Proceedings of the Standing Senate Committee on
Transport and Communications
Issue No. 10 - Evidence - January 31, 2017
OTTAWA, Tuesday, January 31, 2017
The Standing Senate Committee on Transport and Communications met this day at 9:30 a.m., in public, to study 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; and, in camera, for the consideration of a draft agenda (future business).
Senator Dennis Dawson (Chair) in the chair.
[English]
The Chair: I would like to welcome everybody. In particular, I would like to welcome our new colleagues here on the committee. We are going to start on time, as we have very good discipline at this committee.
I would like to introduce the new members: Senator Patricia Bovey from Manitoba; Senator René Cormier, New Brunswick; Senator Rosa Galvez is being replaced this morning by Senator Éric Forest from Rimouski, but he's just here for the day. We also have with us Senator Diane Griffin, Senator Nancy Hartling and Senator Raymonde Saint- Germain.
[Translation]
Welcome to the Standing Senate Committee on Transport and Communications. You will see that we work closely together.
[English]
It's a very non-partisan, very collective approach, and we have a long-standing tradition of cooperation.
[Translation]
I am counting on you. We will begin with witnesses in relation to our 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.
[English]
Appearing before us, we have Louis Bergeron, Vice-President, Quebec and New Brunswick, Energy East Pipeline, TransCanada. He is accompanied by Mr. John Van der Put, Mr. Gary Houston and Ms. Penny Favel, all from TransCanada, who will be able to assist Mr. Bergeron in answering questions.
The second part of the meeting will be held in camera. We will be talking about future business and the adoption of a report. As you know, my honourable colleague Senator MacDonald chaired all the meetings, and I intend on giving him back the chair for the next few meetings that will deal with the pipeline so that he gets credit where it is due and the criticism if it is deserved.
[Translation]
You have the floor, Mr. Bergeron.
Louis Bergeron, Vice-President, Quebec and New Brunswick, Energy East Pipeline, TransCanada: Thank you for inviting me to appear before your committee today. My name is Louis Bergeron. I have been a professional engineer for 37 years and I am a proud native of Quebec City and resident of Montreal. I am equally proud to be part of the team leading TransCanada's proposed Energy East pipeline project.
I am confident in my ability to inform your committee, especially given my previous role as Vice-President, Terminalling Operations and Pipeline Saint-Laurent for Ultramar where we developed and built a 250-kilometer pipeline which runs from Lévis to Montreal-East in Quebec. This pipeline, started up in 2012, crosses 32 municipalities and 686 properties. This was my life's work for a period of ten years. This pipeline has operated without any significant safety or environmental incidents and it has proven to be in the best interest of the public, replacing over 350 unit trains and 200 vessel movements per year.
Unlike their alternative of surface transportation, pipelines have fewer emissions, they safely lie about a meter underground and are designed to protect waterways and avoid dense population. As an example, in a 100-meter corridor, population density would be 36 times lower for the Energy East pipeline in comparison to the Quebec rail system currently used.
TransCanada is currently developing one of North America's largest oil delivery systems. We currently operate the Keystone Pipeline system, which has safely moved 1.4 billion barrels of crude oil mostly from Western Canada to refineries in the Midwest and U.S. Gulf Coast. TransCanada recognizes that the world is embracing cleaner forms of energy. That is why we have invested over $5 billion to produce emission-free electricity from a wide variety of sources including wind, solar, hydro and nuclear power. At the same time, we also believe that Canadians, like most others in the world, will continue to need oil. So the logical major questions remaining are: Whose crude oil will we use? Our own or that of other nations? How will we transport this crude oil? By pipeline or by surface transportation?
Please allow me a moment to describe the proposed Energy East pipeline. This would be a $15.7 billion, 100 p. 100 privately financed project. It will ship up to 1.1 million barrels of crude oil per day along a pipeline system that extends from Hardisty, Alberta, to Saint John, New Brunswick. This is equivalent to 1,570 railcars every day. Moving to the East, Energy East will deliver crude oil to the two Quebec refineries and to the Irving refinery in Saint John. These refineries process 700,000 barrels per day of crude largely supplied by rail or by ship from outside of Canada. The marine terminal in Saint John, which is a joint venture between Energy East and Irving Oil, will allow for a portion of the crude oil transported on Energy East to be exported to markets such as Europe, India, the U.S. East Coast and the U.S. Gulf Coast.
It is incredibly important that measures to ensure the safety and integrity of our pipeline occur at all phases of the project — from pipeline routing through design and construction and into operation and maintenance. TransCanada invests approximately $1 billion each year in integrity programs and preventive maintenance. The following measures will be implemented by Energy East: regular in-line inspections to monitor the condition of the pipe and identify any anomalies that need further investigation; monitoring 24 hours a day, seven days a week of the pipeline with ability to shut it down within 8 minutes; aerial patrol over the pipeline route every 2 weeks to conduct visual inspections.
Through scientific study and by listening to Indigenous communities and stakeholders through our engagement, we identified issues of concern. A broad category of concern is related to water safety, construction safety, emergency response, and the environment. Examples of these are the protection of lakes, rivers and watersheds and the potential effects of a spill on watersheds.
A second category of concern is around the Crown Duty to consult, the role of the Crown in the regulatory process, and the ability of Nations to have input into decisions at the NEB and in and around broader historic issues.
The third category of input from Nations relates to the potential for economic benefits as a result of this project. People want to ensure that they have the opportunity to access a share of those benefits.
If the Energy East Project goes forward, the Conference Board of Canada estimates that Canada's Gross Domestic Product would rise by $55 billion. Federal and provincial tax revenue will grow by $10 billion, and 14,000 new jobs would be created during development and construction.
As you have heard, I passionately believe that pipelines are in the national interest of our great country. I would also like to thank the honourable senators for the work you have done in studying and summarizing the environmental, public safety and economic opportunities oil pipelines like Energy East present. My colleagues and I are happy to take any questions you may have.
The Chair: Thank you, Mr. Bergeron. Senators Boisvenu, Eggleton and Mercer would like to ask you a few questions now.
Senator Boisvenu: Welcome to all of our guests. Mr. Chair, we are pleased to welcome you, given the challenges you have just faced. My best wishes for 2017 to you and to all my colleagues.
The Chair: Thank you.
Senator Boisvenu: Mr. Bergeron, I have a few questions for you. The U.S. government just approved the Keystone XL pipeline project. I would like you to tell us first about Western Canada's production capacity in order to supply both pipelines. Will the two pipelines be in competition or will they converge?
Mr. Bergeron: In the current context, it is expected that Western Canada's oil production will grow by 1.5 million to 2 million barrels over the next 10 to 15 years. Producers need an effective way of transporting crude oil to markets, ideally to export markets, since that is the best way of maximizing producers' return on investment.
At the end of last year, Trans Mountain and Enbridge's Line 3 were approved. There is also additional potential since the U.S. government is now open to TransCanada submitting another permit application to complete Keystone XL, which in fact was done this week. This represents a capacity of 800,000 barrels per day, offering attractive opportunities to obtain a price close to the international price of oil.
Energy East is unique in the sense that it links two of the most important refineries in Canada, which are not currently linked by a pipeline, from the west to the east. This would mean that three refineries in Eastern Canada could have nearly 100 per cent of their needs for Canadian oil met directly by a pipeline, which is not currently the case. This would also facilitate access to export markets to Asia, from Saint John, New Brunswick.
Each project offers something unique. As to the expected increase in production for all the projects, there is the question as to whether the two things match up perfectly. I think it is possible for pipeline capacity to exceed production capacity, and that would be a good problem for the industry to have.
At this point, it will take 5 to 10 years for all the projects to be approved and completed. In the coming years, we will see which ones are the most appropriate and which ones can be 100 per cent completed, that is, built and in operation.
Senator Boisvenu: Let's move on to the trickier terrain of Quebec now. Since the Energy East pipeline project was announced, we have seen the strongest resistance in Quebec.
During our consultations in Eastern and Western Canada, many people indirectly criticized the developer for not promoting the project to Quebecers. It seemed as though the developer was expecting the federal government to promote the project.
I would like to know what your public buy-in strategy is. In discussions about the project, there is some confusion as to whether people are opposed to extracting oil or to transporting it. Environmentalists seem to confuse these two issues. What is your strategy to get public buy-in on the project in Quebec?
Mr. Bergeron: At the start of my presentation, I referred to the completion of the Pipeline Saint-Laurent because I think it is a good example of what should be done with Energy East, given that Quebec does not necessarily have a pipeline culture.
Unlike in Western Canada, a lot of explanations are needed in Quebec to reassure the public and the various stakeholders. In my opinion, this will take more work on the ground. TransCanada decided to create a Quebec management team. I work at the Montreal office, as part of the Quebec management team and, for the past year and a half, we have been in contact with stakeholders on the ground. We have had a number of meetings with elected officials and owners. We are for example discussing a framework agreement with the UPA. A great deal of work has been done in recent months to provide more information, to listen more attentively and to make adjustments to the project as needed.
This is of course essential for success since there are many issues in Quebec. I am thinking in particular about the debate about greenhouse gas emissions and the need to reduce fossil fuel consumption over the coming decades. These are the issues that we have to work on all the time.
An article by Pierre-Olivier Pineau in yesterday's La Presse noted that if there is demand for oil products, it will have to be met in some way. Crude oil must be carried either by rail or by pipeline.
We are clearly going into a transition period as regards energy, but for the coming decades a large share of energy consumption will still be fuel-based. We must also bear in mind the whole petrochemical industry, which is growing steadily and which sustains thousands of jobs in Quebec.
I would say that we have to work on the ground to win the confidence of the public and of people affected by the project. The same is true for the First Nations. The strategy is to be much more present on the ground, to listen and to make any adjustments as the need arises.
Senator: Thank you.
[English]
Senator Eggleton: Thank you very much for being here.
You've said that pipelines are safe. We have been studying that for the past year, and we have heard that on many occasions, particularly with regard to the option of transporting by rail.
However, I note that an article from The Canadian Press of a couple of days ago is a cause for some concern in that regard. The Canadian Press, I don't think, can be accused of publishing fake news. They say:
Figures compiled by the National Energy Board show that in the past three years, incorrect operation — which covers everything from failing to follow procedures to using equipment improperly — has caused an average of 20 leaks per year.
What is alarming about this is that's up from an average of only four leaks per year in the previous six years. It's up to 20 now.
They point out some specifics, such as:
Alberta Energy Regulator investigations into Plains Midstream Canada, for one, found that the company hadn't inspected its pipelines frequently or thoroughly enough, did a poor job of managing the ground around its pipelines and hadn't properly trained control room staff.
A subsequent audit found the company had improved its safety practices, but not before those failures helped contribute to a 4.5-million litre oil spill in 2011 near Peace River, followed by a 463,000-litre oil leak into the Red Deer River a year later.
In 2015, a Nexen Energy pipeline south of Fort McMurray, Alta. burst, spilling about five million litres of emulsion including about 1.65 million litres of oil near its Long Lake oilsands operation. The AER's investigation into the incident continues, but Nexen's preliminary conclusion was that the pipeline design was incompatible with the ground conditions, and wasn't installed properly.
They're pointing out here that human error, whether it's burying a pipeline too shallowly or not fastening bolts tight enough, is increasingly a factor contributing to pipeline leaks. As I said, they seem to be going up. May I have your comments about that?
John Van der Put, Vice-President, Stakeholder Safety and Emergency Response, Energy East Pipeline, TransCanada: Good morning, honourable senators.
Safety is absolutely the number one priority for TransCanada. We build safety into all aspects of the pipeline's life cycle — the way it is constructed, the way it is maintained, the way it is operated. We have very strict procedures to ensure the safety of our pipelines.
Incidents do happen, and certainly when they do happen, we learn from those in order to ensure that they're not repeated. But when you look at TransCanada's record specifically over the past 35 years, we can observe that the number of incidents that have occurred specifically on TransCanada's natural gas pipelines has been cut in half. As well, if you look at TransCanada's record with regard to the industry in general, with regard to the pipelines that are part of the Canadian Energy Pipeline Association, it is about half as well.
You alluded to control room procedures as well. As Mr. Bergeron mentioned, it's a 24-7 surveillance of the health of the pipeline. The staff in the control room, those operators, are very highly trained. They have to go through a minimum of six months' training using simulators, similar to what jet airline pilots do, in order to be subjected to all kinds of different scenarios that they might potentially see in real life so that they're able to act very quickly if there ever were a problem.
In addition to that, they have to be recertified every three years. They have to prove that they still have the necessary competence in order to operate the pipeline safely.
That is just one example of the kinds of things that TransCanada specifically does to ensure the safety of its pipeline.
Senator Eggleton: They also mentioned in the article — and this comes from the National Energy Board — that a lot of these are not properly constructed in the first place; sometimes they're too shallow or sometimes the bolts aren't fastened tight enough. This leads to this potential problem. So what do you do differently from any of these other operations to ensure that doesn't happen? You're constructing these things.
Mr. Van der Put: There are two things. We have independent third-party inspection of our construction practices and the execution of our construction to ensure that all of the standards and codes are being followed and that things like burial depth, for example, are appropriate for the conditions.
As well, the National Energy Board rigorously monitors the application of those codes and standards throughout the life cycle of the project, not only during its construction but also in the way that TransCanada maintains its pipelines and ensures that they stay safe, as well as the way that TransCanada operates them.
Senator Eggleton: I hear what you're saying about your own company, but in the industry, generally, we have seen this increase, according to the National Energy Board, of up to 20 leaks per year. As an industry person, what do you think needs to be done to reduce that threat?
Mr. Van der Put: Although they are very rare, incidents do happen. A key thing we need to do is learn from those incidents when they do occur and we need to share that information with each other. That's certainly something that we do as members of the Canadian Energy Pipeline Association and also with sister associations in the U.S. that TransCanada is a member of. We ensure that we share that information so that we can all learn from it.
Senator Eggleton: Okay, I hear you, but according to the NEB, the numbers are going up, so you better do something to bring them down.
[Translation]
Mr. Bergeron: If I may, sir, I would like to add something else quickly because I think this is important.
According to NEB statistics, the volume of spills in the first three quarters of 2016 was about 20,000 litres, which is one fifth of a tanker car, for the whole of Canada over the 80,000 kilometers or so that are regulated. I read the article, but the data used by journalists have to be more thoroughly analyzed and compared with those on the NEB site.
I would like to make a final point about the culture of safety in the company and the reliability of staff in the control rooms. Regarding Keystone, which began operating in 2010, there have been 72 shutdowns because the instruments indicated a potential leak. In such cases, the pipeline is shut down, checks are performed and the pipeline is not turned on again until the controllers are sure there is no leak. This is by way of example to support my colleague's explanation.
[English]
The Chair: As you know, colleagues, there are 16 or 17 members on the committee now, so the chair will have to be more severe as far as timing is concerned. I've been generous so far. Don't take it personally, Senator Mercer. I have six names on the list already.
[Translation]
This also applies to the witnesses. It will allow us to ask more questions. The briefer the answers, the more questions we can ask.
[English]
Senator Mercer: First, welcome back. I am delighted to see you here.
I will get right to the point. Mr. Bergeron, you talked about your years at Ultramar. You talked about 250- kilometre pipelines that you were involved in across 32 municipalities and 686 properties.
I wish you well when you start talking to people in the greater Montreal area. However, you did not mention crossing properties of First Nations and your negotiations with them. I would appreciate if you could make a comment on that.
As well, you all talked about an eight-minute shutdown ability for a leak. How are you doing going to achieve that? Are you going to be using drones, which is a new technology that wasn't available before? It seems to me to be a logical resource from a cost point of view but also from a more frequent inspection point of view.
[Translation]
Mr. Bergeron: It will be very difficult to give a quick answer to that kind of question. As to the First Nations, I will ask Ms. Favel to provide a summary. As to reaction time to shut down the pipeline and the possibility of using drones, Mr. Van der Put can provide some details.
[English]
Mr. Van der Put: With regard to leak detection, we have many computerized systems that overlap each other to allow us to determine very quickly if there is a leak. There are actually two independent computer models. Also, information about pressures, temperatures and flows are coming from thousands of sensors all along the pipeline every five seconds. Those allow the controllers in the control room to quickly defect if there ever were a problem.
Specifically with regard to drones, that is a technology that we do use for inspection, specifically site-specific inspection. If we want to get a better sense of the characteristics of a river crossing or of a slope, drones can be very useful in that regard.
Eventually, we would like to be able to use drones for right-of-way surveillance as well. We use fixed-wing aircraft or helicopters right now, every two weeks. Right now, there is a Canadian aeronautical regulation that mandates that the operator of the drone has to maintain visual line of sight with a drone. So it can't be used for that purpose yet but potentially in the future.
Penny Favel, Director, Indigenous Relations, TransCanada: Your question is an important one.
We're happy to say that when the project started and we were very early into engagement, we were happy to be speaking to up to 200 indigenous communities in Canada. Our focused engagement includes 167 indigenous communities.
With respect to your question specifically around reservations or reserves versus traditional lands and indigenous communities, we are only involved in crossing one reserve in Canada, Carry The Kettle First Nation. We have very good relationships with them.
To your specific point, we have had over 3,500 meetings to date.
With respect to indigenous communities, we engage them through a variety of means as part of our delegated duty to consult, including information sharing, engaging them, listening to their concerns and going back and listening again. It's vital to project planning and to doing our environmental planning work.
We also engage them in the gathering of traditional knowledge, either through what we would call a traditional land-use study or a traditional knowledge study. As I said, we have between 70 and 75 of those. Once we get that information in, we work very hard with our environment people to incorporate that, not into project planning alone but into environmental planning, including avoidance and mitigation.
Senator Mercer: I draw your attention to our interim report. There are ongoing complaints about the pipeline companies being late to the dance. Suddenly you're all consulting with people in Eastern Canada; suddenly you're our friends; suddenly you want to reach out to us. If you come to the dance, you have to be introduced to your partner before you can ask them to dance. I recommend that you continue your work, reaching out.
You continue to talk about Saint John, New Brunswick. Senator MacDonald and I would like you to talk to us about the Strait of Canso. We think it's important that the Energy East Pipeline does go by Saint John, New Brunswick, and make the product accessible to the largest refinery in Eastern Canada, the Irving refinery in Saint John, which we have visited as a committee.
We would also like you to consider extending that pipeline to the Strait of Canso. The petroleum products that we import in Canada in the East usually come through the Strait of Canso. There are large storage tanks that receive the product from offshore suppliers, and it then is moved inland, much of it to the Irving refinery but to other refineries as well. It would seem logical to do that, to keep the transportation of oil products out of the environment, or to reduce the number of petroleum products in the environmentally sensitive Bay of Fundy. Senator MacDonald and I have made this comment time and time again, but there is a constant discussion in talking to the Province of New Brunswick. It is very important that you do that.
They're not the only ones affected by this pipeline going to Saint John, New Brunswick. Guess where the ships have to go? Through the Bay of Fundy. And guess what's on the other side of the Bay of Fundy? A very lucrative lobster fishery and various other kinds of fisheries in Nova Scotia, and a large tourism industry. It's important that you include Nova Scotia in your consultation.
But we also think if you extended the pipeline, there is already an existing gas pipeline that goes part of the way that will probably be abandoned in a couple of years. It might fit the timeline perfectly if you use that existing one, if it's technically possible, or at least use the right-of-ways already in existence for that gas pipeline, to get the product to the Strait of Canso, where you're in the open ocean, not in an environmentally sensitive place like the Bay of Fundy. Plus, you're much closer to world markets. You save at least a day's sailing, and that means money in your pocket.
[Translation]
Mr. Bergeron: This is an important issue. That's why we've been focusing on this issue again following the meeting on October 19. The project is 100 per cent funded by the private sector, and the producers are the ones that provide the financial support. Producers and shippers want to have crude oil to export and transport to New Brunswick, in the Bay of Fundy. Irving Oil has been operating the port facilities safely for over 50 years. Shippers are asking for the opportunity to export from Saint John.
It would be possible to go to Nova Scotia. It would mean an extra 350 km of pipeline, and consequently, an additional investment for the shippers. For the pipelines, we always want to plan a lower-impact route, which always turns out to be the shortest route. The Saint John route helps reduce the length of the pipeline and the impact of the project. It meets the shippers' trade needs, and the project seems to show that it's the lower-impact route when we compare the different solutions.
[English]
Senator Unger: Thank you for your presentation.
As you know or may not know, I'm from Edmonton. Of course, we are very interested in any pipeline, so my question is about your opinion of timelines. How long will it take to get the part of Keystone XL finished that we need to have finished? And if Energy East is approved, how long will that take?
Gary Houston, Vice-President, Energy East Pipeline, TransCanada: Thank you, Senator Unger, for your question.
Obviously, both projects are very important to TransCanada and to the shippers who are supporting them. We have interests in both projects, as my colleagues have mentioned. Energy East presents a unique opportunity to transport oil to refineries in Eastern Canada and to access the Atlantic market. The Keystone XL project obviously accesses the American market, in particular the U.S. Gulf Coast market, which is also important.
Both projects are in the midst of a regulatory process. I would say that our role is to participate in those regulatory processes actively and to present the projects in the best light and provide the information necessary to move the regulatory processes forward. I do not believe we're at a point where we can predict how those are going to come out and what the timing would be, so it's a little premature for us to comment on timing.
Senator Unger: One more quick question: Politics notwithstanding, in your opinion, what would the lifespan of the oil sands be?
Mr. Houston: There are 170 billion barrels of oil in the oil sands. It's the largest single reserve of oil on the planet. We're currently exploiting it at 3 million barrels a day, so doing the math, it's a very long time. We also are constantly reminded in our industry that technology continues to advance, and we continue to find new and better ways to exploit reserves like the oil sands. So it's a very long time.
Senator Unger: Thank you very much.
The Chair: Senator MacDonald.
Senator MacDonald: Thank you, chair. It's good to see you back.
Thank you for your presentation this morning. I'm not sure who should answer this but feel free to look around to which one you want to go with.
In the initial stages of the Energy East proposal, there was also a proposal for an export facility in Cacouna, Quebec. I'm curious on what you think about the cancellation of that portion of the project. Do you think it was justified? There was great concern expressed about the impact of the export facility on the belugas, and eventually a consensus was reached that this part of the project had to be abandoned. I'm just curious if any of you were involved in that process and if you came to the same conclusion as the politicians.
[Translation]
Mr. Bergeron: The decision was made immediately when the government declared the beluga an endangered species. In terms of the discussions on the project's trade component, we have some shippers that want to export from New Brunswick, and others that want to export from Quebec. There are always shippers that want to export from Quebec. That's why we haven't completely ruled out the possibility of an export port in Quebec.
The current Energy East application doesn't include a port in Quebec. However, the company's position is that, if it can be done properly together with the communities concerned and by obtaining the environmental approvals, there would then be an opportunity to add an export port in Quebec.
The decision was made immediately when the government declared the beluga an endangered species. The company then decided not to proceed with the Cacouna option. Several other ports were studied. However, no other option was worthwhile from a trade perspective, and none met the company's decision-making criteria.
[English]
Senator MacDonald: I'm going to go back to what Senator Mercer raised about the circumstances and the environmental concerns that exist regarding the belugas in the Gulf of St. Lawrence. The concerns in the Bay of Fundy are probably tenfold. Endangered right whales there are giving birth, and the humpbacks feed there for about six months of the year. There are huge scallop and lobster industries. There are some of the highest and strongest tides in the world.
There is a lot of petroleum exported there now, it's true, but that petroleum is all refined product, not heavy bitumen. Irving is supposed to construct a brand new facility there — one with a size of 7.6 million barrels that already exists at Point Tupper, and they have years of experience handling heavy petroleum.
Is Energy East ready for what I believe to be the eventuality that the concerns expressed about the establishment of an export facility in Cacouna are going to be that much louder in Nova Scotia? Do you have an alternative strategy?
Mr. Van der Put: Senator, as was mentioned earlier, we know that Irving Oil has been operating its refinery and its oil loading facility for the last 60 years safely.
Specifically with regard to the right whale, which is an endangered species found in the Bay of Fundy, action was taken in recent years to move shipping lanes away from critical habitat for the whale. That has significantly improved the situation, and there has not been any impact since that was done.
Through our environmental and socio-economic assessment, we have assessed the environmental conditions in the Bay of Fundy. We are confident that this project — by the way, we would be talking about less than an additional ship per day over and above the ship traffic that is already in the Bay of Fundy — would have no material impact to the environment.
You mentioned heavy oil. With regard to the product itself, that is something that emergency response organizations in the Bay of Fundy are able to deal with, specifically ALERT, the Atlantic Environmental Response Team. They and we understand the properties of heavy oil as opposed to any other type of oil and would be able to deal with it in the extremely unlikely instance that there were to be a spill.
Senator MacDonald: I want to clarify a couple of points, and this should be on the record. Yes, it's true that they did divert shipping lanes from the pathway of the right whales toward the shoreline of Nova Scotia. It's Nova Scotia that takes the increased risk. That's where the diversion has gone. I think that has to be on the record.
In terms of the level of petroleum being handled, again it's not a refined product; it's a heavy product. There are about 300 or so tankers going to Point Tupper but also 1,200 tankers going into the Bay of Fundy currently. There is enormous tanker pressure there, and this is going to increase the tanker pressure again.
As a Nova Scotian, I think the tanker pressure would be better bled off to Point Tupper. I think that's the responsible thing to do. Quite frankly, I think Energy East should get its head around this and look and see what's coming down the road, because it is going to come.
[Translation]
Senator Forest: Thank you for being here and for answering our questions. My first question concerns the challenge of social acceptability. It involves transparency, of course, and the climate of confidence that can be established with members of the public, who are very well informed these days.
At this time, the pipeline construction standards are basically related to the American code. The land for which the pipeline conventions are being developed in the United States has a very different climate from the land in the corridor your pipeline may use. One of the municipalities' major concerns is the protection of drinking water supplies. The surfaces of the corridor you want to use will be frozen for several months each year, which will make leaks difficult to detect. How can your company reassure the communities on that front?
You're committed to making every effort to create the safest infrastructure possible. However, some questions remain. Mr. Bergeron, you spoke earlier about the 250-km pipeline between Lévis and Montreal East, where no significant accidents have been noted. What does "no significant accident'' mean? Two litres, 100 litres or 10,000 litres? The small details often help us build trust with the population as a whole. Between not having any significant unquantified accident and saying that it amounts to a third of a railcar, a discussion must be held and the situation must be described more accurately.
Mr. Bergeron: In Canada, the CSA Z662 standard has been in place for several decades. I think we're now on the fourteenth edition. These standards are developed based on the Canadian climate and all the known parameters related to the Canadian climate.
Drinking water is a major issue, and we're working closely on the matter with a number of people in the field. First, we're trying to bypass, as much as possible, all drinking water sources. When we need to get close to a source, we double the thickness of the pipe in places that cross areas where drinking water sources may be found. In terms of the operation of leak detection and tracking systems during the operating period, we take special care in these areas.
Regarding the St. Lawrence pipeline, I can assure you there have been no leaks. There have been certain incidents — I can't speak for the company because I'm no longer there — and work has been done to improve the pipeline in some sectors. However, there have been no leaks as such.
Senator Forest: For the average person, saying there have been no leaks is more reassuring than saying there has been "no significant accident.''
Mr. Bergeron: Since I'm no longer with the company, it's difficult for me to be so firm. However, to my knowledge, there has never been one.
Senator Forest: We can take an elected politician out of a municipality, but we can't necessarily take municipal concerns away from the former politician. We're very concerned about the protection of the environment in a broad sense, and particularly the protection of our drinking water sources.
My next question is the following. In the case of a leak, the communities must act as a first responder, and this requires training and equipment. Some small communities along the corridor you have reserved will not have the financial, human and technical capacities needed or the type of equipment necessary. What's your plan for these circumstances? We hope that we never need to respond, but this is a major factor. It's one of the realities that Canadian communities must face in terms of rail transportation, for example. It's a major issue.
I imagine that you're making all the necessary decisions to build an extremely safe infrastructure. In addition, one of the most significant waterways that the pipeline will cross is the Ottawa River basin. We had said that the safest process was horizontal directional drilling. Your company never responded, on the one hand, by eliminating this technology. However, we were never reassured regarding an alternative. It's likely the most significant watershed that will be crossed. I think it's important that we be completely reassured.
Mr. Bergeron: Thank you for your question, Senator Forest. With regard to the emergency response component, all TransCanada's emergency plans must align with the municipalities' plans, and this is done with the first responders. Mr. Van der Put has already started the process with all the Canadian municipalities to align the emergency plans, inform people and train them when necessary. First, in the case of an emergency, we'll ask first responders to secure the perimeter and population and to contact TransCanada, which will send its team. There will be a technician every 60 kilometres in Quebec. The technician will be one of the first people to respond and can coordinate the activities in the field with the first responders while waiting for the resources and equipment to arrive. Everything will be done in the spirit of cooperation. Our goal is to have all these plans ready two years before the pipeline goes into service, which will provide two extra years for training.
In terms of the Ottawa River, the crossing is very important. It's a technical challenge given the soil geology, and the directional drilling technique would provide for at least 20 metres under the riverbed to place the pipe. We've done much more engineering work, and we'll have good news to report in the near future. We're actively working on finishing our engineering studies in order to proceed with the safest and most robust method possible.
Senator Saint-Germain: Thank you, gentlemen, for taking the time not only to meet with us and answer our questions, but also to prepare documents that I read with great interest.
Mr. Bergeron, you noted the significance of the transition period in progress and the fact that renewable energy that is cleaner than oil will be available and will one day be necessary. We see that TransCanada has also made investments, in particular in hydroelectricity, and that you have one of the largest gas pipeline networks in North America.
Regarding this transition period, I want you to shed light on what seems to be a contradiction in your documents. You say that Canada and the world need oil and that the global energy demand is increasing — so, we're going from oil to global energy demand — and then you say that the existing pipelines are at full capacity and that Canadian production continues to grow.
Mr. Houston specified that oil sands in particular have a very long lifespan. How are you managing the transition to cleaner renewable energy? How will additional investments in the oil industry not harm your strategy and business interests?
[English]
Mr. Houston: That is a very interesting question, Senator Saint-Germain.
Senator Saint-Germain: I'm looking for a very interesting answer.
Mr. Houston: I think the best way to talk about this is that the world currently consumes something like 95 million barrels of oil per day and, on top of that, coal and natural gas. Of course, new "emissionless'' energies are growing rapidly. That trend is going to continue in the future. We will see more and more emissionless sources of energy developed.
At the same time, we're going to see a growth in the total amount of energy consumed around the world. The net of that, which is shown in one of our charts, is that in spite of that transition, that rapid growth of emissionless energy, we're going to continue to see a growth in the demand for oil going forward, at least for the decades to come. That's based on forecasts by the EIA and other international bodies.
In spite of our best efforts to advance in the direction of green energy, a continued dependence on oil and other fossil fuels is going to be with us for some time.
[Translation]
Senator Saint-Germain: Isn't there also predicted and supported growth in the demand for natural gas and hydroelectric energy? In what way is TransCanada also working in this area, which has many environmental benefits?
[English]
Mr. Houston: At TransCanada we have three business units. One is the transportation of oil, but we also have a very large business in transportation of natural gas, and we are one of Canada's largest private power producers. We continue to work in all three sectors, in particular in natural gas.
When we look at a project like Energy East, it is not to the detriment of our natural gas business. We have been working carefully with Gaz Métro and the LDCs in Ontario, and all the LDCs and customers on our natural gas system. We have come to agreement with them: What does the future hold, and how will natural gas be supplied to those marketplaces? We are much interested in continuing in those businesses.
Senator Saint-Germain: If you have some data on these two other issues of clean energy, I would appreciate it if you would provide it to our committee.
[Translation]
Senator Bovey: I also want to thank the witnesses for their presentations.
[English]
I am well aware of the balance that's obviously needed between the need, the demand, the safety and the social licence or the social acceptance.
Senator Mercer introduced the topic that concerns me, and that is the consultation or notification with our First Nations peoples. I appreciate you've answered this in part, but I'm putting my concern on the table.
I'm very aware of the difference between consultation and notification. I appreciate the number of people you've met with. I would like to know an awful lot more about the nature of those consultations. Were they really consultations in which indigenous peoples put concerns on the table, or were you telling them, as you said in your presentation, that you put concerns on the table, and it's obviously a balance of both?
I don't have a sense of the depth, the extent, or the real importance of what that is. As we go forward as a nation, if we don't truly listen and take into consideration all the questions, we're going to be in pretty serious trouble.
I suppose this isn't really a question, Mr. Chair. As a new member of this committee, this is an issue that I want to be monitoring. I would really appreciate more information so that I understand that difference between consultation and providing information.
Ms. Favel: Thank you very much, senator. That's something we grapple with as well.
Nothing is more important to me than having good engagement. If you don't have good engagement as a company, you don't get good information and you don't do the kind of planning that TransCanada likes to do. So I would like to answer that in a couple of ways.
The consultation duty falls to the federal Crown, as we know. Companies like TransCanada are delegated procedural aspects, which we do in a number of ways. We call it "engagement'' to differentiate what we do. I'm happy to call it "consultation'' or whatever you want us to call it, because it's important that we do it regardless of what it's called.
We will approach information sharing and notifications whenever we have a request to provide information by a nation.
We take the consultation aspects based on a number of criteria, some of them set by our regulator, and we follow the regulator's criteria with respect to who we do deeper levels of consultation with. This is not to say that we would exclude someone who had asked for information or deeper consultation. As opposed to maybe thinking that we would just mail out notifications, we actually meet with communities.
I talked a little bit about traditional land use studies and the traditional knowledge work that we do with communities. That's where we get some very good information.
We actually have had an opportunity to meet, as I said, face to face over 3,500 times since we started the project. That wasn't by way of notification.
If you're interested, we can certainly share information about the kinds of consultation and notification, if that would help. We have that information available. I don't have it at my fingertips, but I'd be more than happy to share what we've filed with the NEB.
Senator Bovey: Thank you. I would really like to have a summary of that information. I think it would help me understand the work you've done.
Ms. Favel: Thank you. I would like to provide that.
The Chair: In both cases, I think Senator Saint-Germain also asked for some documents. If you can pass them to the clerk, the clerk will share the documents with the members of the committee.
Senator Mercer: As a general comment, one of the problems of being in politics is that we always have to answer one question, particularly our colleagues in the House of Commons: What have you done for me lately? That is the question voters always ask. If you have been a great government — or they think you are — or you've been a bad government, it doesn't matter. They have to know what you have done for them lately.
I think this is an adage you people should start to remember, because one of the things you don't talk about — and particularly when you go to get approval in the Montreal area — is what have you done for me lately? What are the job situations?
When the committee met in Montreal, I was interviewed by a local radio station, and they asked me about the objection of the Mayor of Montreal to the pipeline. My answer to that question was that Mayor Coderre is going to answer to the unions in his community as to why he is against jobs for their members. Why is he against construction of long-term jobs for Quebecers?
No one has yet provided us with the numbers in construction, in long-term management and maintenance of those pipelines and the long-term local benefits that it will have. I suppose in a community like Lac-Mégantic we won't have any difficulty explaining to them the value of a pipeline over rail. But there is a need to consolidate this down, to answer that question: What have you done for me lately?
[Translation]
Mr. Bergeron: In terms of Quebec, we've created a new team and we often organize meetings in the field. In the last two and a half months, I have met with over 30 mayors. These have been very positive meetings in which we've developed relationships of trust. In some regions, there are very specific issues, in particular the location of a pumping station. The citizens would like the station to be moved. We're working closely with our engineering team. In the past year, we've moved three pumping stations.
Regarding the CMM issue and Mayor Coderre, the mayor has asked us to go back to the drawing board. I spoke earlier about the Ottawa River crossing. Several other factors were mentioned, such as the deforestation issue. We've developed a deforestation program that aims to reforest at least one hectare for each hectare of woodland cut down. We've identified other priorities in the CMM report, in particular in terms of agriculture. We've been holding discussions with the Union des producteurs agricoles, or UPA, to create a framework agreement that includes all the activities related to the operating and construction period. These are all initiatives that we launched about a year ago, and the projects are going well. In 2017, we plan to return to the table with the CMM to report on our progress. I'm convinced that we'll start discussions in the spirit of cooperation.
The Chair: Thank you, Mr. Bergeron. Before moving on to the second part of our meeting with the committee members, I want to thank you for your presentation. In the coming weeks, you'll have the opportunity to see the release of the final report.
[English]
As you know, we're going to go in camera, so if senators agree, we will keep the personnel and senators in the room, but everybody else will be asked to leave the meeting, if you don't mind. Do you agree?
Hon. Senators: Agreed.
(The committee continued in camera.)