
[Translation]
Senator Boisvenu: To your knowledge, and according to your perspective in your province, can you estimate when it would be technologically possible to decontaminate wastewater, particularly the wastewater from oil sands, in order to be able to return it to nature?
[English]
Ms. Miller-Anderson: I actually think that this technology has big promise for the remediation of tailings. That's what I initially developed it for. One of the big issues in the tailings, apart from the processed water, is also the mature fine tailings, which is sort of a slurry, a yogurt-like texture, a mixture of residual hydrocarbons and things like that, but has a high water content. This technology has shown promise in the dewatering of that, so it helps to consolidate the material. That's one of the big issues they're having, is consolidating. There are no technologies I'm aware of that consolidate and remediate at the same time.
The goal is that I would like to be the first commercial-ready technology for the remediation of the tailings ponds produced in the Alberta oil sands. However, the focus right now is to establish myself and build the technology inventory and the company for existing sites where there is existing legislation.
With some of the new legislation that's coming in and the new policies regarding the production of tailings and the tailings management plan, I believe that probably in the next five years we will see regulations that will require and mandate the remediation of those tailing ponds. I plan to continue the research for that application and, once those regulations come into place, be ready to act there as well.
[Translation]
Senator Boisvenu: Thank you, and congratulations on your work.
[English]
Senator Raine: If you don't mind, I have one more question.
I am from British Columbia. As you might have heard, we had a tugboat pushing a barge run aground and spill oil in a very sensitive area that's creating huge hardships for the local people. Do you think your mats could be used on oil spills along the shores of the ocean?
Ms. Miller-Anderson: It is very high in salinity because it cycles through a lot. The technology has shown that it does work in high-salinity environments.
Another thing that I'm working with is cloning and working with indigenous mushroom species. It's really important to me that wherever I'm working I'm using a native mushroom species, because I don't want to be introducing any invasive species. One of the applications that I think this technology has is to ecologically sensitive areas where traditional remediation options just aren't going to work. They're going to destroy that sensitive ecosystem, so I do think that this has a big application there. Potentially, you could use more marine types of fungal species. I have done some reading into studies on saltwater fungal species that are in those ecosystems.
Senator Raine: That's great. I'm really glad to hear that, because it's very depressing when you think of us as human beings making a spill and a mess of the environment and putting people's food source at risk. This is very good news. Thank you very much for what you're doing.
Ms. Miller-Anderson: Thank you.
The Acting Chair: Ms. Miller-Anderson, you inspire us. Young Canadians always inspire me.
I have one question, though, as someone who is inspired. I want to ask you a bit about your background. What is your training? What's your educational background?
Ms. Miller-Anderson: I am currently in my undergrad at the University of Alberta. However, I don't really think that age is a limiting factor. Oftentimes people see somebody who is young and they see youth and don't necessarily think that they have the same potential to develop these scientific innovations and discoveries.
I started doing the research when I was just 15 years old and have really learned that in science and innovation it's not your age or your experience that matters; it's your ability to look at something in a unique way. That's how we innovate. That's how we create new solutions.
I think that these types of technologies and new groundbreaking environmental innovations are not just going to come from well-established researchers or professors or people who have been in the industry for probably longer than I've been alive. I think that they are really going to come from a diverse group of people, whether that's citizen scientists or youth who just have a passion for creating change.
The Acting Chair: Good for you and keep up the good work. You're absolutely right: You don't have to have age to be innovative.
I'd like to thank you on behalf of the committee for participating tonight. As I said, you have inspired me and you've inspired my colleagues. We look forward to seeing future successes from you.
Ms. Miller-Anderson: Thank you.
Senator Raine: And where do we buy shares?
The Acting Chair: We can't talk about that at this table, senator.
We wish the best of luck to you.
(The committee adjourned.)