43rd PARLIAMENT, 2nd SESSION Standing Committee on International Trade EVIDENCE NUMBER 029 Friday, May 7, 2021 Chair: The Honourable Judy A. Sgro 1 Standing Committee on International Trade Friday, May 7, 2021 ● (1300) the opportunity to join you in this important discussion your com‐ [English] mittee has undertaken. The Chair (Hon. Judy A. Sgro (Humber River—Black My name is Tim McMillan. I represent the oil and gas producers Creek, Lib.)): Welcome to all of the committee members and wit‐ in Canada. I'll tell you a little bit about our association. We repre‐ nesses. sent both large and small companies that explore, develop and pro‐ Today is meeting number 29 of the House of Commons Standing duce natural gas and oil throughout Canada. Our member compa‐ Committee on International Trade. Today's meeting is webcast and nies produce about 80% of both of those commodities. With them is taking place in a hybrid format pursuant to the House order of and our associate members, who are involved in the service side of January 25. our business, we generate about $116 billion worth of revenues a year, and we make up the largest component of Canada's exports. Before we start with our witnesses, Mr. Savard-Tremblay, you is‐ sued a notice of motion regarding Bill C-216. All of the members I know that today we'll be speaking specifically about technology have it. Can I suggest that we reserve 15 minutes at the end of the and clean exports. I will get into that in a moment, but we believe meeting to discuss it, or do you want to discuss it now? that responsible oil and gas development, driven by technology and innovation, is essential to a healthy Canadian economy. [Translation] Mr. Simon-Pierre Savard-Tremblay (Saint-Hyacinthe— Our industry recognizes the importance of delivering reliable, af‐ Bagot, BQ): That is precisely what I wanted to ask you, fordable, and responsibly produced energy that addresses important Madam Chair. social and environmental issues, including climate change. We be‐ lieve that Canada's oil and gas has a critical role to play in an inte‐ The fact that you are suggesting it is perfectly fine with me, and I grated energy system, and is part of the global solution needed to thank you. tackle climate change. CAPP believes Canada is well-positioned to [English] become a global supplier of choice. World energy demand is grow‐ ing, and we have some of the highest quality reserves in the world. The Chair: Thank you very much, Mr. Savard-Tremblay. Resuming our study on clean technology exports, pursuant to Canada is obviously an environmental leader in general, and we Standing Order 108 and the motion adopted by the committee on take our ESG responsibilities very seriously. I think that when we Friday, March 12, THE committee will resume its study of look at oil and gas producers globally, Canada truly stands out, and Canada's exports of environmental and clean technology goods and when you look at the world's top 10 producers of both of those services. commodities, we are unique. The other nine include Saudi Arabia, Iran, Iraq, Nigeria, Venezuela—countries that just don't share our Before us today, as witnesses for this study, we have, from the capacity to innovate, drive technologies, or implement them on the Canadian Association of Petroleum Producers, Tim McMillan, ground. That gives us a unique role to play, and I'll speak to that president and chief executive officer; from First Cobalt Corp., Trent more in the moments ahead. Mell, president and chief executive officer; from the International Brotherhood of Electrical Workers, Matt Wayland, executive assis‐ On innovation and technology, almost 40% of all clean-tech and tant to the international vice-president and Canadian director of green-tech investments made in Canada are made by the oil and gas government relations, and Ross Galbraith, international representa‐ industry. We have seen studies recently that say that as much as tive; and from Pyrowave, we have Jocelyn Doucet, president and 70% of green and clean innovation spending comes out of the oil chief executive officer. and gas sector, but we use a number of a little less than 40%, and it's having a great effect. Welcome to all of you, and thank you for taking the time to ap‐ pear before the committee today. Over the last decade, the oil sands, for example, have seen an over 20% reduction in greenhouse gases per barrel. According to Mr. McMillan, you have the floor, please. IHS CERA, a research group, it is predicted that over the next Mr. Tim McMillan (President and Chief Executive Officer, decade, innovation and technology will continue to drive a further Canadian Association of Petroleum Producers): Thank you for 20% to 25% emissions reduction. 2 CIIT-29 May 7, 2021 As I noted earlier, other countries that are producing large I would like to highlight the other technologies that are currently amounts of energy globally don't have this capacity. I think that coming through the process. In the recent budget, there is the car‐ Canada has a responsibility to develop these technologies and inno‐ bon capture tax credit. We have 90 days of consultation to ensure vations and, ultimately, see them adopted globally. We most cer‐ that it will be a workable model that can continue to allow Canada tainly are seeing that happen. to drive down its emissions. Other contexts that I think would be important are the following. I would highlight some serious concern that enhanced oil recov‐ If we look at energy demand globally, it is growing. It is growing ery was specifically excluded from that tax credit. I think that across the board—every energy source, including oil and gas. We should be reversed if we want to ultimately reach the objective are expecting, according to the International Energy Agency's best- we're all looking for. case scenario, to get back to record demand for oil and gas as early as 2023. We will continue to see both of those commodities grow‐ Some of the funding around IISD to enable infrastructure to be ing aggressively to 2040, the end of that forecast. Gas will grow ag‐ built is going to be very positive. gressively, but oil will continue to grow at a slower pace. By 2040, the International Energy Agency expects that oil and I would be happy to take questions at the conclusion, but ulti‐ gas will grow to a level of over half of all energy consumption mately, maybe the last message I would leave with the committee globally, meaning that gas will overtake coal for the first time, before I conclude is that Canada needs to be competitive. We need which brings me to the largest single opportunity Canada has to to be attracting investment in our energy resource development if lower global greenhouse gas emissions. we want to develop the technologies that are used here and ulti‐ mately exported around the world. Today, there are almost 300 coal-fired power plants under devel‐ opment and under construction. Canada will have the lowest emis‐ Over the last five or six years, we have seen a decrease in capital sion LNG, once our first major LNG facility is completed. We have investment in the energy sector in Canada, from over $80 billion to done some work to look at this. If Canadian natural gas were to be about $27 billion this year. That's a substantial decrease. I think used to offset the new build-out of coal in Asia and around the there is a lot of room for growth, a lot of opportunity, and I look world, we would actually only need four facilities, the size of the forward to your questions about how we can contribute into the fu‐ one that's currently under construction, to entirely meet Canada's ture. Paris commitment. ● (1305) Thank you, Madam Chair. We've looked at the numbers another way, that if the almost 300 ● (1310) coal-fired power plants under development and construction were offset with Canadian natural gas, the savings of greenhouse gases The Chair: Thank you very much, Mr. McMillan. globally would be more than Canada's entire greenhouse gas emis‐ sions today. We would be at net zero if we just took on the respon‐ We will move on to First Cobalt. sibility of offsetting the current build-out of coal. Mr. Trent Mell (President and Chief Executive Officer, First There are a couple of challenges for Canada to meet that objec‐ Cobalt Corp.): Thank you, Madam Chair. tive, which I would like to highlight for the committee. [Translation] One is the ability to recognize those reductions, which were set aside in article 6 of the Paris Agreement to recognize international I would like to thank the members of the Standing Committee on offsets. That is the one article of that agreement that has not been International Trade for undertaking a study on Canada's exports of finalized. Until it is finalized, the strong efforts by Canada to con‐ environmental and clean technology goods and services. tinue to drive down our emissions per barrel, per gigajoule of gas cannot be recognized and there is no incentive for Canada, or in‐ creased incentive, to offset those coal-fired power plants and no in‐ Our presentation will focus on the export of batteries, specifical‐ centive for China or India or the other countries to get Canadian gas ly batteries for electric vehicles, and Canada's unique position to to do their part to offset it as well.