:
Good morning, everyone.
As you know, we're here today to continue our study of energy security in Canada. We have two panels today. For the first panel, we have, from the Northern Gateway Alliance, Colin Kinsley, chairman, and from the Coastal First Nations, Art Sterritt, executive director, Great Bear Initiative.
Welcome to both of you.
In the second panel, we have three witnesses, all by video conference. That will be interesting. We've never tried that before, so I'm looking forward to that.
Let's get on with the panel. We'll have the presentations in the order they are listed on the agenda.
We'll start with the Northern Gateway Alliance.
Mr. Kinsley, go ahead, please, for up to seven minutes.
:
Thank you,
monsieur le président.
Gentlemen, it's my pleasure to be here this morning to present on behalf of the Enbridge Northern Gateway Alliance. Simply put, it's a group of community leaders—elected officials, mayors, regional district chairs and others, community leaders from chambers of commerce, and some labour groups—whose main purpose is to be a voice to the membership and to keep them apprised of the project as it goes forward through the joint review panel.
First, if I may just share this with the panel, Enbridge is an energy transportation company, one of the largest in North America, and serves industrial, commercial, and retail consumers in Canada and the United States. They operate the longest crude oil pipeline system in the world, with about 15,000 kilometres of pipe, extending from Canada's Northwest Territories to northern Alberta to the American Midwest and all the way down to Oklahoma. They also transport natural gas. They have an extensive and growing portfolio of renewable and green energy generation facilities in both Canada and the United States.
The purpose of Enbridge's Northern Gateway pipeline project is to have strategic access to Canada's west coast. National Energy Board data from 2009 shows us that less than 1% of Canada's petroleum exports went anywhere other than the United States, yet just a little more than a thousand kilometres west of us--with the world's largest industry resources--is a coastline that is perfectly positioned, strategically and geographically, to connect Canada's petroleum supplies to the growing demand of Asian markets.
Right now, there is little oil flowing west towards those markets. Northern Gateway will change that picture and have a huge strategic impact on Canada. I would like to share with the panel the fact that this is Canada's resource--not Alberta's resource, not B.C.'s, but Canada's. And it's Canada's resources, I would submit, that pay for the health care system we proudly have, for our education system, and for many other of the services that Canadian citizens demand of their leaders.
Northern Gateway provides a much-needed large-volume option for Canadian energy to the Pacific Rim, which includes the U.S. west coast and east Asia. With the only market available to us now being the United States, we are more of a price-taker than a price-maker. The Americans dictate pretty much what our energy is worth and we have no choice as to where that could go. By accessing what is known as the fastest-growing middle class on earth, in China, where their energy needs are vast....
There's an argument that I have heard from time to time, which is that Canadian oil into Asia would in fact increase their greenhouse gas effects and such, and I would submit that this argument is stated by those who haven't been to China. If you see how the Chinese create the bulk of their energy, electric energy in particular.... In my experience—and I have been there more than a dozen times—they produce electricity and community energy with low-grade coal for every part of China, including the far north, Heilongjiang province, in Harbin. The environmental impacts are devastating. Being a proud Canadian from the north, I had never seen grey snow until I went to northern China.
With respect to demand in America and in Asia, I'd like to speak briefly to a paper that David Emerson wrote. David Emerson is a former federal Minister of International Trade and Minister of Foreign Affairs. He noted that of all the G-8 countries, Canada is the one most dependent on trade, and that hitching our wagon to the U.S. alone, which is currently struggling to emerge from what some have called the “great recession”, is not a prudent approach in maintaining our long-term prosperity as a nation.
If we are trade dependent, then let's play to our strengths and foster diversified trade with global trading partners, not just the North American markets. This will help insulate our nation from economic challenges that any single market might experience.
Coming from Prince George—one of the wood capitals of the world, I would submit—we know what devastation occurred when we relied on one marketplace for our softwood lumber products. When the U.S. housing market collapsed, our forestry industry faced almost the same fate.
Also, in considering Canada's west coast and the Pacific Rim, the geographical fact is that Canada's west coast ports are two days closer to the Far East than other ports in North America and South America. That's an important consideration in a world where competitiveness in our supply chain is defining our success factor. Our nation's Pacific advantage is clear.
Another advantage we have is our world-class energy advantage. A Northern Gateway pipeline is an opportunity to marry these two fundamental global competitive advantages for the long-term benefit of the nation, both strategically and economically. In very broad strokes, that's the strategic case for the Northern Gateway.
Now, let me take you very quickly through some of the aspects of the project. It comprises two parallel pipelines extending 1,172 kilometres from Edmonton, Alberta, to a marine terminal at Kitimat, British Columbia. The projected cost in 2010 dollars is $5.5 billion.
The 36-inch westbound oil line will have a capacity of 525,000 barrels per day from Edmonton to Kitimat. A 20-inch returning line to the east will carry condensate. Condensate is a product used to distill the oil to make it flow better--think of it almost like paint thinner. It will deliver 193,000 barrels of condensate from Kitimat to the industry in Edmonton. Today that condensate comes from various countries. It's a derivative of natural gas. It's delivered to Kitimat in tankers--and has been for 25 years--put on railcars, and shipped from Kitimat to Edmonton to be used in the industry.
Next I'll talk very quickly about the regulatory review process. A joint review panel was established with consultation between the National Energy Board and Enbridge. The joint review panel was chosen because it also brings in the Canadian Environmental Assessment Agency, so there can be a parallel discussion on the national interest and the environmental concerns that will be raised.
The initial filing has been done and the JRP has been formed. They've had some preliminary hearings on how they should proceed. We're waiting to hear when the public hearings will take place and where. These public hearings will take place at least over the next year. The entire review process could take from 18 months to 36 months, depending on the type of extra information required.
In the filing, there are 17,500 pages of geotechnical, geophysical, and first nations issues, from traditional use to traditional medicines, and those types of things. Through this review process, Enbridge will most likely be given more requests to find and submit information as it goes forward.
When and if the approval to construct is given, there will be about a three-year construction period. That will impact every community from Edmonton to Kitimat because of local procurement, first nations procurement, and opportunities.
The opportunities are vast. The stakes are high. It's a Canadian issue. And I appreciate being here today because it needs Canadian attention.
Thank you, Mr. Chairman and gentlemen.
:
Good morning, gentlemen, and thank you for inviting me to present to you.
As you said, I'm the executive director of the Coastal First Nations. We are an amalgamation of 10 separate first nations comprising 20,000 members, the vast majority of the population from Rivers Inlet, on the central coast, to the B.C.-Alaska border.
I want to speak to you today about our concerns about energy development in Canada and how it affects us. You have heard other people's concerns about the threats posed to them from oil drilling, shale gas development, and oil sands. We, too, share these concerns.
The marine resources we harvest sustain our communities and our culture. They create who we are. Our future is dependent on these coastal waters. We are the ones who face all the risks but derive few benefits from any such developments.
We are not some not-in-my-back-yard group. We hold constitutionally protected aboriginal and treaty rights that would be seriously threatened by offshore drilling and oil tankers in the waters off the central and north coasts of British Columbia.
Let me be clear. The Coastal First Nations are not against development. We are promoting it. For the past eight years, the Coastal First Nations have brought together industry, the environmental community, and governments, both municipal and provincial, to develop a sustainable economy on the central and north coasts and Haida Gwaii. We've done this to breathe life into our economy and into our rights and our title.
We have raised and invested in excess of $300 million in this geographic area on things such as building a shellfish industry. We have a partner out of China. I've been to China many times and have seen their industry. In our initiative to try to protect these waters, we have support from the Chinese as well.
These economic initiatives, as well as our rights and title of each nation, are threatened by oil spills. That's why we are firmly opposed to offshore drilling and the introduction of oil tankers as proposed by Enbridge. I don't have to remind you folks that accidents affecting the marine environment do happen--I visited the Gulf of Mexico this summer.
These accidents happen despite government oversight and regulatory control, and despite promises and commitments made by their owners and developers. In other words, we, the Coastal First Nations, will face all the risks.
When I visited the Gulf of Mexico, I found a very disturbing scenario. About half the amount of oil that spilled over these many months in the gulf would be carried by each tanker that plies the waters of Douglas Channel and our coast. The consequences of a catastrophic oil spill on our people cannot be calculated, nor can it be compensated.
I want to remind you that, like in the Arctic, the effects of an oil spill and the difficulties of cleaning it up are problematic on the north coast. We have much higher tides and a much greater chop in the winter than the gulf, but we don't have the cleanup fleet or the micro-organisms that absorb oil in the Gulf of Mexico.
Suffice it to say that the technology, the management, the regulatory regimes, the intergovernmental agreements, the oil spill response capability does not exist to deal with oil spills on the north and central coasts of British Columbia and Haida Gwaii. There is no way that we will be able to clean up an oil spill. The technology we found in the gulf, where all the technology of the world was concentrating on trying to clean up an oil spill, is 1960s technology. Nothing has advanced on this in the last four or five decades.
This is what Coastal First Nations are afraid of. This is why we are opposed to offshore drilling and oil tankers in our water. Out of respect for our rights and our title, the current moratorium on offshore drilling should be maintained, and the informal ban on oil tankers off the north coast of B.C. should be legislated, as the majority of parliamentarians indicated a couple of days ago in Ottawa.
Until first nations are satisfied that such development can be done in a way that doesn't pose an unacceptable risk to them, the National Energy Board should not approve specific projects that will introduce oil tankers on B.C.'s north and central coasts, such as the Enbridge Northern Gateway project.
Further development would require a strategic environmental assessment for the region, such as you heard the chairman of the Canada-Newfoundland and Labrador Offshore Petroleum Board say they conduct before even contemplating any approvals for drilling or exploration. Any such developments also require a regional risk assessment and the kind of inquiry that the National Energy Board is launching with respect to Arctic drilling. You have also heard the suggestion that a commission of inquiry be created, one that deals with oil tankers, offshore oil exploration, and licensing and oil spill response.
Lastly, no oil tanker should be introduced in B.C.'s north and central coasts or the offshore drilling moratorium lifted until the National Energy Board, Transport Canada, and the Government of Canada can satisfy us that an acceptable process is in place to consult with first nations on approving and managing these developments and that government agencies have the financial and human resource capability to deal with catastrophic oil spills. I know that you heard earlier in the week from a panel that said we don't possess that ability right now.
A full regional study needs to be done for the west coast of B.C. on the consequences to first nations of a catastrophic oil spill, including worst-case scenarios. The National Energy Board and Transport Canada must consult with first nations on any related regulatory standards it uses as part of their so-called goal-oriented regulatory regimes.
And certainly, adequate tanker owners' liability for spill cleanup needs to be addressed, so that Canadian taxpayers do not have to pay for the cost of cleanup and people seeking compensation don't have to go to court, where the oil companies can run them out for decades. Accidents that can cause irreparable harm to first nations constitutionally protected rights can, do, and will happen. This cannot be in the national interest.
We on the coast are the ones who are facing the risks and we are the ones who must be satisfied that the risks are worth taking. Until that happens, offshore drilling and the introduction of oil tankers on the north and central coasts of B.C., through the back door of a project-specific approval such as that of Enbridge, is wrong and totally unacceptable. We are not asking for anything different from what you would want to protect your family if something that threatened them--like an oil refinery or a crack house--was allowed to locate next door to you.
I've been to China on numerous occasions and I don't buy the idea that we need to have a reason to send oil to China just to raise the price of oil. The last time I looked, the most lucrative industry on planet earth was the oil industry, and they don't need any help making any more money at the expense of the rest of us.
Enbridge, over the last decade or so, has spilled millions and millions and millions of litres of oil throughout North America. Coastal First Nations find it unacceptable that they are proposing to do that in our areas and that first nations in the interior of B.C. find it acceptable that they propose to do it there.
Thank you. I look forward to your questions.
:
I'm not technically expert in those fields. I certainly respect the comments of Mr. Sterritt, and I understand them. It just so happens that the Douglas Channel has been kind of my second home for 30 years, too, because of the pleasure of fishing, crabbing, and prawning out there. I know it extremely well.
I've read extensively on this project, and from the information I have, and from what I know exists out there, spill response is not where it should be right now. In fact, Mr. Sterritt would probably agree that since the sinking of the ferry that struck Gil Island, emergency response has not changed on the northwest coast of British Columbia. The spill response comes out of Kitimat.
Under Enbridge's proposal, the entire coastal region response and emergency preparedness will grow, and it will employ first nations along the channel to do that emergency response. This will actually enhance what exists, because the transportation of oil takes place now, too, albeit in smaller ways, even into Haida Gwaii. Some million gallons a year of diesel goes in to feed the oil electric generation plants and also some coastal villages up and down the B.C. coast because they're not on the grid.
So this type of activity takes place all the time, and this proposal will enhance it, and not only on the spill response. As you know, in health care, staying healthy is more important than trying to get healthy after you're sick. To that end, this proposal, again, will make the coast safer because radar will be introduced. There will be better weather monitoring, better buoys. The speeds will be altered. Weather conditions will be put in. It has been proven that the tugs that are going to be designed and built in British Columbia to be tethered to these tankers can actually stop a tanker or steer a tanker if it loses rudder control or power.
I can't dispute what Mr. Sterritt was saying exists today, but I can argue, I think, that a project such as this will enhance not only what will be coming but what is there now. When you talk about what's taking place now, there's a 50-kilometre exclusion zone on the outside of Haida Gwaii, from Alaska to Cherry Point down in Washington State. About 350 tankers a year go down there and have for many years.
The 50-kilometre exclusion zone is there because there are no rescue tugs anywhere along that sphere, so if a tanker were to get in trouble off the coast of British Columbia, Haida Gwaii or otherwise, the rescue tug would have to come from Alaska or Washington State. Under this plan, they will be closer to home and they will be locally operated. It's amazing how it will change this.
:
Thank you to both of you for being here today to help us with the study we have undertaken.
Mr. Kinsley, most of the arguments you have presented today are based on economics and make sense. You claim that we must turn towards Asia to find new markets for western oil, and that it is not a good thing to have only a single client. Because as it now stands, we depend entirely on that single client to set the price he is willing to pay, whereas if we had several clients, we could get a better price.
I completely agree with you, that's true. This is an economic argument and I believe that other arguments can be made in the study we have undertaken. Other arguments include the one made by Mr. Sterritt regarding the rights of aboriginals, whose lands will be affected. Of course, natural resources fall under provincial jurisdiction, but aboriginal rights fall under Ottawa's jurisdiction. I wanted to frame the issue this way.
You know that Quebec had the same problem which you will or might be faced with, as well. We wanted to develop hydroelectricity in northern Quebec on native land. We built power plants on the lands of the Cree, the Naskapi and the Inuit. Legally, you cannot build something on your neighbour's land without first obtaining his consent to be absolutely sure that you have the right to do so. This is why in Quebec, we signed an agreement with the aboriginal nations—which took a long time to negotiate—and which is called the James Bay and Northern Quebec Agreement. Canada was involved, that is, the federal government, of course, because it is the trustee of aboriginal rights. Therefore, we worked very hard, very specifically, over a very long time, to meet the needs of aboriginal people, to meet the needs of those who wanted to build the power stations, and to meet the needs of the federal government, since it is responsible for protecting the rights of aboriginal people in the long run. We ultimately signed an agreement which was recognized as being an extraordinary one, since it was one of the first major agreements we signed with aboriginal people.
So if you want to send oil through a pipeline over native land, what kind of long-term, well thought-out and detailed agreement have you begun to undertake, or are thinking of undertaking, with the aboriginal people who will be affected?
:
Merci, monsieur Pomerleau.
The discussions with first nations--and there are some 50 of them, including aboriginal and Métis, along the proposed corridor--have been ongoing for several years. Protocol agreements have been signed with 30 of the various aboriginal groups out of about 50, and discussions are going on with others. Many more may sign on, because the approach has been, first of all, to engage first nations experts on gathering traditional knowledge, such as the use of the land, ceremonial sites, traditional medicines and those kinds of things, and other traditional uses as they go along the corridor.
To give you a very quick description, the corridor right now is a kilometre wide for identification purposes and geotechnical studies. The construction right-of-way will be 50 metres wide. The end right-of-way will be 25 metres wide. Everything will be returned to its natural state except on that final 25 metres.
What has taken place with aboriginal people is discussion on an equity position. There are going to be 40 units of economic opportunity for the first nations, funded by Enbridge, so it's about 10% of the value of the pipeline. It's in the millions of dollars. The financing will be conducted by Enbridge for the nations because, as you probably know, a lot of first nations don't have the financial capacity to put in their own funds. This will be paid back through their share of revenue on the pipeline.
In addition to that opportunity, they will have opportunities for procurement, provision of services, and training. There's a plan in place. Discussions have been going on for two years with Northwest Community College in Terrace, which is about 150 miles northwest of the proposed line, with the College of New Caledonia in Prince George, with Northern Lights College in Dawson Creek, and with the University of Northern British Columbia, with its main campus in Prince George.
This is to identify what employers will need: the types of employees and the kind of training they'll require. The opportunity has been given for first nations to participate in that. First nations chiefs and councils have been consulted with for some time. Not all, of course, are in agreement, and some have actually not had consultation because they have chosen not to.
So the job before Enbridge and the development team is of course to earn the trust of those first nations, to earn a social license with them, and to have acceptance to cross their traditional territories. In my previous life, I was the mayor of Prince George for 12 years and chairman for several years of the regional district—which takes in a large rural area—and we had incredible relationships with our first nation neighbours.
Three of the chiefs I have consulted with are very open to participating in this. The resistance grows the further west we go. We recognize fully that the introduction of the pipeline industry is new west of Prince George. There are three lines that come down out of northeastern British Columbia through Prince George to serve the southern coast, Vancouver, and the Lower Mainland. There's only one small gas line that runs from Prince George west to Kitimat. It's Pacific Northern Gas, supplying natural gas.
It's new, and there is a challenge, but the fact remains that we feel the economic opportunity, the educational opportunity, and the lifelong opportunity for first nations are there, and the partnerships are being developed. I think they will be developed over the next six months or so to where we need to be to receive that social license.
I'm sure that was an oversight by Mr. Cullen in his remarks.
Mr. Kinsley, it's nice to see you here today.
I want to try to focus and see whether I have it right on the exhaustive environmental review process that this has to go through before even one shovel goes into the ground for the pipeline.
But also, it's my understanding that the tanker ships we're talking about are beyond world class from the safety point of view, with double or triple hulls, compartmentalization, and every possible safety feature to guard against a major spill in the event of going onto a rock or something like that. Now, when you add to that the GPS technology, which I'm not an expert in either, I am led to understand that this can track a 400- or 500-foot ship within inches of where they are on their route. Then you add to that the tug boats, which will be mandatory to guide the ships out of the channels, and you add to that the commitment for the vastly increased spill response commitments that Enbridge is going to be obligated to commit to and to keep.
If some day the sky is going fall and the world is going to end, somehow, in this particular case, I think the likelihood of an accident—anything that it is presupposed could happen—is being looked after now, so that if, God forbid, anything ever does happen, and it may not ever, for sure....
But Mr. Cullen and Mr. Sterritt don't seem to recognize all of these precautions, processes, regulations, compliances, and obligations that are put in place before even one shovel goes into the ground, let alone one drop of oil.... Can you comment on this?
I'm sorry--I took too long.
:
Thanks to you, Mr. Chair, and also to the rest of the committee, for allowing me to speak to you today.
My name is Arnold Nagy. I'm here on behalf of the United Fishermen and Allied Workers' Union--Canadian Auto Workers.
I have worked in the fishing industry for the past 32 years. I am the president of Local 31 of our union and also the chair of its environment committee. All the work done by our environment committee is done on a volunteer basis. Any costs are fully paid for by our membership from the dues we collect from them.
The fishing industry has been the one economic constant on the north coast for over 100 years, providing employment to countless generations of shore workers and fishermen. These plant workers and fishermen don't come only from the community of Prince Rupert where I live. Many also come from the surrounding first nation and non-first-nations communities, including some that are hundreds of miles up the Skeena River.
On average, the fishing industry provides $135 million a year to the economies of these areas. With the collapse of the forest industry in British Columbia, the fishing industry is now the largest private employer in the north and central coasts of British Columbia.
The UFAWU has for many years defended both the freshwater and marine environments that our fisheries depend on. Whether it has been pesticide spraying, forestry practices, offshore oil and gas exploration, coal-bed methane drilling, or dams on important rivers, we have been standing up for the environment of our fish resource, which we depend on to make our living. That is why we are presenting our concerns to you today.
I once again find myself having to put forward our position in order to make sure our concerns are heard. We are witnessing an unprecedented gold rush mentality in the north that threatens the future of the fishing industry, the many coastal communities that depend on it, and the people who work in it.
Over the years, we have witnessed many proposals that pose risks to the Skeena River and the surrounding areas, where salmon runs could be wiped out forever. Every time we have raised our concerns, we have been called fearmongers or accused of spreading misinformation. I would suggest that protecting our livelihoods and the environment we depend on is the responsible thing to do if we wish to preserve this industry for future generations.
Proposals have recently been put forward by Shell to drill for coal-bed methane at the confluence of the Nass, the Stikine, and the Skeena Rivers; it is also known as the Klappan or Sacred Headwaters. One accident on this proposed project would wipe out three high-producing salmon rivers and ruin the livelihoods of everyone who depends on these rivers to make their living. The tourism industry, the guides, the entire northern commercial fishing industry—all these would be wiped out.
Today, once again, the issue of pipelines and oil tankers has raised its ugly head, with little concern for the local economies and the industries that would be affected by an accident. The bottom line is to build the two pipelines and move bitumen to Kitimat, to be loaded onto oil tankers along with condensate and shipped to Alberta at whatever cost.
I find it interesting, but not surprising, to hear those interested in seeing an oil port in Kitimat trying to sell us on the safety of these proposals, even while Mr. Scott Vaughan, Commissioner of the Environment and Sustainable Development, raises the alarm that Canada cannot deal with a major oil spill emanating from a tanker. He was troubled by the government's lack of readiness, given that one oil spill is reported to the Canadian Coast Guard every day.
Mr. Chairman, these jobs in the fishing industry are permanent, high-paying jobs that employ thousands of British Columbia residents. The pipeline jobs will create short-term construction, but after they are done, there will not be many full-time jobs created by any projects of this kind.
Does it really make sense not to take a serious look at how we are being caught up in this gold rush mentality to maximize profits at any cost? I would suggest not. We must be willing to approach these issues with the common sense that is required to protect our environment and the many communities that will be affected by the decisions made. We have paid a very heavy economic price to rebuild our salmon resource and other fish resources here in the north, and our communities cannot afford another economic hit, which we will take if the commercial fishery is damaged.
As a member of the Haida nations, I can say that the fishing industry has been an important part of my family's history for well over 100 years and the fisheries resource for well over 10,000 years. I raise this issue because the issue of compensation always raises its head as the way to alleviate the fear of any spills or damage to the environment when an accident occurs. I have spent many a night thinking about this question and trying to figure out something that nobody is willing to answer.
The question is, Mr. Chair, when an accident happens, how is money going to compensate the first nations peoples for 10,000 years of culture that has been destroyed? As I say, I cannot find the answer, and I cannot find anybody willing to give me that answer.
Secondly, we in the fishing industry do not want to live off compensation payments. We want to catch fish. We want to process them in our plants. That's what we do best, and that's why we are the best in the world at what we do. The Canadian canned salmon market fish is the best in the world and is considered so. The Skeena River sockeye is the only can of fish that has its own identity code. It is identified as fish caught in the Skeena River because of the supreme quality of the product going into that can.
Working in the fishing industry is a job we want to do for many generations to come, and we want to be able to pass it on to future generations. We have the opportunity today to help inform you of our concerns so you can help us to protect our livelihoods and understand our concerns in that regard.
As Canadians, we cannot afford to follow the gold rush mentality we are all witnessing. We have to be able to take back control, step back, and make sure that our future communities and livelihoods are not put at risk to increase the profit margin of shareholders or big companies.
I have been accused in the past, Mr. Chair, of being used to further American interests to access our oil by working to have oil tanker bans and by working against the Enbridge pipeline project. I would like to assure the committee that this is the farthest thing from what I am working towards. My concern is to stand up for the communities and the industry in which I make my living, and for the environment, a healthy environment that provides these economic opportunities in the community I live in.
I would like to let the committee know that I also work as a longshoreman in the Port of Prince Rupert. We depend on the shipping industry for that work. I would like to let you know that I have received nothing but good comments from the people I work with at Maher Terminals on the efforts we are making in our union to raise the issue of our coastal communities and to protect them, their economies, and the environment on which we all depend so much here in the north.
Mr. Chair, the first nations say that you cannot separate fish from people. The well-being of our communities and that of the sea are inseparable. Fishermen say that the sea is part of their soul.
Commercial fishery members are optimistic that sanity will prevail and that our communities will continue to profit from an unspoiled marine habitat, abundant fish stocks, and healthy fisheries for many generations to come.
In closing, Mr. Chair, I'd like to thank you for your time in allowing me to speak on this issue.
:
I haven't been in this room before--
Some hon. members: Oh, oh!
Ms. Brenda Kenny: --and as soon as I came in this morning, I thought, boy, I hope there aren't any major Senators fans or Leaf fans out there.
In any event, I am here representing the pipeline sector. I'll provide a few perspectives from the pipeline point of view.
Of course, the members I represent with the Canadian Energy Pipeline Association are all of the major oil and gas transmission pipeline companies in Canada. I believe that before the committee this morning are a few slides that you'll have in hard copy. I hope that came through okay. There are some maps and some other photographs that might be useful to you.
If you think about movement of energy, we're the highways. Across a network of over 100,000 kilometres of large pipelines, we transport virtually all of the oil and natural gas that's produced and used in Canada. Pipelines are by far the safest means to transport large quantities of energy.
We are essential to ensuring Canada's place in a changing global economy. Truly, the interests of CEPA's member companies are critical to the public interest. The energy that we deliver is essential to our survival, be that heat and power in homes, industries, hospitals, or schools. It transports the food that we eat. It transports clean water to our taps every day. It moves people, goods, and information, and ultimately provides an unparalleled quality of life across this nation.
My comments today are from the perspective of the major energy sector, and I want to say that this is rooted in a very strong sense of duty. We have a duty to enable the meeting of energy needs and enabling trade, and an utmost duty to do so with a clear and strong sense of responsibility for safety and environmental protection. We also have a duty to speak out when we see danger signs that affect the Canadian public interest. My remarks today will look at this through the lens of pipelines and will focus on trade, on safety, and on regulation.
First of all, on markets and trade, Canada is and always has been a trading nation, right from our first nations. Indeed, we are the most trade-dependent member of the G-8 group of countries. It means that a huge part of what creates a quality of life for Canadians is tied to trade.
In the west, the strategic importance of Canada's Pacific Gateway strategy is well understood by governments of all stripes and it is very much tied to our past, current, and future prosperity. Energy products are not a new part of that picture.
Canada's situation in the world of energy is unique. This country has unparalleled opportunities. The oil sands, for one, contain 170 billion barrels of oil. That accounts for half of all of the accessible world oil supplies. The energy sector represents about a quarter of all the value on the Toronto Stock Exchange.
Let's keep in mind that is not about big business. That means people. That's pensioners. That's parents saving for kids' education. That's capital to invest in our future. Over the next 25 years, investments in oil sands are expected to spur the creation of some 500,000 jobs and bring in nearly $491 billion in government revenues.
From a west coast perspective, pipelines represent the opportunity to bring Canada's resources to the world at the same time as contributing to local and regional prosperity. The expanding economies on the west side of the Pacific Ocean--including China, Japan, and India--need energy, and Canada must compete with other energy providers. Ensuring these markets are open to Canada will provide critical diversity in this trade-dependent economy. It will also build and strengthen important new trade relationships that increase Canada's power and influence in the international community. By looking ahead over the next 20 years, pipelines alone intend to invest $80 billion.
When we consider energy from the point of view of security and sustainability, we have to acknowledge that the long-term interests of this nation ripple across many decades and perhaps centuries. But imagine today if there were no energy delivery at all.
By way of comparison in terms of critical infrastructure, imagine if we had failed to build the CPR railway. I think the map of this nation would undoubtedly be different from what it is today. Or consider the St. Lawrence Seaway and the impact that has had over time. Getting the right infrastructure in place has profound implications not only for today, but for many tomorrows.
Safety is the number one and critical duty and interest for pipelines. In our day-to-day operations, nothing else matters more, and there is absolutely no competitive advantage to cutting corners on safety and the environment. Indeed, more than $1.6 billion is spent annually to promote and advance this.
We're among the most sophisticated in the world. Pipe design and installation is low impact, and pipelines, unlike highways and railways, can be restored to productive habitat for wildlife following construction. With regard to pipeline and marine operations, CEPA member companies are constantly involved in updating and advancing environmental and safety standards.
We also have been proactive in the development of new technologies, such as advanced technologies for 24-7 monitoring, control centres, remote centres, automatic shut-off, and emergency planning, and also internal inspection, which gives us new data that's critical to ensuring we can maintain these systems very safely. Those combined advances in technologies have resulted in a significant improvement in safety over the last 20 years. However, we will not and cannot rest. We understand our duty and responsibility to protect the environment and the general public and are committed to continuing to improve.
Clearly, Canada wants and needs energy and trade. Where projects are needed to deliver that energy, regulation influences that economic activity. It protects the public and the environment and enables without restricting outright.
Integrated decision-making, stakeholder engagement, and aboriginal consultation are core parts of sustainable development. Resource projects are no different. Our historical patchwork of laws and segregation can create a false sense of security and undermine the ability to optimize outcomes and adjust designs where needed.
If a project is in the public interest, it needs to be integrated, and we believe that, ideally, over time regulation will be improved in this country, leading to one project, one assessment, and a true consolidation of safety and environmental protection. Longer reviews are not better reviews.
Effective consultation and timely review focused on strategic issues have the following: decisions need to be transparent, with good follow-through and monitoring. That follow-up comes after a fundamental public interest determination over whether a project is to proceed or not. The interests of all Canadians and the duties of pipeline operators are tied to this. W must have a better system of regulation over time so we can focus on the things that matter most.
In the meantime, the pipeline industry has a duty to Canadians. Not only must we provide the highways needed to fulfill consumer needs and to facilitate trade, but we must also be diligent on an ongoing basis in terms of safety and the state of the environment.
Thank you for this opportunity.
:
Thank you and good morning.
My name is Kaity Arsoniadis Stein. I am the president and secretary-general of the International Ship-Owners Alliance of Canada. I'm also director of the International Maritime Centre, director and vice-president of the Vancouver Maritime Arbitrators Association, and a trustee of the Insurance Dispute Resolution Services of British Columbia.
I appear before you today on behalf of the International Ship-Owners Alliance of Canada. This group represents local and international merchant shipowners, managers, and operators of ships, who collectively control a fleet of over 500 ocean-going vessels and employ over 10,000 sea-going and shore-based employees.
Through their Canadian companies in Vancouver, they employ over 340 direct management jobs. Their membership includes a Canadian ferry operation, a coastal tug and barge operation, and international members who have been in Canada employing Canadians since 1991.
Among the ISAC members, I benefit from the fact that a founding member is an integral provider of marine services to the oil and gas extraction business, transporting more than 10% of global seaborne oil. In addition to this member, there are several other members of ISAC who are engaged in providing similar services, albeit on a small scale.
The ISAC members are responsible Canadian corporate citizens. In fact, they maintain this reputation internationally and have sought to encourage the marine industry to address air contaminant matters by adopting the use of cleaner fuels. Domestic regulators, like Environment Canada, are aware of the contributions ISAC has made in this regard. ISAC maintains contact with the Canadian regulatory environment and wishes to continue operations consistent with Canadian societal objectives.
On the west coast we see propositions for a ban on tankers being advanced, yet on the east coast we see no similar constraints or concerns being entertained. Our observations include this: that the nature of the stimulus behind this proposed ban is questionable for its authenticity. The waters on the east coast and on the west coast represent demands upon those operating on either coast, yet the west coast is being singled out for environmental concerns that apparently are not considered on the east coast. This dichotomy begs the question: why has this occurred?
Recent observations have been made in the press that the pretext is not genuine and may be for other strategic and economic reasons. I reference the Financial Post article dated October 14 and written by Vivian Krause, indicating that U.S. foundations are compromised in their agenda and have been financing Canadian environmental groups and others to advance the American-based agendas of their American contributors.
The resounding question remains: why? What is the Canadian strategy? We have members who are experts in moving oil globally and who are at a loss with respect to what is occurring here in Canada and why. Is this a U.S. plot to ensure that Canadian oil can only be destined for the U.S. market?
We submit that the safe and responsible movement of Canadian resources into the international market could and should be a source of employment creation for communities on the coast. The logistical chain of resource extraction includes the exploration, the production, and the transportation of the products.
I will quote from page 4 of Ethical Oil by Ezra Levant. It is believed that the Alberta oil sands:
...represent the largest single deposit of petroleum reserves on the planet, with, by some estimates, between 1.7 trillion and 2.5 trillion barrels of oil inside it. The recoverable oil in Alberta's north has the potential to deliver a stable oil supply to the world for the next one hundred years.
Perhaps a solution to the dilemma caused by a ban on tankers could be found in the creation of sustainable jobs for stakeholders, both aboriginal and non-aboriginal. Sustainable employment in the transportation of these goods could come in the form of creating and utilizing an internationally capable Canadian fleet of tankers, with corporate headquarters in Canada, employing Canadian citizens and transporting Canadian resources. A Canadian fleet with Canadian staff will abide by Canadian environmental standards and would endeavour to ensure that Canadian requirements were met.
Further safeguards, creating additional layers of employment, could be instigated to bring comfort to coastal communities, the fishing industries, and our government, before we even start discussing a ban on tankers.
For example, we could have additional escort tugs, increased numbers of pilots, and specified sea lanes, and we could designate companies with social corporate responsibility status. Also, with respect to a very current issue now, we could see the continued retention of coastal watch by staffed light stations, thus building a strong coastal infrastructure and creating numerous jobs for aboriginal and non-aboriginal stakeholders along the west coast.
The extraction and exploration industries are major employers, but to constrain our ability to transport will only see a reduction in the employment opportunities afforded by exploration and extraction.
We are of the view that trade diversification is more desirable than reliance on a single market. If Canada were unable to export from the west coast to areas of the world where demand existed, such as Asia and India, would we not be limited in the markets to which we could sell, in the jobs that we could create, and in the prices we could command?
Would a west coast ban not result in the reduction of employment opportunities within the oil and gas sector? If you cannot sell the product internationally, you cannot command an international price. Therefore, inevitably, we would be giving it away at a discount. Is this the U.S. agenda and are we playing into this plot?
On the east coast, oil goes to the U.S. as a consequence of choice. On the west coast, in the face of a tanker ban, oil from the oil sands will be denied the markets of Asia and elsewhere. By consequence, we will be restricting our sales to the U.S.
The irony is that tanker traffic from Alaska to Washington State along the west coast of Canada will continue unimpeded. Recent statistics show there are over 500 such voyages a year. American flagged vessels under the Jones act can transit from one U.S. port to another U.S. port of call. Of interest should be why they are travelling along the coast and not shipping the oil by pipeline.
The answer is evident: it's American security of supply. They do not want American oil to enter Canada by pipeline, but they will take Canadian oil via pipeline for their own use. This again provokes the question: why? The arbitrary choice of denying Canada the offshore markets seems to fly in the face of the economic development principles of Alberta and B.C. and their indigenous and non-indigenous communities.
Canada has the single greatest coastline in the world. Canada as a trading nation must remain a global trading entity. Canada's environmental concerns must be preserved, but a balance must be achieved to ensure continued global trade.
I will leave you with the example of Norway, a country much smaller than Canada, which boasts a nominal GDP of $88,000 per capita, while Canada's comparable number comes in at $40,000 per capita. In Norway, the oil and gas industry is the backbone of its economy. To quote the minister of oil and energy, “It is the government's ambition that Norway shall remain a significant supplier of oil and gas to the world markets for a long time”. This industry is embraced by the people of Norway.
We encourage Parliament and this committee to achieve an equilibrium for west coast exports of all natural resources. We further encourage the committee to recognize the appropriateness of allowing Canadian natural resource producers to engage in global trade.
Thank you very much.
:
Starting on the question of expansion, I think you're absolutely correct in pointing to the fact that infrastructure does exist. For over 50 years there has been trade through the port of Vancouver, and that continues. The Kinder Morgan system is expandable, and even today I'm told that out of every 10 barrels that are shipped there, about one is heading to Asia.
I think what's important in terms of looking at public policy is to not foreclose market options. Whether the right choice is to incrementally expand the Kinder system and/or bring in a new system, the key is to leave that open to choices best made in terms of the scale of market development, timing, and the types of investments. I'm not convinced that it's an either-or.
With respect to regulatory decision-making, what I was trying to allude to is that when you're looking at sustainable development, it's very important that you look at questions of the environment within the context of what works for society, social communities, and the economics related to that. Integrated decision-making is a part of what came out in the Rio principles, as well as public participation.
Today you asked the question with respect to oversight. For any international or trans-provincial pipelines, we have the National Energy Board Act. It regulates the large pipelines that cross borders, which I believe makes a lot of sense, because they are contiguous with a vast network of pipelines in North America.
It's also important to ensure that the requirements of CEAA are met. As of this year, often that can be managed through a substituted process so that, again, you are able to do one project, one assessment.
I remain concerned that some of the permitting can take people off track very late in the game. In your deck, there are some photographs of required permits that are clearly not legitimately of high concern. Those are important to address in final construction design and not particularly relevant in large public interest decision-making. That's the sort of streamlining that will give us the ability to make consolidated decisions a little better than we do today.
:
Thank you, Mr. Chairman.
Perhaps my colleague will also ask a question afterwards.
First, I would like to say something which, to me, seems self-evident. The subject of our study is energy security in Canada. After everything I have heard this morning—we have talked about trade, prices, clients, more efficient deliveries—I feel we should call our study "Trade Security in Canada”. That would be more appropriate.
That being said, my question will be for Ms. Kenny.
Ms. Kenny, this project involves the construction of a pipeline to the west coast. We know that, since it was explained to us, there might be problems negotiating an agreement with aboriginal people, on the one hand. There certainly are environmental risks, because we don't know if we could deal within environmental disaster, if such a thing were to happen.
What do you think of this: instead of spending 5 or 6 billion dollars to build this pipeline, someone, somewhere, might say that it would be better to build a processing industry here?
In other words, we would continue to send our fuel via pipeline to the United States, and build the capacity here, spend our money and invest venture capital in the processing of products, and then we could send plastics or other products elsewhere in the world, but in a manner so as not to create environmental problems or problems with aboriginal people, which might happen as a result of the construction of a pipeline.
What do you think of this?
:
That question covers several different points. Let me try to respond.
First of all, in terms of focusing on energy security in Canada, my own view is that it's important to keep in mind that economic development can be a tool through which we enlarge other types of energy security. To walk away from the potential for $500-billion worth of government revenue in 20 years really cuts short the opportunity to provide for advances in renewables, technology investments, other sorts of energy system encouragements, moneys to municipalities to afford better built environments, etc.
So we have to think about an energy system, rather than just focusing on whether trading a barrel of crude creates a disadvantage for the future, because we clearly have an ample supply for the foreseeable future and beyond.
You also questioned spill response. I believe the regulatory review will do a good job of airing the facts around that: the risk factors, the response, the requirement, and the additional investments to improve navigation oversight. Certainly on the pipeline portion, I can tell you in detail about some of those sorts of factors that are routine beyond my statements, but I'm confident that can be addressed.
Finally, on the question of processing crude in Canada versus abroad, there are a lot of avenues to encourage market responses that are appropriate to meet Canadian needs and to make sure we optimize value for Canadians. Right now, the market signals are causing us to move those offshore. That's appropriate, and I don't think it has to be an either-or situation. You can establish good trade in one commodity. Keep in mind that a tube of steel can serve a lot of different products, so if in the future there were a choice to upgrade in Canada, we might be exporting gasoline.
The key is whether you have the right infrastructure in place to be a competitive global player. Are you addressing the safety and environmental issues appropriately and are you considering reinvestment for Canada's long-term security?