Legislative Assembly of Alberta The 30th Legislature First Session Standing Committee on Resource Stewardship Ministry of Energy Consideration of Main Estimates Tuesday, November 19, 2019 3:30 p.m. Transcript No. 30-1-12 Legislative Assembly of Alberta The 30th Legislature First Session Standing Committee on Resource Stewardship Hanson, David B., Bonnyville-Cold Lake-St. Paul (UCP), Chair Ceci, Joe, Calgary-Buffalo (NDP), Deputy Chair Bilous, Deron, Edmonton-Beverly-Clareview (NDP)* Dach, Lorne, Edmonton-McClung (NDP) Feehan, Richard, Edmonton-Rutherford (NDP) Getson, Shane C., Lac Ste. Anne-Parkland (UCP) Jones, Matt, Calgary-South East (UCP)** Loewen, Todd, Central Peace-Notley (UCP) Rehn, Pat, Lesser Slave Lake (UCP) Rosin, Miranda D., Banff-Kananaskis (UCP) Rowswell, Garth, Vermilion-Lloydminster-Wainwright (UCP)*** Sabir, Irfan, Calgary-McCall (NDP) Schmidt, Marlin, Edmonton-Gold Bar (NDP) Sigurdson, R.J., Highwood (UCP) Singh, Peter, Calgary-East (UCP) Smith, Mark W., Drayton Valley-Devon (UCP) Turton, Searle, Spruce Grove-Stony Plain (UCP) Yaseen, Muhammad, Calgary-North (UCP) * substitution for Lorne Dach ** substitution for Shane Getson *** substitution for Mark Smith Also in Attendance Horner, Nate S., Drumheller-Stettler (UCP) Support Staff Shannon Dean Clerk Stephanie LeBlanc Clerk Assistant and Senior Parliamentary Counsel Teri Cherkewich Law Clerk Trafton Koenig Parliamentary Counsel Philip Massolin Clerk of Committees and Research Services Sarah Amato Research Officer Nancy Robert Research Officer Michael Kulicki Committee Clerk Jody Rempel Committee Clerk Aaron Roth Committee Clerk Karen Sawchuk Committee Clerk Rhonda Sorensen Manager of Corporate Communications Jeanette Dotimas Communications Consultant Tracey Sales Communications Consultant Janet Schwegel Managing Editor of Alberta Hansard Transcript produced by Alberta Hansard Standing Committee on Resource Stewardship Participant Ministry of Energy Hon. Sonya Savage, Minister November 19, 2019 Resource Stewardship RS-205 3:30 p.m. Tuesday, November 19, 2019 minister’s time, makes it a total 10-minute block. Discussion should Title: Tuesday, November 19, 2019 rs flow through the chair at all times regardless of whether or not the [Mr. Hanson in the chair] speaking time is combined. Members are asked to advise the chair at the beginning of their rotation if they wish to combine their time Ministry of Energy with the minister’s time. If members have any questions regarding Consideration of Main Estimates speaking times or the rotation, please feel free to send a note or e- mail to either the chair or committee clerk. The Chair: I would like to call the meeting to order and welcome A total of three hours has been scheduled to consider the everyone. The committee has under consideration the estimates of estimates of the Ministry of Energy. The scheduled end time of this the Ministry of Energy for the fiscal year ending March 31, 2020. meeting is 6:30 p.m. With the concurrence of the committee I will I’d ask that we go around the table and have all MLAs introduce call a five-minute break near the midpoint of the meeting; however, themselves for the record. Minister, please introduce the officials the three-hour clock will continue to run. Are there any committee that are joining you at the table. I am David Hanson, MLA for members opposed to taking a break? Thank you. We will schedule Bonnyville-Cold Lake-St. Paul and chair of the committee. We will that in. continue, starting to my right. Ministry officials may be present and at the direction of the minister may address the committee. Ministry officials seated in the Member Ceci: Thank you. I’m Joe Ceci, deputy chair and the gallery, if called upon, have access to a microphone in the gallery Member for Calgary-Buffalo. area. Pages are available to deliver notes or other materials between Mr. Rowswell: Garth Rowswell, Vermilion-Lloydminster- the gallery and the table. Attendees in the gallery may not approach Wainwright. the table. Space permitting, opposition caucus staff may sit at the table to assist their members; however, members have priority to sit Mr. Loewen: Todd Loewen, Central Peace-Notley. at the table at all times. If debate is exhausted prior to three hours, the ministry’s Mr. Getson: Shane Getson, MLA, Lac Ste. Anne-Parkland. estimates are deemed to have been considered for the time allotted in the schedule and the committee will adjourn. Points of order will Mr. Sigurdson: R.J. Sigurdson, Highwood. be dealt with as they arise, and the meeting clock will continue to Mr. Yaseen: Muhammad Yaseen, MLA for Calgary-North. run. However, the timer for that speaking block will be paused. Any written material provided in response to questions raised Mr. Turton: Searle Turton, MLA for Spruce Grove-Stony Plain. during the main estimates should be tabled by the minister in the Assembly for the benefit of all members. Mr. Singh: Good afternoon. Peter Singh, MLA for Calgary-East. The vote on the estimates and any amendments will occur in Committee of Supply later this evening. Amendments must be in Mr. Rehn: Pat Rehn, MLA for Lesser Slave Lake. writing and approved by Parliamentary Counsel prior to the Ms Rosin: Miranda Rosin, MLA for Banff-Kananaskis. meeting at which they are to be moved. The original amendment is to be deposited with the committee clerk, and 20 copies of the Mrs. Savage: Sonya Savage, MLA for Calgary-North West, amendment must be provided at the meeting for committee Minister of Energy. I’ll introduce my team when I get started. members and staff. I now invite the Minister of Energy to begin with her opening The Chair: Okay. Thank you, Minister. remarks. You have 10 minutes. Mr. Sabir: Irfan Sabir, MLA for Calgary-McCall. Mrs. Savage: Well, thank you, and good afternoon. I’m here today Mr. Schmidt: Marlin Schmidt, Edmonton-Gold Bar. to present highlights from the Ministry of Energy’s 2019-2020 budget, and with any remaining time I’ll outline some of the The Chair: Thank you very much. ministry’s key priorities as included in our current business plan. I’d like to note the following substitutions for the record: Mr. Joining me today and at the table, starting at that end, is Martin Bilous for Mr. Dach, then also Mr. Rowswell for Mr. Smith, and Chamberlain, senior ADM; Grant Sprague, deputy minister; Mr. Jones for Mr. Getson for the latter part of the meeting. Douglas Borland, assistant deputy minister – he’s the guy who Please note that the microphones are operated by Hansard, and knows all the numbers, and this is sort of like Christmas for him to the committee proceedings are being live streamed on the Internet go over these numbers – Doug Lammie, assistant deputy minister. and broadcast on Alberta Assembly TV. Please set your cellphones Seated in the gallery are members of the ministry’s executive team and other devices to silent for the duration of the meeting. plus Mike Ekelund, ADM, and Adrian Begley, who is the CEO of Hon. members, the standing orders set out the process for the APMC, Alberta Petroleum Marketing Commission. consideration of the main estimates. Standing Order 59.01(6) We’re here to talk about Budget 2019. The Ministry of Energy establishes the speaking rotation while the speaking time limits are represents the interests of Albertans as the owners of oil and gas set out in Standing Order 59.02(1). In brief, the minister or member resources in the province. Through responsible resource of Executive Council acting on the minister’s behalf will have 10 development and the stewardship of energy and mineral resource minutes to address the committee. At the conclusion of her systems the ministry contributes to sustained prosperity at both the comments we begin a 60-minute speaking block for the Official federal and the provincial levels. Energy’s 2019-2020 operating Opposition, followed by a 20-minute speaking block for the expense budget is set for $601 million, excluding expenses for the government caucus. crude-by-rail program, which I’ll provide additional details about The rotation of speaking time will then alternate between the later, as well as amortization and carbon capture and storage grants. Official Opposition and the government caucus, with individual Of this funding, $289 million is allocated towards the Department speaking times set to five minutes, which if combined with the of Energy, which is largely used to cover staffing costs. The RS-206 Resource Stewardship November 19, 2019 department’s budget represents 48 per cent of the ministry’s changes and enhancements to the AER’s mandate, governance, and operating budget. systems operation. This action is long overdue. Since the regulator In addition, $312 million is distributed to regulatory agencies, was established six years ago, there have been significant shifts in which include the Alberta Energy Regulator and the Alberta the economic, environmental, and social landscape, but the AER Utilities Commission. The government does not provide any has not kept pace. Over the past few years Albertans have seen the funding to these organizations. These funds are collected from performance of the AER decline despite hiring more staff. industry through levies and funds, and those levies fund the We aren’t looking to overhaul our regulatory system, but through activities of the regulator. The Alberta Energy Regulator and the this review it will help us enhance the system that we have today. Orphan Well Association are fully funded by industry levies. The Also, through Budget 2019 Energy is taking several steps to reduce total operating budget, excluding amortization, for these two groups the financial risk placed on government and therefore taxpayers. As is $281 million, or 47 per cent of the ministry’s budget. The Orphan we’ve said repeatedly: our government should not be in the Wells Association is a delegated administrative organization with business of shipping oil.