Proceedings of the Standing Senate Committee on
Energy, the Environment and Natural Resources

Issue 14 - Evidence - December 3, 2009

OTTAWA, Thursday, December 3, 2009

The Standing Senate Committee on Energy, the Environment and Natural Resources met this day at 8:05 a.m. to examine and report on the current state and future of Canada's energy sector (including alternative energy).

Senator Grant Mitchell (Deputy Chair) in the chair.

The Deputy Chair: Good morning. I want to welcome everyone in the committee room and those viewing this on television to the Standing Senate Committee on Energy, the Environment and Natural Resources. I am Grant Mitchell, a senator representing Alberta and the deputy chair of this committee. I am chairing the meeting today in the absence of the chair, the Honourable Senator Angus from Quebec.

Before we start today, I will go around the table and introduce those who are in attendance at the meeting. With us are Marc LeBlanc and Sam Banks are Library of Parliament analysts who give us tremendous support, research, insight and background into what we do; Senator Pana Merchant from Saskatchewan; Lynn Gordon is clerk of the committee and makes it run exceptionally well; Senator Judith Seidman is a relatively new senator from Quebec; Senator Daniel Lang from the Yukon; and Senator Bert Brown from Alberta.

On June 4, 2009, this committee asked for and received the authorization of the Senate to examine and report on the current and future state of Canada's energy sector, including alternative energy. We will also provide insight into the impact of climate change on our energy sector and future energy configuration. We are at the beginning of the study. Today is our seventh meeting on the subject.

I am pleased to introduce another excellent witness to join those who have already participated in our study. Our witness is Dr. Robert Evans. He is a professor of mechanical engineering in the Faculty of Applied Science at the University of British Columbia. He is a former director and current member of the Clean Energy Research Centre of the University of British Columbia. He holds the position of Methanex Professor of Clean Energy Research.

Dr. Evans teaches undergraduate and graduate courses in applied thermodynamics, heat transfer and energy conversion. He conducts research on energy conversion systems, internal combustion engines and turbo-machinery. He was the inaugural director of the Clean Energy Research Centre at UBC that undertakes research on clean energy technologies with a view to providing sustainable energy for B.C., Canada and the world while reducing the environmental impact of the use of energy.

A particular interest of Dr. Evans is the intersection between energy technology and energy policy. This is a perfect application for the study that we are undertaking at this time. He is author of the award-winning book Fueling our Future: An Introduction to Sustainable Energy published by Cambridge University Press.

I would ask Dr. Evans to proceed with his presentation. Then we will open it up to questions from members of the committee.

Robert Evans, Professor, Mechanical Engineering, University of British Columbia: Good morning, honourable senators. It is a privilege and a pleasure for me to be here this morning. I would like to congratulate the committee on embarking on this study. It is a very ambitious and important study for Canada to look at the complete energy sector. I look forward to following your progress over the next two years that you will be working on this.

I have a presentation, and you have copies of it in paper form. I am sorry; there are many slides. I will go over many of them quickly. If there are questions, we can stop, and I would be happy to answer questions as we go along, or we can do that at the end. I am sorry for this bright blue colour, which is one of the UBC colours.

Senator Lang: There is nothing wrong with the colour blue.

Mr. Evans: I am glad to hear it. I will go fairly quickly, but if I am too fast, stop me and we can have some more discussion.

There are four ways to combat climate change, from my perspective. This will be a fairly top-level talk, looking at the basic concepts without drilling down too deeply into many of the details.

Just before we met, I was chatting with Senator Mitchell, and I said that I think this is really important for the general public to try to step back and understand the basics of energy use, how we use energy and where that energy comes from. Too often, we drill down into details without standing back and looking at the big picture, so I will spend most of my time talking about these big picture ideas.

I will say a bit about the climate problem. Although I am not a climate scientist or an expert in climate modelling, I am happy to field questions, if there are any. Also, I will talk a bit about what I see the problem being, together with the four ways to combat climate change, and deal more specifically with the technical aspects of that. I will introduce the energy conversion chain, which is an important and simple to understand technical concept that gives the background on how we use energy and how we might make changes in that.

Most of my time will be spent on the final point, talking about challenges and how we might move to a more sustainable energy system.

The main problems are global warming and energy resources. Our fossil fuel resources, which make up 80 per cent of the energy demand in Canada — in fact, 80 per cent of the demand worldwide — are being depleted. These are non-renewable resources, and, ultimately, they will be depleted. That is a long-term issue.

The last point on this slide is important and perhaps not as well understood as it should be. That is that people like using energy the way they do now and not having worry about it — such as plugging their computer into the wall and not worrying about where that energy comes from. They like getting into their car and driving wherever they want to go without worrying about that. That is a real issue as well.

The next two slides are plots of CO2 emissions from our neighbours to the south. The red bar is the Kyoto target that the U.S. would have had if they had signed onto Kyoto — 7 per cent below the 1990 levels. These levels go from 1990 out to 2007. There has been a continuous increase in CO2 emissions, with minor fluctuations, depending on the economy and the demand for energy, and on climate.

We sometimes feel that we know how to do these things better in Canada. Then you look at the Canadian chart below it. Essentially, you divide by 10 and get the same chart. You can see the steady increase in CO2 emissions, so we do not have much to brag about in that department.

Our Kyoto target, which we did sign onto — is 6 per cent below 1990 levels in the next couple of years. You can see that we will not reach that target. It will be a challenge to bring CO2 down.

From my perspective, we can do only four things to reduce the CO2 contribution that comes from using fossil fuels for 80 per cent of our energy needs. The first thing is to use less energy. These are largely lifestyle changes. People can walk, ride a bike or take transit rather than driving their car, for example. They can turn the thermostat down at home. It is just individuals using less energy. It sounds simplistic, but it is often difficult to get people — especially millions of people — to change habits of a lifetime.

The second important point is to use energy more efficiently. There is a great deal of waste in the way we use energy now, and we could increase efficiency. This is often called the "low-hanging fruit." It is probably not the most exciting aspect if you are an engineer working in the business, but it is where the biggest bang for your buck likely comes from — increasing energy efficiency, such as in building energy use, for example.

Potentially, we can capture and store CO2. I know we have senators from Alberta here. This is a hot topic in that province, and particularly in other fossil-fuel-producing regions of the world. I will say a little more about that, but I am not an expert in this area.

The challenge, as I see it, if you look at our oil consumption, for example, is that one third of Canada's energy consumption is in the form of oil. Essentially, all of that oil is used for transport applications, and you will not be able to capture and store CO2 from moving vehicles. A huge chunk is not amenable to carbon capture and storage.

Natural gas makes up another one third of our total energy consumption in Canada. Most of that is used to heat buildings such as this and individual homes across the country. Again, you will not be successful in capturing and storing the carbon dioxide provided in those applications.

You are left with a relatively small use of fossil fuels in large stationary power plants, for example, or big central plants, and the CO2 emitted from processing plants — from oil refineries, oil upgraders and similar things. A huge portion of fossil fuels, by far the majority, simply is not amenable to carbon capture and storage.

The final point, which I will spend more time on, is that we can switch away from fossil fuels to the other two sources of energy. Only three sources of energy exist: fossil fuels, renewable energy and nuclear power. Everything we do comes from one of those three sources. Therefore, the other approach is to try to switch away from fossil fuels to renewables and nuclear power.

That brings me to the energy conversion chain on the next two slides. Slide 9 is the only technical slide I have; it is the only mention of thermodynamics at any point in my presentation, I am sure you will be happy to hear.

The concept of energy use is not well understood by the public. The fact is that energy does not disappear. There is a fixed amount of energy, and we are always converting it from one form to another for our needs. For example, we take the chemical energy stored in fossil fuel, burn the fossil fuel and break the carbon-hydrogen bond, extracting that energy. The result is mechanical work, for example, to drive a vehicle, and then the energy is left over as very low-grade heat. That is not available for our use because it is too low grade.

Slide 10 looks a little complex, but it is a very simple concept. I like to use this to picture how we use energy and how we get from the primary source of energy through to the end needs and where we use the energy ultimately. If you start with the block in the top left-hand corner, these are the primary energy sources. Again, there are only three — fossil fuels, nuclear energy and renewable energy.

Everything we do is down in the bottom right-hand corner. That is where we need energy — to provide our transportation, fuel our industry and heat and light commercial and residential buildings. For everything we do in that bottom right-hand corner, the energy ultimately must come from one of those three sources in the top left-hand corner.

You can trace it through the chain to see what happens when we take these conversion steps. If you start back at the energy sources, first you go through a processing step. I will use oil as the example. Ultimately, we use that to power a car. The oil is processed in a refinery and turned into an energy carrier.

Today, we currently use only three energy carriers. After the processing step, the oil is turned into gasoline or diesel fuel, for example. That is one of the carriers, the petroleum products. The other two carriers we use are natural gas, which just has a little processing to remove sulphur and impurities, and electricity.

I have a question mark there next to hydrogen because that has been one in the news over many years. I will spend a bit more time talking about that and trying to explain why hydrogen will not be a significant energy carrier in the future.

If we go from those three carriers, often we want to store the energy. The fuel tank in your car stores the gasoline, and then you take that stored energy and go through a final end-use conversion step. The engine in your car converts the chemical energy in that gasoline into mechanical work and provides transportation. It is a very useful concept. Any use of energy can be pictured on this chart.

Every time you go through one of these conversion steps, there is an efficiency penalty. At each step in this chain, a loss of available energy occurs. If we start with 100 units of energy in crude oil to power your car, by the time it pushes your car down the road, you are getting about 20 per cent of that to drive your car down the road. The rest of the energy gets lost in the form of waste heat.

Slide 11 is a complex one. You may well have seen that. I will not spend time on it unless you have are questions. It is produced by Natural Resources Canada, NRCan. If you are an engineer, this is a nice snapshot of the complete energy economy in this country. This started with the U.S, who put out a similar chart. It shows the primary sources on the left and our end uses on the right, and you can trace through the energy conversion chain.

You see 80 per cent. The width of the bars is proportional to the amount of that source of energy. The wider the bar, the more energy that comes from that source. You can see that we are major exporters of uranium and oil, for example.

If you go to the far right-hand side, you will see that there is useful energy and then the lost energy. The small amount of useful energy is what we end up using to drive our cars and heat our buildings, and the lost energy is the losses due to those efficiency penalties I was speaking about.

If 80 per cent of our energy now comes from fossil fuels, how might we switch from fossil fuels to something that might be more sustainable? I will just speak on two points, but I would be happy to answer questions on others. I will say a little about renewable energy and then spend more time on the so-called sustainable transportation option.

I will not spend much time on the renewable options on the next page. I have a list of them there, in no particular order, although I am from British Columbia, where hydroelectric power is very important, as it is in Manitoba and Quebec. We have tremendous potential to expand hydroelectric power if we want to do so. Then the other main sources of renewable energy are shown, with varying levels of economic acceptance to them.

I will not spend any time on the pictures. They are just there as part of the slide show. The hydroelectric dam happens to be the Revelstoke dam in B.C., for example. If you turn the page, I have a picture of an offshore wind farm just off Copenhagen, where the meeting of the Intergovernmental Panel on Climate Change, IPCC panel, or the 15th United Nations Climate Change Conference, COP15 panel, is meeting next week. I presume delegates will be able to look out and see that wind farm.

Several of the slides show solar energy installations in the United States. The United States receives a great deal of criticism for not acting much on this, but they have spent large amounts of money demonstrating some of these renewable energy sources.

For example, the first slide shows photovoltaic energy, a 4.6 megawatt station out in the Arizona desert. The next two slides show a different way to generate electricity from solar energy using solar thermo-processes, where the energy from the sun is focused into a single point and is used to boil water or another fluid to generate electricity in that way. We can come back to that if there are questions.

Slide 20, headed "Intermittency," shows the key issue with most renewable resources, and that is that they are intermittent. Simply put, the wind does not blow all the time and the sun does not shine all the time. That causes a real problem. To try to overcome that, we need backup power. However, to build big facilities just to generate power when the wind is not blowing is very expensive. Ideally, we would like to have energy storage. Electricity storage is problematic. I will say more about batteries in a couple of minutes.

We should be very proud that, in Canada, we have significant energy storage, essentially electric energy storage. Slide 21 shows that; I call these the world's biggest batteries. Canada has two out of the three biggest batteries in the world. By "batteries," I simply mean water stored behind a hydroelectric dam, which is then usable as energy storage. I think it is not well understood in Canada that probably the most important aspect of our hydroelectric stations is the energy storage rather than the generation capacity. Both are important, but the storage is a phenomenal benefit.

In B.C. we have Williston Lake, which is the largest lake in the province. It happens to be a man-made lake. In Quebec, Manicouagan is almost twice that size. The size here is simply the storage of water behind that dam in cubic kilometres. These are very large bodies of water.

The beauty of that is that if you want to incorporate wind power in your system and you have this amount of storage, for example, when the wind is blowing, you can shut down the hydro turbines and then the energy is stored in the water behind the dam. When the wind stops blowing, you can turn on your hydro-generators. We do have that type of storage capacity, and that means that we could integrate in those areas where we have big hydroelectric capacity significantly more of the intermittent renewables.

Now I will spend some time on the sustainable transportation option. That is just one use of energy, of course, but it is a significant one. Nearly all of the oil goes into transportation, whether it is road or air transportation. That is where we can make real inroads in moving away from fossil fuels, if indeed that is what we decide we want to do. The transportation problem is really an energy problem. It relies almost entirely on fossil fuels, and, as I mentioned previously, you will not be able to capture and store carbon dioxide from moving vehicles.

The next set of slides, which use that energy conversion chain approach, show that we probably need a new carrier for transportation. If we use gasoline and diesel fuel, all of the carbon ends up as CO2 from the exhaust of the vehicle, and we can do nothing to try to capture that in a cost-effective way.

I apologize for the little cartoon at the bottom. That is the cartoon I use in my public slide to show where we are today. I am sorry if there are oil people in the crowd. I know it does not really depict an oil refinery and how that works, but it is the cutest slide I could find. The vehicle on the right is not Ford's latest SUV, but it is not far from it if you see some of the vehicles we have on our roads today. That is where we are today, and we need to get somewhere else.

On the next slide is one proposal. It is generic, but it is starting with a sustainable source of energy now, not fossil fuels. I have chosen to show photovoltaic electric power. The proposal from enthusiasts for the hydrogen economy, for example, is to take that electricity and convert it into hydrogen. You would electrolyze water. That is the next step. Then you take the hydrogen and store it. You can compress it or liquefy it and store it. Then you put it on board a fuel cell vehicle and turn the hydrogen back into electricity.

The key point here is that in this part of the energy conversion chain, you have electricity coming in at the outset, as an energy carrier; you are converting that into a second energy carrier, hydrogen; and then you are converting the hydrogen back into the first energy carrier. It is a complex process, and a drop in efficiency occurs at each point in the chain. I will come to that in a minute.

The next slide shows how maybe we can do that differently. The slide shows an electric battery. It is the same situation. You have electricity coming in as your primary carrier, you have electricity going out; and you simply store the electricity in a battery, a simply electric vehicle.

The next two slides are comparing those two routes. Slide 29 is what I call the hydrogen battery. The whole hydrogen economy, at least for vehicles, is predicated on the fact that you have electricity in, electricity out, but you have hydrogen as the intermediate carrier. That is exactly equivalent to just having an electric battery.

Why would we not want to use an electric battery? It seems much simpler. The problem is that batteries are not very good at storing energy. They have very low energy density.

If you turn to slide 30, you will see a comparison, in energy terms, of those two approaches. This is the "in-out" efficiency, in other words, the efficiency from taking the first carrier in, electricity; and the second one out, electricity to drive the vehicle. If you use the hydrogen fuel cell storage, today the efficiency of that process is about 65 per cent. You have a compressor to store the hydrogen that might have an efficiency of 90 per cent, and the fuel cell has an efficiency of 50 per cent. To get the efficiency from the electricity coming in and the electricity out, you multiply those together, and it is about 33 per cent; it is about a third. In other words, of the electricity going in, you only get a third of it out to drive the vehicle.

If you look on the right, the battery is at about 90 per cent. A battery is an efficient way to store electricity. If you went with the left-hand side, the hydrogen conversion chain, you would need about three times the amount of the primary energy up front as you would simply using a battery.

Turning to the next slide, a battery electric vehicle looks attractive from that point of view. The problem is that the batteries are not good at storing energy so the range is limited. The batteries are heavy and range is limited. These have fairly limited applicability — golf carts. I think we will see more electric commuter vehicles just for use running around in town and so on. However, for most individuals wanting to get in their car, commute to work and perhaps on the weekend drive to the cottage or visit relatives, a battery vehicle will not do it. The range is too limited.

The next iteration of that will be plug-in hybrid vehicles. I am sure you have heard about these, and I believe these are coming. This is where you have a battery electric vehicle, but you also have the engine and a generator so that when you do not have enough energy in the battery, the engine will come on seamlessly and power you and get you to where you are going.

Over the page, again, these are some results from studies. I will quote the results from the many studies done on this concept by the Electric Power Research Institute, EPRI, in the U.S. At the very bottom line of the slide, the PHEV — plug-in hybrid vehicles — shows 60, which means a 60-mile or 100-kilometre range on the electric portion only. Using the energy stored in the battery, you would get a range of 100 kilometres; the rest of the time you would use gasoline. By doing that, for a typical driving cycle, you would have an 85 per cent reduction in CO2 from that type of vehicle. It is not zero, but it is a huge reduction and a big advance.

We will see these cars. I am sure you have seen General Motors advertising the Volt, which they say will be in production in 2010. They are a long way with that technology. Other automakers are working on that technology.

The next slide is particularly important for Canada. In the past, people have said that individuals will not want to plug in their cars. They will not like electric or plug-in vehicles because you have to plug the car in every night and charge it up. I have never understood that. I do not think that is a big deal. Look at where we are in Canada with our electricity prices, at least in B.C., and I think it is the same in the much of the rest of the country.

As just a quick, back-of-the-envelope calculation, if we use electricity, my residential rate is 6 cents or 7 cents per kilowatt hour. That is the equivalent in energy terms of 60 cents per litre of gasoline. If you use electricity the same way as you use gasoline, the equivalent cost of electricity is 60 cents per litre. However, the electric drive train in the electric car is about four times the efficiency of a gasoline-powered car because that battery releases 90 per cent of the energy that you put into it, so the effective cost to drive the car would be 15 cents per litre. When the average person understands that they can fill up their car at 15 cents per litre as opposed to $1.10 or $1.20, as it is out West, it is a no-brainer. They will love these vehicles. This calculation does not include taxes or road tax and so on, but you could easily double the price with taxes and it will still be significantly less than the cost of gasoline. Will people want to plug them in? I think once the cost of this is understood, yes, people will accept these very well.

There are significant benefits to the utilities from having load levelling. Load levelling means utilities have peak demand. At the time of day when people get up and go to work, there is peak demand on utilities, and also when they go home at night and cook dinner. They have to provide equipment for all this demand. Relatively little use of electricity happens in the middle of the night, so there is a big trough in the demand. Utilities would like to have a nice level demand across the day. That makes for more cost-effective use of their equipment.

The fact is that these plug-in hybrid vehicles will be plugged in primarily at night for most people, so the demand at night will increase for the utility and make much better use of their generating capacity. I know utilities are very receptive to this. I gave a general talk similar to this a few years ago in California, and a gentleman there responsible for regulating the California utility system said that they cannot wait for plug-in hybrid vehicles. Their utilities will love the load-levelling capacity this will give them.

Particularly for Canada, with sustainable electricity, we have many options; certainly with the first two, hydro and wind. We probably will not use solar power too much here compared to the U.S. and maybe Middle Eastern countries. We do have some geothermal capacity. However, by expanding our electric rapid transit, for example, subway systems, the SkyTrain the Vancouver, and electric trolley buses — again in Vancouver — we can move our system towards electricity. The next slide is the plug-in hydroelectric car, an artist's impression of the GM Volt. We can move from fossil fuels much more toward electricity as the primary energy carrier for transportation. There is electric heat using heat pumps, and this technology is an effective way of using electricity and is about three times the efficiency of using electricity through baseboard heaters for heating buildings. We should be using more of that. Canada can be a showcase for what I am calling the new "electricity economy." I do see electricity becoming much more important as an energy carrier compared to refined petroleum products, for example.

Chair, I have gone on a long time. I have a couple more slides on global energy projections.

The Deputy Chair: We have until 10 o'clock. You are our only witness. We have showcased your testimony, and we would like not to cut you off.

Mr. Evans: Some time ago, I looked at global energy supply. When I wrote the little book that you kindly mentioned, it was based on global energy consumption. I am an engineer, not an economist or a forecaster, but I wondered how our energy supply might look in 100 years time. I have two scenarios. Again, I am not an economist and this is back-of-the-envelope stuff to get an idea of where we might be going.

The first slide is a clean coal scenario. This is probably not so applicable to Canada. About 11 per cent of our energy supply comes from coal. It is much more in the rest of the world. The Prime Minister is in China today, I believe, according to the news, and there they are building and opening a new coal-fired plant every two weeks. This is where we might use carbon capture and storage. If we were able to do that, how might our energy future look?

These slides show energy consumption from 1980 through to 2100, and the data up to 2000 is real data. Going down from the top, we have renewables, nuclear and then the three fossil fuels — coal, natural gas and oil. I simply plotted the real data up to 2000 as measured by the International Energy Agency, IEA. Then I made simple, engineer, back-of-the-envelope projections on where we might be going.

Total energy demand has been increasing internationally at about 2 per cent per year, compounded growth rate. The early part of that represents 2 per cent growth rate. Surely we can be smarter than that, so I brought it down towards the end of century. You see that even with that, global energy consumption is double by the end of this century, over 100 years' time.

The units, by the way, I like. The units are maybe not important, but it is gigatonnes of oil equivalent. It is all the energy that we consume converted into the equivalent of tonnes of oil. I like these units because the baseline in 2000 is 10 gigatonnes, so you can get a nice feel for that. My projection would be simply what would happen if we had this growth rate, 25 gigatonnes at the end of the century.

In this projection, the use of coal has increased significantly, and that is with the assumption that we will be able to do something about the CO2 emissions from that. Renewables have increased, and nuclear has increased a bit; natural gas has remained relatively constant in this scenario. I am saying, in this, that we will have about depleted our economic oil resources by the end of that 100-year period. Again, these are not forecasts or projections, just "what if" scenarios.

The second approach would be what if we think carbon capture and storage will not be cost-effective, or we are worried about how long it will stay underground, or we do not have sufficient repositories for it. We might then rely more on nuclear and renewable resources.

Therefore, the next scenario is a nuclear and renewable energy scenario where I show a large expansion in renewable energy — presumably that most of that will be to generate electricity — and a large expansion in nuclear power as well. We see this currently around the world, particularly in Europe where many countries are moving to nuclear power. Coal remains relatively constant because China will be burning coal for a long time. I kept the gas and oil scenarios the same as before.

Again, I hope you will not take these as projections or forecasts. It is simply a "what if" exercise.

This leads me to the last slide. I have put together what I see as priorities for Canada, more or less in the order I would see them. In looking at a transcript from a previous witness, he was asked if he were the prime minister, what he would do. This is my list of seven things that I would do if I were appointed prime minister tomorrow, although we need not worry about that happening.

Increasing energy efficiency is a low-hanging fruit. It is hard work and not terribly glamorous. We should move toward the electricity economy. Electricity will be a much more important energy carrier for transportation as well as for other uses.

We have large capacity to expand hydroelectric power. We have the possibility in British Columbia alone to double our current hydro capacity without harming any fish rivers in the province. Environmental problems will always be a factor, and many people will be against any sort of development, but the physical capacity is there to double the production. I am sure that that is the case in Manitoba and Quebec as well. One of the real strengths in Canada is our potential for hydroelectric power.

We should be developing other renewable resources. I have listed them, though not in any particular order. We should be expanding nuclear power. There are issues with this, but much of the rest of the developed world is expanding nuclear power. I studied in the U.K., and my first job was for the electricity authority in the U.K. After a long time of not building any nuclear plants since the early 1980s, the U.K. has said that they will build at least 10 new nuclear plants. France has always been the leader in nuclear power. Over 80 per cent of their electricity comes from nuclear sources. They are continuing to expand that.

We should investigate carbon capture and storage. There will be application for that. Much uncertainty still exists, but I am not an expert in this.

Finally, and perhaps it should not be last, promote a reduced-energy lifestyle. This is not something engineers are good at. We need to motivate individuals to reduce their energy consumption. This could be number one. This should be part and parcel of increasing energy efficiency.

Thank you for your attention. I would be happy to answer any questions you may have.

The Deputy Chair: Thank you. This was very clear.

One of our objectives is to assist Canadians to come to an understanding of the issues involved in energy consumption and supply, et cetera. These are issues generally seen to be very complex. We are looking for a way to clear away that complexity. Your presentation proves it is possible.

Since we began, two additional senators have joined us. We have Senator Sibbeston from the Northwest Territories and Senator Kenny from Ontario. I welcome them.

Senator Brown: Thank you for your fascinating presentation.

My question is about electrolysis. You said that by electrifying water, we could obtain 34 per cent efficiency. Is that correct?

Mr. Evans: That is the hydrogen we can get from the whole chain in electricity production. Electrolysis itself, simply to produce hydrogen is about 65 per cent efficient. In other words, 65 per cent of the energy from that electricity is in the form of hydrogen, which you can burn or run it in a fuel cell. If you use a fuel cell, that is another 50 per cent efficiency, so you multiply these together. At the end of the day, the efficiency of the electricity coming in and going out of the vehicle is about 33 per cent.

Senator Sibbeston: I know that carbon waste is measured in tonnes. My primitive mind has a hard time imagining a tonne of carbon. Is this only a theoretical idea? Have you ever seen a tonne of carbon?

Mr. Evans: No, I have not seen a tonne of carbon; you may be referring to carbon dioxide. It is not theoretical, it exists. The simplest way to look at it is to take natural gas, our simplest fossil fuel. It is 95 per cent methane, which is a simple molecule, CH4. If you burn the CH4, all of the carbon combines with the oxygen we use to burn it and turns into CO2. If you have enough natural gas, it would indeed weigh a tonne. Burning that tonne of natural gas produces almost three tonnes of carbon dioxide. We use many millions of tonnes.

Although it is in gaseous form, mass is associated with this, and it has weight. That is simply a physical fact. I know it is hard to conceptualize these things. If you had a pressurized container, put it on a scale and pumped in gas, you would see the weight on the weigh scale. Indeed, mass is associated with it.

Senator Kenny: The question is really which is heavier, a tonne of feathers or a tonne of carbon dioxide?

The Deputy Chair: As always, providing insight.

Senator Seidman: It was a great presentation, especially for someone such as me who is new to this committee.

Two witnesses earlier this week said clearly that we will not have alternative clean-energy renewable substitutes for fossil fuels to any degree even by 2020. They said that it is highly likely that much of what we need in the area of new clean-energy technology has not even been developed yet.

I am from Quebec, and I am particularly interested in the future of hydroelectricity. Perhaps you could comment on new technologies, where we are positioned going forward and challenges presented in the use of hydro. You referred to load levelling, smart grid, the challenges we face with Canadian weather and the blackouts we often encounter.

Mr. Evans: I will start with the last part, the challenges of producing more renewable energy. We are fortunate in British Columbia, Manitoba, Quebec and Newfoundland and Labrador to have great potential for more hydroelectric power. Many political issues are associated with developing more energy of any type in the country. This is one of the challenges. It takes a long time to bring new resources on stream.

I would argue that new technology does not need to be developed; hydroelectricity is well-known technology. It takes a long time to get the approval to build plants and move ahead.

The technology for using that to replace fossil fuels is coming. The first thing that we will see will be plug-in hybrid electric vehicles. There is no question that it will take time to get those into the marketplace. We will see changes by 2020, but not huge changes. I would hope that we would see significant changes by 2050, for example. If we move down this route to electricity economy by that time, we will see significant replacement of fossil fuels by electricity. Then we need to develop these renewable sources.

It can be hydro power, more wind power, solar or geothermal; we have many potential sources. Worldwide, we will see a big expansion of nuclear power, as well. It probably takes at least 10 years for the approval and building of a new nuclear plant, so there will not be a huge change by 2020. It is not that far away.

I missed the first part of the question.

Senator Seidman: You have answered much of it. You are saying that the technologies exist, that we do not need massive R&D to develop new technologies to replace fossil fuels.

Mr. Evans: I would say yes and no. Basic research needs to be done; and as a university researcher, I am doing that in my lab. I am doing mundane things to increase the efficiency with which we use fuel in engines. We will have engines for a long time. Despite the general thrust of my presentation, we will still be burning fossil fuel for a long time to come, so we do need to do that more efficiently. My day-to-day research is increasing the efficiency of the way we use those fuels in engines.

The technology is coming for electrification of the transit system through these plug-in hybrid vehicles. It is early days; we do not have them commercialized yet. Most of this work is being done by the automakers. They are all working on this. The only unknown is how effective the batteries will be. The existing straightforward hybrid vehicles are setting terrific precedents. For example, the Toyota Prius, the best known of the conventional hybrid vehicles, has been far more successful than even Toyota suspected. The batteries have been much more reliable. Most of the taxis in Vancouver are Prius taxis. That is a pretty rugged application of that. I have talked to the odd taxi driver, and they are very happy with this.

The next step is to increase the size of the battery a bit and charge it up by plugging it into the wall at night. The technology is there, with some uncertainty about the market penetration of that technology.

I think your witnesses from Alberta were mainly talking about carbon capture and storage. I am perhaps less keen on that because it will not be applicable to mobile sources, and that is where most of our oil is used. Uncertainties still remain for that.

The capture of CO2 is well established — conventional chemical engineering technology. It is expensive when handling huge volumes of gases. You can imagine the volume of many tonnes of a gas, which means very large, expensive pieces of equipment. However, it is known technology.

To me, the unknowns — and I am not an expert in this, by any means — are where the repositories will be, whether they will be sufficient and whether the CO2 will stay there for the length of time we need it to. Much more research needs to be done on that before we can say that this is viable technology for any significant quantity.

It is being done now. CO2 has been used for a long time in enhanced oil recovery, where oil fields are flooded with CO2 to expedite and push the oil toward the well. Some of it comes up with the oil as well. Storage is being done in Norway, for example, where they have gas fields offshore and are storing some CO2 underground.

Carbon capture and storage is being done in Saskatchewan, as we speak — one of the flagship IEA demonstration programs. However, it is relatively small, and it is early days. We need to monitor how stable that storage will be.

Senator Seidman: I will go back to the electricity issue because you are so keen on that and put a great deal of focus on it.

I would like to better understand the challenges about the loads on the grid and the tendency of our population to consume energy at the same time; and then we have weather challenges, of course.

Mr. Evans: That was part of your question. With respect to the load on the grid, if we expand down this electricity economy, we will need to strengthen our grid. We will need to build more transmission facilities, for example. That is always a challenge. However, our grids are pretty reliable, even though we have severe weather challenges, and we could expand the grid.

The other issue is using electricity for cars, which is so much more efficient than fossil fuels. The extra load on the utility is not as great as you might expect. If we take all the fossil fuel fuels we now use, 80 per cent of our use, and transfer it to the electricity load, that would be huge; but the use of electricity is four times as efficient as using gasoline.

The U.K did a study to look at the potential impact of having a 10 per cent penetration of electric vehicles on their grid. That is a significant penetration; it will be some time before we get there. The conclusion was that the existing grid could handle that in the U.K. I do not have numbers for Canada, but I suspect it is the same. However, for the long term, some expansion and strengthening of transmission distribution lines will be required.

Senator Merchant: I know you are not here to debate the climate issue, but you want to engage the individual person in your presentation. I think you have given us a picture of the important part each one of us has to play to make this work, and to wean us away from fossil fuels.

I think I heard yesterday — and I do not remember the exact numbers — some polling, where people are not really seized by climate change or global warming. I do not know which is which. I know this is not a debate about whether this is happening or not, but the words keep changing.

When we talk about climate change, I am not sure if that is exactly the same thing that they talk about in the different presentations. Is that synonymous with global warming? Climate change, to me, is something different than global warming. I am not sure that most Canadians believe that something is happening and that there is a need to change.

In your presentation this morning, you have to engage everyone. Your thesis is that when people see the dollar value of making the change, this will motivate them to do so.

A few years ago on this committee, we studied the One-Tonne Challenge. We were challenging Canadians to make these changes. We had advertising on television. The government had an extensive program in which they told Canadians about the small changes they could make such as using electricity in non-peak hours or using cold water to do your laundry instead of hot water — some of the things you talked about this morning. They were changes everyone could make. How much did that affect people?

Mr. Evans: I sometimes use the One-Tonne Challenge as an example of perhaps the one thing the government has done to try to get people to change their ways. I cannot tell you how effective that was, or if it was effective at all. I suspect it has not been terribly effective in changing peoples' ways.

The examples I look to are young people. Now I have grown children and little grandchildren. I remember when my daughter, in particular, was a teenager, recycling was just coming in. I am an old-fashioned guy and thought that this was a bit of pain. I wanted to take my newspaper and throw it in the garbage as I have always done. However, I was educated by my teenaged daughter.

I think it is the young people that have led this revolution, and now it is a recycling revolution. I am recycling with the best of them. I use that as an example of how if young people want change, they will lead the way in this. We will see significant changes by young people in using energy more responsibly and using less energy per capita. However, some of the changes that we are talking about will take hundreds of years.

If you were to poll young people, you would find that they think that climate change is coming, that it is at least in part manmade and that we need to make changes. I believe they will undertake some of these changes. It will not be so important for people my age because we will not be using energy that much longer. The revolution, as always, will be led by young people.

Senator Merchant: That is what we all hope, that we will all change slowly and maybe the younger people will lead that revolution.

Another thing to consider is whether these changes that we make have a net positive result. I have heard different reports about recycling. Recycling keeps bottles and paper off the streets and highways and gives us a cleaner environment in that sense. However, sometimes the energy it takes to recycle the materials is not a net plus. There are good reasons to recycle, but if we are talking about energy savings, sometimes it does not work out exactly the way we think it might work. Is that a fact or not?

Mr. Evans: I think that is right. You have to look at the complete energy conversion chain. Is what I am doing down here on my demand side having an effect upstream on the primary energy source? You can make that assessment for each application. We need to do a life-cycle analysis for both recycling and energy use; what the total life-cycle change or improvement will be if we change our way of life. That analysis is complex, but it needs to be done.

Senator Merchant: Currently, do you think the taxpayer or rate payer should be paying for the real cost of energy?

Mr. Evans: Individuals probably do not really notice the difference in whether they pay taxes or they pay more at the pump or for electricity. They just see the increased costs. I am not an economist, but I do think pricing works. Price is an important signal, and people do take notice of that.

As I understand it — again, not being an economist — energy demand is what economists would call inelastic. In other words, we really want to drive our car to get somewhere. If the price goes up at the pump, people grumble. I grumble, but I still fill up, and most people do. If they have to, they will make sacrifices elsewhere in their budget to continue driving to where they want to go. It is a challenge.

We now have a small carbon tax in British Columbia. People grumble about this tax. However, it is very small, and they put up with it. I am not sure that the carbon tax has had much change on people's behaviour yet.

Senator Merchant: However, as a rate payer, if you are reminded of the cost every day or every week, it stays front of mind, whereas if you pay your taxes at the end of the year, it sort of puts it off.

Mr. Evans: Yes. The issue with going the way of electric vehicles is the inverse price signal. The price is much less than fossil fuels. I think that will drive people toward that option, as long as the vehicles have the same effectiveness and drive the same as a conventional vehicle; and I see no reason why that will not be the case. The average person will get into one of these vehicles and not really notice whether the energy is coming from being plugged in at night or from the engine, to get you the longer range you need.

Senator Kenny: Before I get to the serious part, I would like to know how Dr. Evans gets his kids to take out the blue boxes.

Mr. Evans: I am afraid they have now left home, so I have to take out the blue boxes.

Senator Kenny: You just said that they were leading the way.

Mr. Evans: They did; they got me into the habit of doing it, so I am now doing it.

Senator Kenny: Has a new nuclear plant been licensed in North America in the last 25 years?

Mr. Evans: I am not an expert. In the last 25 years, I am not sure.

Senator Kenny: Seabrook Station was the last nuclear plant, and there has not been one since.

Mr. Evans: There has not been one for a long time, certainly not in Canada.

Senator Kenny: We look at the success in France. They have 80 or 90 reactors. We are not building them. We are frightened of them. Is that a realistic thing for North Americans to talk about?

Mr. Evans: Personally, I think we should be talking about it. I always say that there is no free lunch, no magic bullet; costs are associated with everything. The issue is whether more risks and costs are associated with building a nuclear plant, for example, than building a coal-fired plant and taking the carbon emissions and other emissions that come from that plant.

Senator Kenny: I agree with you. We have a plant in Seabrook, New Hampshire for which all someone has to do is turn the key and it will work. However, there is the psychological problem, namely, that Canadians and Americans will not go there after Three Mile Island, Pennsylvania.

Mr. Evans: I think that is right; perception is everything. France has taken a very different attitude. More than 80 per cent of their energy comes from nuclear power. As far as I know, no one demonstrates in the streets of Paris. It is well accepted there. Much of Europe is also moving that way. The Germans were shutting down plants, but they now have a hiatus on that and will probably be building more.

Senator Kenny: There is a metre in every kitchen that tells you whether you are buying cheaper or more expensive fuel.

Mr. Evans: I did not speak about that, but smart metres will be very important and beneficial. That is new technology that is available. It will be expensive to retrofit every home, but it is important.

Senator Kenny: My next question is about electricity. The fun of being in taxis in Vancouver is that you can watch the dashboard and see when you are switching from electricity to gasoline and back again. That is more fun than anything else.

The issue, however, is knowing whether the electricity being used is clean electricity. How do you get the full cost-effectiveness if the person producing the electricity is doing it in a dirty way and you think you are being a good citizen by riding in this taxi that is running most of the time on electricity? I know you know what I am getting at.

Mr. Evans: I do. If you are in a taxi in Vancouver, it is clean, green energy. It is hydropower. More than 90 per cent of our electricity comes from hydropower in B.C. You, as a consumer, do not have any control over that. If you are in Alberta, a significant portion will probably be coming from coal, for example. If we move to electricity, it is incumbent on the people building the electricity plants and expanding electricity to make that as green as possible. It could be coal, with carbon capture.

Senator Kenny: What premium would you put on people who are producing electricity in a dirtier way, by coal, and then moving it out into the system, giving people the impression that they have a cleaner system? Should there be an extra tax on those people who are essentially producing what looks like a clean fuel in a dirty way?

Mr. Evans: Yes. One way to approach it is a carbon tax. People using coal to generate electricity would pay a significant carbon tax.

Senator Kenny: Every time you say "carbon tax," I see shivers go up and down the spine of my friend over here; he does not like the idea.

Mr. Evans: Carbon tax or cap and trade. Again, I am not an economist. Economists know about these matters. I once asked an economist what the difference is really, since they would have the same impact. If we levy a significant carbon tax, it changes people's behaviour. As I understand it, we do not really know what the outcome will be and how much effect that will have. However, if we put a hard cap on emissions and regulate them saying that you must not emit more than a certain amount, and if you do, you must buy credits from someone else, then we get exactly the reduction we need.

Senator Kenny: Otherwise, the car stops.

Mr. Evans: Yes. However, it is a complex system involving much bureaucracy, which may or may not be a good thing.

Senator Kenny: We like bureaucracy here.

Mr. Evans: The carbon tax seems to me to be a much simpler approach. If I were the prime minister, I would put a carbon tax on carbon, such that if you burn coal or gasoline, you would have to pay a tax.

Senator Kenny: I am dying to hear your speech in Calgary.

The last point I wanted to raise with you is really a strategic one; it has to do with Canada being a net exporter of energy. In reality, the country is bifurcated; Eastern Canada is an importer and Western Canada is an exporter.

What thoughts do you have for the committee on the different approach that we should have toward energy, when just about everyone east of Sarnia is importing and everyone west of Sarnia has the security of being self-sufficient?

Mr. Evans: Are you talking about oil in particular?

Senator Kenny: I am talking about oil, but it includes all energy. In effect, all of our imports end up going to Eastern Canada. Unfortunately, the oil that is produced in Eastern Canada goes down to the Gulf for refining because it is too waxy.

Mr. Evans: We need to take a continent-wide approach to this. These are big issues, and we cannot be too insular. We need to have a global approach. We cannot be doing things here that are not coordinated with our friends to the south. I do not have a problem with our importing on one side and exporting on the other. The approach should be global, or continent-wide, to reduce our carbon footprint.

Senator Kenny: Economically, that works well. Certainly, something that stays within the North American sphere makes sense. However, when you are shipping oil from Canada to the Middle East or from South America, that is not very secure oil under some world conditions. One of our objectives needs to be to look far enough ahead to think how we will provide that energy to those parts of the country in a time when shipping does not come easily.

Mr. Evans: Yes. This is really not my area of expertise. Those are questions for economists rather than engineers. I hope that, over time, we will reduce our demand particularly for oil as we move toward electricity, and we have some real advantage in this country to generate that electricity. That is one issue.

In terms of security of supply, if there really is a reduction in demand for oil globally, then we will have sufficient production in Canada. We would need the infrastructure to move it across the country, and perhaps more pipelines if we felt that was important. That is expensive to do, but it can be done.

Senator Kenny: We ask engineers because economists say, "On one hand, and then on the other hand." Engineers just give us an answer.

Mr. Evans: I am doing my best on engineering issues, not so much on economics.

Senator Lang: I would like to thank the witness for the clear and concise message he brought here. I think most of our listeners could fully understand where you started from and where you think we should go.

Mr. Evans: Thank you.

Senator Lang: It is nice to see a presentation such as that.

We did a fact-finding trip to Washington a number of weeks ago. It was a very interesting trip for all of us. Those who went all learned much. What came home to me, and I think it is important to anyone listening out there, is the fact that for all our energy that we produce, we provide the United States with 77 per cent of their imported energy, including electricity, uranium, gas and oil.

I want to correct the record here: East of Sarnia, for my good friend, Senator Kenny, a huge volume, as he knows, of electrical energy is exported to the United States via Quebec and Labrador for that eastern seaboard. In fact, just to correct the record, the position that Alberta takes is interesting. When they go down to the United States — so that the Americans understand how dependent they are on us — they say that the lights on Broadway are turned on by oil from Alberta. That brings a picture home to anyone that has been there.

In your presentation, and this is more of a technical question, you talk about the hybrid vehicle, and you speak of the use of batteries and that they are 90 per cent efficient. The one aspect that I do not see factored in there is the energy required to build batteries. That, to my understanding, is considerable and expensive. Is that not correct?

Mr. Evans: Yes. Again, I am not an expert in that. I am certainly not an expert in batteries. One needs to take a look at the life-cycle energy of this. The Prius, for example, has had very few battery replacements. You build it once, and it runs for many years. That is the hope for the new batteries coming on as well. We need to look at the overall, complete life-cycle energy use. Thus far, that is very positive for battery vehicles. It does take energy and materials to produce a battery.

Senator Lang: I point that out because it is important that we put all the costs in relationship. I am certainly not against it. It makes sense.

The other aspect we talk about is the cost per litre that each consumer would pay because plugging their vehicle in would be considerably less expensive than buying gas at the pumps. On the question of costs looking ahead, the volume and the increase in population, and the requirement for new megaprojects to provide that electricity, when most people plug into the wall, they do not have a clue where that electricity comes from. Following that through, as you said, we will need nuclear plants or larger electrical plants, which will be significantly costly and have a long-term life-cycle cost attached. Per litre, you will be looking at substantially higher costs. Is that not correct?

Mr. Evans: Most definitely, yes; the price will go up. We have historically low electricity prices in Canada. One should use the marginal cost of producing electricity. Even at those rates, at the equivalent of 15 cents per litre, you can double the price of electricity to consumers, and it will still be to their benefit to use electricity for their vehicle. Yes, there will be costs, and the costs of electricity will go up, as well as for transmission distribution systems. There is no free lunch. If we use energy, we have to pay the price. Presumably, people will not be buying as much oil, for example.

Could I just quibble a little with the example of oil turning on the lights on Broadway? I do not actually think that is the case. Oil goes down there, but I do not think anyone is burning oil to generate electricity. That is another issue.

Senator Lang: All I am telling you is what we were told from the representative from Alberta. It was the man from Alberta who told me that.

The Deputy Chair: Let us stop picking on Alberta.

Mr. Evans: The oil will be used for gasoline and diesel fuel.

Senator Lang: Going further on the question of the carbon capture, if I could, I do share a concern here because we seem to have a large amount of faith in future innovation and technological change. You expressed, to some degree, a reservation as to where this will go. Do you have any thoughts about what time frame we are looking at for a decision to be made on whether this is viable?

Mr. Evans: I do not have an answer for that; I am not an expert. It is being done. Thus far, it is viable in Saskatchewan, but this is at a very small level. The problem is that this must be stored for thousands of years, ideally, and we do not know that with certainty. Depending on the repository, in some cases, it will be much more secure than others. You would be able to talk to geologists and try to get a feel for that.

My issue with it is that there is some uncertainty on that aspect, but most of our fossil fuel use is not amenable to carbon capture. Oil, for example, being used for mobile applications, we will not be able to use carbon capture and storage for that. It is a relatively small portion of our fossil fuel use, the stationary use of it, such as processing plants, where it will be possible to use carbon capture and storage.

Senator Lang: I want to refer back to natural gas. I noticed you highlighted coal and did not really emphasize a further use of natural gas in our generation of electricity more so than perhaps what we normally do. I would have thought it would have been more advantageous from an environmental point of view to use more natural gas and have less dependency on coal generation.

Mr. Evans: It is more environmentally advantageous. The carbon-hydrogen ratio is much better in natural gas, resulting in fewer CO2 emissions. In the past, the issue has been that natural gas is a high-value fuel and coal is a low-value fuel. The companies talk about reserves-to-production ratio. We have about a 40-year supply of oil in the ground today at today's consumption rate. We have about 70- or 80-years worth of natural gas and 200-years worth of coal. No one worries too much about exploring for more coal. However, with oil and even gas, people say that they are high-value fuels and that we should just be using them for home heating and industrial processes. With shale gas coming on-stream, maybe some of that concern has gone away a bit. We have huge, new potential sources of natural gas. This is keeping the price of natural gas down. I am sure folks in Alberta are not terribly happy about that, nor are they happy in parts of British Columbia. I think we will see more use of natural gas for power generation. If it replaces coal, that is a good thing.

The Deputy Chair: Senator Kenny, do you have a supplemental question or do you want to be on the second round?

Senator Kenny: I have a couple of questions for Senator Lang. I want to know what oil line runs from Alberta to New York. I would be happy if he would enlighten me.

The Deputy Chair: Senator Kenny, this is not a debate amongst us.

Senator Kenny: He mentioned that he was correcting me. If he did not mention my name, I would not be commenting, but he did mention my name. Having spent 20 years on this committee and having worked in the energy business, I am simply curious to know which line runs from Alberta to New York. He does not have an answer.

The Deputy Chair: I will intervene here. I have a question before going to the second round.

Senator Kenny: I had a second question, Mr. Chair. Had Senator Lang read any of the Organisation for Economic Cooperation and Development, OECD, reports on the Canadian energy situation, which come out each year, he would see the bifurcation between the two halves of Canada. I would commend it to him. It is a serious problem.

The Deputy Chair: It is one of the problems on which we are working. It will be a topic of discussion because we know that we are exporting on one side of the country and importing on the other, which is problematic.

In defence of Senator Lang, he was promoting Alberta's interests, and I thank him very much. Another point to the chair of the Defence Committee, Senator Kenny, is that Alberta oil derives the fuel for the fighter jets based in Minnesota. We are fuelling U.S. fighter jets and that should be reassuring to you.

Dr. Evans, we have kept you going for quite a while. If you still have energy for this — pun intended — I hope we can continue.

Mr. Evans: I am at your disposal.

The Deputy Chair: You were talking about nuclear issues with Senator Kenny and how people fear that. It dawns on me that we are complacent about climate change and its consequences. This was Senator Merchant's point. We probably should fear those issues, but we are not. It takes us to a broader point, which is that governments are constrained by this lack of understanding in finding the political will to act. If people really understood this issue, there would be the room and space to ask people to do what must be done.

Dr. David Schindler is a remarkable internationally-renowned scientist — originally a water scientist from Alberta — who has won an important scientific award. You probably know him. He has said that we are simply not doing enough. We do not understand the consequences. It comes down to the range of public policy and what government needs to do.

I have two questions that follow from that. First, as a researcher, government will need to intervene in certain ways. It will probably involve regulation and setting caps but also to use incentives for research. Where do you think government could best support the efforts of alternative energy and energy-efficiency researchers such as you?

Mr. Evans: As a researcher, increased grant funding is always welcome. There is a real need in this area. Frankly, our federal government has made available significant new funding. For example, the Canada Foundation for Innovation has provided the funding for our new clean-energy research lab at UBC. That was wonderful and has been very welcome. Often, capital investment has good funding. Individual researchers do not have the level of funding that we would like to see.

It is relatively easy to get capital funds to build new facilities. It is more difficult to get ongoing operating funds. Our friends in the United States and most of Europe have easier access to research operating funds, to pay graduate students or the ongoing cost of research, for example. I would look toward that area to expedite some of the research activity in Canada.

The Deputy Chair: Therefore, researchers in addition to capital.

Mr. Evans: For example, an increased budget to the Natural Sciences and Engineering Research Council of Canada, NSERC, would be helpful to pay for operating costs for research.

The Deputy Chair: Do you see this as a separation that has occurred because of jurisdictional imperative? For example, the provinces might be seen to be responsible for researchers whereas capital funding is more applicable to federal jurisdiction.

Mr. Evans: I do not think that is a big issue. Most of our funding for the ongoing cost of research at the university is federal funding from NSERC, and now capital funding comes from groups such as the Canada Foundation for Innovation. The Sustainable Development Research Centre initiative provided significant funding for industry as well as academia. I do not think there has been an issue between federal and provincial funding.

We would welcome increased research funding from provinces as well as from the federal government, but we are realistic.

The Deputy Chair: You have mentioned research with batteries, and others have alluded to this. They are critical to a number of forms of alternative energy. If we could actually store electricity, we would have much better capacity utilization for wind and solar energy and distance for use in cars. There has been progress. However, can you give an assessment on where we are with battery technologies? Are we at a limit, or do you see breakthroughs occurring?

Mr. Evans: With the caveat that I am not an expert on batteries — I am a thermodynamicist, mechanical engineer — I understand there is steady, relatively slow progress.

The batteries in the Prius currently today are nickel-metal hydride batteries. The next step is to lithium-ion batteries. I am sure everyone has something in their pocket powered by a lithium-ion battery, and they go home and use a laptop computer also powered that way. They have been very successful on a small scale. The trick is to take that concept and scale it up. They are currently taking small laptop batteries and literally packaging thousands of them together in big units for vehicle applications. The next step will be to scale up to the size required for vehicles.

A significant advancement has taken place from the nickel-cadmium batteries that we used in flashlights to nickel-metal hydride batteries. Each step is an increase in energy density and carrying capacity. The lithium-ion battery is the next step along that chain. I do not know if there is something ahead of that. I am sure there is. People talk about polymer batteries as well. I do not believe there will be huge breakthroughs. We could not increase the energy density storage by a factor of 10, for example. It is a matter of steady progress, and the move to lithium ion batteries has been significant.

Senator Sibbeston: You did not mention anything about biofuels. Is that because they are insignificant at this stage?

Mr. Evans: It was on my list. I did not mention it in my talk because I would have to talk for two hours to cover everything.

Biofuels are significant. They are still relatively small players. There has been a problem in the U.S., in particular, where they have used ethanol from grain, which is simply not a sensible thing to do if you look at this on a life-cycle energy basis. Cellulosic ethanol is a better overall energy conversion chain than using grain. Interesting research is happening in this regard in Canada.

We make a significant use of biofuels currently that many people do not understand. I am sure most of you have been in or have seen a pulp mill. The most significant source of energy is biofuels. The waste remaining after extracting the fibre from the wood is all consumed in boilers onsite to generate the electricity required for the process and the process heat.

We use large quantities of what is sometimes referred to as combustible renewables and waste. Worldwide, about 15 per cent of energy comes from combustible renewables and waste. It is not producing ethanol for motor vehicles in the way people often think of it; it is burning leftover biomass in this way for process heat and electricity. Thus, we are major players and consumers already in this respect.

Senator Brown: We seem to have agreed with many of witnesses that have said that we cannot get away from fossil fuels for one or two generations at least, no matter what we do with all these renewable energies. Why are we not hearing about much research on the scrubbing of coal-fired plants? The United States has more coal apparently than all the other energy sources in its entire country.

We are exporting enough natural gas. We export to the U.S., through a Chicago pipeline, 85 per cent of their increase in natural gas every year. Sooner or later, that will become a problem. They got 10 per cent of their natural gas increase very recently from Texas shale, and they are tapping into other areas in Colorado to get more shale gas.

Why are we not trying to find a way to reduce emissions on the biggest energy sources that we are using? If we are using oil and coal, why are we not focusing hard on capturing or reducing the emissions from those plants, wherever they are?

Mr. Evans: That goes back to the carbon capture and storage. The technology is available. There is new technology to improve the process, but the technology is available to capture the carbon. It is very expensive because of the large volumes of flue gases being handled. The CO2 has to be scrubbed out of the flue gases, and then where will it be put? It is the storage issue. Those are really the issues — the unknowns about the storage and the cost of the large equipment required to remove CO2.

Senator Brown: I read somewhere that the oceans are capable of taking in 50 times more carbon as the carbon sink than the boreal forest and the rest of our green plants anywhere in the world. It looks as though they will probably start focusing on the oceans sooner or later. In B.C., I believe they are pumping CO2 into seawater now.

Mr. Evans: I am not aware that that is happening into seawater. People talk about saline aquifers, which are saltwater underground aquifers. I guess people are focusing on those because they will not be useful for any other purpose for people; therefore, we could put CO2 in them.

You can store a large quantity of CO2 in water. For a long time, the Japanese were thinking of trying to store CO2 in the ocean. They would have a coal-fired power plant, scrub the CO2 out and store it in the ocean. Many environmental concerns exist about the acidification of the ocean that might result if it is done on a large scale. Many people would be unhappy with that.

However, underground saline aquifers, which I believe are available in Alberta, are one possible storage site. It can be done, but, again, it is the unknowns with the carbon capture and storage. How long will it stay in those aquifers? Also, the cost is a big issue.

Senator Brown: I asked that question of the witness who we had the other day. In Southern Alberta, we seem to be finding gas naturally seeping into water aquifers — not gas we pump down, but gas that is already there, methane gas and SO2 gas. They do show up in water wells all over Southern Alberta.

If we start pumping huge amounts of CO2 into the ground, I do not care how deep they go, if there are fractures in the rock and they cannot seal everything all the way down, it will come back up.

Mr. Evans: That is the unknown and the uncertainty associated with it. That is why I am skeptical on that, as you probably gathered.

Senator Kenny: It has been an interesting discussion. It occurs to me that one of the biggest challenges that we have when you think about ethanol, for example, is that we created the ethanol business by encouraging the farmers to get involved in it, and now a powerful farm lobby does not want us to take it away. However, we have all figured out that growing corn to produce ethanol is not the brightest idea in the world.

The same applies to our fears about nuclear power. With many of the energy solutions, we almost need psychologists or communicators as witnesses to talk about how to address some of these issues in a way that will communicate better to the public.

I suspect everyone around the table here thinks that nuclear probably is where we will go in the long run — perhaps not everyone, but most people probably think that. Nevertheless, we all know that if we tried to move that way in Canada, we would not be successful in the next decade. It is just not going to happen.

The same is true with the force that we built up with ethanol. The farm lobby is such that it is a really important source of income now. It was something created by people who said that it is a cleaner fuel — but that is not the case.

How do you reverse that? I think it would be something worth discussing. I do not know if the witness has any observations that he would like to make on the psychology of energy.

Mr. Evans: Probably not. I said that I am not an economist; I am even less a psychologist, so I will not speak about that.

Senator Kenny: However, you mess around in the area.

Mr. Evans: Psychology is always important. I will make what may be a naive comment about the role of government, as I would see it. We often get in trouble when governments take a view that they know which technology would be best, so they put in place policies to promote a particular technology. Governments, I think, have not been terribly successful in finding winners in that way.

My view is that government should set the overall tone — we want only so much carbon emissions — and let the marketplace sort out what the best technologies might be. We have many examples of that. We get these distortions when the government decides, for example, that we need to have ethanol. Then we have a farm lobby that gets going on it; and once they are doing that, it is hard to stop it and take it away.

I would see the role of government to be to take a broad-brush approach, to set the requirements and then let the marketplace sort it out.

Senator Kenny: They should tell us the effects they want.

Mr. Evans: Yes, and we get on with it. If we decide it is nuclear, then they will want to regulate that and understand that, but they will not decide, yes, it will be nuclear and, no, it will not be carbon capture and storage, for example.

Senator Lang: I would like to see go back to one of your earlier statements, which resonates from the government and all the witnesses, that we are looking at a 20 per cent target for the carbon emissions by 2020.

I do not know if you are able to do this, but I would like to get an idea of what this 20 per cent target means to, for example, a family of four trying to make a living and, at the same time, trying to meet their environmental responsibilities.

What does that actually mean to someone when you say that we will have a 20 per cent target, and that we have low-hanging fruit that we can address to meet this objective of increased energy efficiency?

Mr. Evans: These targets are very challenging. With the best will in the world, we signed on to Kyoto, and we have that target of 6 per cent below 1990. You see what progress has been made — essentially nothing has been done, and that is with goodwill. This is hugely challenging. People like to use energy the way we use it now.

I have a real issue with targets. It is not that I think we should not have them because we do need them to shoot at. However, some of the targets are easy to throw out.

Again, I should not be negative about government, but it is easy for politicians to set a target for 2050. We have targets such as where we will reduce it by 80 per cent by 2050 or 2070. Fair enough, but what is the plan to reach that?

That is what I am focused on. We have only a limited number of things we can do; and if we really want that, we had better start now. The further out these targets get and the bigger they are, the more difficult it will be to meet them. We should have targets; we should expect that we may miss them but should do our best to try to reduce emissions.

Senator Lang: Your priority for Canada is to increase energy efficiency. Let us look at that principle. Do you believe that if we address this principle, we can meet a 20 per cent target for carbon emissions?

Mr. Evans: I am not sure that we can meet 20 per cent across the board with just efficiency, although efficiency is an important component of that. It is expensive and takes a long time. If we want to increase the efficiency of buildings, for example, we need huge programs to do that because we have so many buildings and individual houses.

I have been working in this business since the 1970s. I worked for the provincial government, for Senator Neufeld's ministry, running energy conservation technology programs. Some of you will remember that we had an energy crisis in the 1970s. Energy efficiency was all the rage, and we wanted to increase efficiency in buildings, which is still an admirable goal. Not much has changed in that time.

One of the big issues was the landlord-tenant relationship. This is something I would encourage government to try to tackle. We still have exactly the same problem. I am a tenant in a building. I pay the energy bills. The landlord has no incentive to retrofit my building or put in a more efficient furnace, and I cannot do that as a tenant. That is a complete division that is very counterproductive. I do not have any magic ways to do that, but if we could fix that problem, it would be a huge benefit toward moving to some of these near-term targets. I can present to you the challenge to put that in place.

Senator Lang: I still do not seem to be able to get an answer. Perhaps I should be asking my question to an economist. What does 20 per cent actually mean to the economy and to a family of four in terms of what it will cost?

Mr. Evans: It will be expensive — there is no question about that — and perhaps disruptive to the economy. I think 20 per cent can be achieved through efficiency, moving more to the electricity economy, expanding hydropower and perhaps nuclear power. We cannot do all of that by 2020. There is perhaps just time to build a nuclear plant by 2020.

Senator Lang: It seems to me that what you are saying is that governments — because it is largely the provincial governments, in conjunction with the federal government — should be making a decision to expand hydro and to put in nuclear plants, and that this will meet our environmental responsibilities as well as wean us off the fossil fuels that we are presently using.

If we made that decision today, we would have the line of approach that we will take, timed with the planning process, and then we could meet the obligations that we are saying that we should be meeting. Would you like to comment on that?

Mr. Evans: That is exactly right. As an engineer, if I were running the country, we would have a plan: We need so much nuclear and hydro; it will cost this much, and let us get on with it.

I know politics does not work like that, but that is the engineering approach. It could be done, but important political issues, as well as people's concerns and special interests groups, make it difficult to do that. Ideally, we would have that type of plan.

Senator Lang: Further on that topic, for the information of other members, Britain has taken their responsibility for energy requirements to a non-partisan, independent organization or board, and they are going ahead with 10 nuclear plants in the next number of years. They have shortened the regulatory planning process down to an absolute minimum so that they can meet their obligations. Otherwise, they will not have enough power for the country. Perhaps that is something government should be looking at so that decisions can be made.

Mr. Evans: That is right. Britain has not built a new power plant for a long time. It has built relatively small-scale, inexpensive natural gas plants. Britain has already used most of its North Sea natural gas, and now it is importing it from Russia. How secure is that? I think that is the issue. Now Britain is moving to nuclear.

The Deputy Chair: Thank you to all senators. Your participation has been stimulating, all because Dr. Evans' presentation has been equally or even more stimulating.

I would like thank you, Dr. Evans, on behalf of the committee and on behalf of the people who have been watching this in the public and who will watch this in the future. This has been exactly on point with what we are trying to achieve. We want to make the issues clear, precise and understandable to everyone. You have done that exceptionally well.

Mr. Evans: Thank you very much for those kind comments. I have enjoyed this interaction. I will watch your deliberations with interest over the next couple of years. If I can help in any way in the future, I would be happy to do so.

The Deputy Chair: We might just have to call you back. Thank you.

(The committee adjourned.)