I'm calling to order meeting number 82 of the Standing Committee on Transport, Infrastructure and Communities, pursuant to the order of reference of Wednesday, October 4, 2017, on Bill .
I'm very happy to welcome the officials here today to help provide the committee members with some very valuable information. From the Department of the Environment, we have Heather McCready, director general, environmental enforcement; Michael Enns, executive director, environmental enforcement; Marc Bernier, director, environmental science and technology laboratories; and Carl Brown, manager of emergencies science and technology section.
We also have, from the Department of Fisheries and Oceans, Gregory Lick, director general, operations. I have to acknowledge, since we're celebrating Navy Day and the Coast Guard, that Mr. Lick has received an award for his long-standing career and achievements and dedicated service to the Coast Guard. Congratulations, and thank you for your service.
We also have, from the Department of Natural Resources, Christine Siminowski, director of the Canadian oil, refining and energy security division, energy sector, and Kim Kasperski, director, environmental impacts, at CanmetENERGY.
Thank you all very much for being here today.
Ms. McCready, who would like to go first?
Thank you, Madam Chair.
Madam Chair, vice-chairs, members of the committee, as director of the environmental science and technology laboratories, science and technology branch, I supervise a team of scientists who undertake a research program to study the effects of spilled chemicals on the environment and the cleanup of spills.
Environment and Climate Change Canada has more than 40 years of experience in understanding and responding to oil spills. Much of the research on conventional heavy crude oil and fuels is long-standing; however, emerging challenges in recent years have included unconventional heavy products such as diluted bitumen. This research continues under the oceans protection plan.
The most basic part of the research involves understanding the physical behaviour and chemical nature of oil. ECCC has assessed hundreds of domestic and international oils and makes these results publicly available on the Internet. The ECCC oil catalogue is the largest publicly available oil-spill-related database in the world. The great majority of data are for persistent oil products.
In an effort to measure the composition of the oil, ECCC has also led research on the forensic identification of oil, which is used to determine the source of spilled oil. This is important for enforcement of Canada's environmental laws, which were used recently in cases such as Lac-Mégantic in Quebec and the MV Marathassa spill in Vancouver, British Columbia.
ECCC also studies the fate, effects, and behaviour of spilled oil. We look at the many ways in which an oil spill can change in, and interact with, the environment, including evaporation, emulsification with water, dispersion into water, mixing with sediments, and other mechanisms by which an oil may sink, for example.
We also have a special focus on how oils interact with shorelines, in particular how they can penetrate and become sequestered in riverbanks and marine shorelines.
All of this contributes to ECCC providing predictive models of the trajectory of a spill and its impacts on habitats and ecosystems as well as our communities.
Spill modelling is used not just for response to spills; it is also key to planning for contingencies and for assessing the potential impacts of new projects as they arise through the environmental assessment process.
ECCC also studies how to clean up oil spills using both traditional response techniques and newer alternative response techniques in both laboratory and large-scale experiments. ECCC has a major focus on the evaluation of the effectiveness and toxicity of spill-treating agents, including chemical dispersants and surface-washing agents. Much of this work leads to international standards to codify best practices for spill response.
ECCC has also led in the development of oil spill remote sensors and the assessment of oil contamination on shorelines. As an example of our work, I'd like to highlight recent studies on the potential for spills along the northern and southern coastlines of British Columbia.
First, we surveyed the BC shorelines, to understand the existing geology and biology, and also the existing background levels of oil-related chemicals. This is essential both for planning for potential spills and for understanding what the target endpoints for clean-up need to be following a spill.
Secondly we've examined the potential for heavy oils, both conventional ship fuels and non-conventional diluted bitumen, to sink and migrate, especially as small particulates in water, again using sediments and beach material taken from BC coast lines. The potential to sink, move with currents as particulates, and for penetration, or "stickiness", have been identified as major issues affecting spill clean-up in recent years with conventional oils like ship fuels and non-conventional oils like diluted bitumen.
All of this work is focused on improving Canada's capability to respond to marine oil spills including those involving persistent oils. Understanding how the properties of spilled oils change over space and time is critical to better predictive models of spill behaviour, which in turn enables better planning and response.
ECCC also plays a role under its mandate in enforcing environmental laws and regulations that pertain to the marine environment. While Transport Canada remains the federal government's lead for monitoring, regulating, and enforcement with respect to ship-source pollution, ECCC enforces the pollution prevention provisions of the Fisheries Act that prohibit any substance that is deleterious to fish from entering water frequented by fish, the disposal-at-sea provisions of the Canadian Environmental Protection Act, and the Migratory Birds Convention Act, which contains penalties for birds oiled at sea.
In summary, Environment and Climate Change Canada continues be engaged in Canada and internationally with governments, academia, the petroleum industry, spill responders, non-governmental organizations, and the public to identify oil spill research needs and establish priorities for future activities.
All of our stakeholders have identified the need to improve our understanding of the fate and behaviour of spilled persistent oils. Recent oil spill research and development activities undertaken by Environment and Climate Change Canada and other federal departments have led to an improved understanding of persistent and heavy oils.
I would like to thank the members of the committee for their time and welcome any questions that you might have.
Good afternoon, Madam Chair and committee members. It is my honour today, particularly on this Coast Guard and Navy Day, to thank you very much for the honour that you gave me.
I'm going to discuss the Coast Guard's role in supporting the government's commitment to creating a world-leading marine safety system. My remarks will focus on the Coast Guard's area of responsibility in monitoring vessels in and around Canadian waters, as well as our marine pollution response capabilities.
I shall start by pointing out that our marine pollution response and the monitoring of our waterways are both part of the Coast Guard's bread and butter. Assuring the safety of the longest coastline in the world is one of the pillars of our mandate. It's easy to measure safety in human lives saved—for us, 13 people are saved on average per day—but it also means ensuring that every one of our 243,000 kilometres of rugged coastline is protected from pollution events.
The Canadian Coast Guard monitors vessels navigating Canada's waters through its Marine Communications and Traffic Services network. On average, this means our MCTS radio officers are keeping an eye on 1,254 ship movements every day. We do this by providing our 12 MCTS centres across the country with cutting-edge maritime monitoring technology. On the west coast alone, we are implementing six new radar stations that will enhance our monitoring capabilities in the Vancouver Island Inside Passage area and throughout Seymour Narrows. Additionally, over the course of a six-year capital project that wrapped up in 2016, we've completely modernized our communications control systems, allowing for more effective monitoring of our waters.
We're proud of these accomplishments, but a big part of our agency's culture is the desire to always do more. That's why the oceans protection plan has invigorated the Coast Guard. The oceans protection plan solidifies the Coast Guard's role as the backbone of Canada's marine safety system, and the OPP is allowing us to beef up our MCTS network capabilities with the addition of 24 new members into those centres.
We've already begun to strengthen our 24-7 emergency response capacity by providing our members with the tools and resources they need to respond to marine emergencies and ensure a coordinated response that will better protect our waterways. Again made possible by the OPP, the operational network initiative aims to ensure full redundancy in our telecommunications network and provide contingency measures for enhanced business continuity. This way, if any kind of outage occurs, our services will remain online.
To keep our waterways, we must know who and what is on the water, but we also have to see what lurks beneath. Another component of the oceans protection plan is ensuring that hydrographic charting and navigation tools are helping to improve marine safety. To that end we've already surveyed four priority ports, including Vancouver anchorage, Prince Rupert, Port Alberni, and Stewart.
Also, and with the help of our partners, we've increased our eyes and ears on the water. One example is the Canadian Coast Guard Auxiliary, a Canada-wide network of hundreds of coastal communities whose 4,000-plus volunteer members contribute vital resources to Coast Guard-led marine pollution response efforts.
The oceans protection plan supports the Canadian Coast Guard's shift from being an agency that reacts to spills to one that can also help to prevent them before they even happen. One example of this is an increase in emergency towing capacity to rescue vessels in distress and avoid potential marine incidents. We're also installing towing kits on all major Coast Guard vessels and providing higher-level training for our crews to operate this new towing equipment. We're also leasing two offshore vessels capable of towing large ships in distress on the west coast.
Of course, the Coast Guard doesn't do this alone. We are currently engaging indigenous and coastal communities, industry, academia, and other key stakeholders to complete a needs assessment on emergency towing requirements on the west coast.
When a pollution event does occur, however, we are ready to respond. On average, Coast Guard personnel respond to three pollution incidents every day. If we take the west coast as an example, environmental response caches dot British Columbia's coast in 18 places, with three of them staffed in Richmond, Victoria, and Prince Rupert. When we receive word of a pollution event, we swiftly dispatch our resources to the incident.
As I stated off the top, the Canadian Coast Guard is on the front lines of supporting the government's commitment to creating a world-leading marine safety system and is expanding its marine pollution response and monitoring capabilities to meet this commitment.
Thank you, Madam Chairman and members of the committee, for this opportunity, and as with my colleague, I'd be happy to answer any of your questions.
Thank you, Madam Chair and members of the committee.
I am pleased to be here, along with my colleague Christine Siminowski, to represent Natural Resources Canada, together with colleagues from other federal departments.
Natural Resources Canada seeks to enhance the development and use of Canada's natural resources and the competitiveness of Canada's natural resource products. NRCan develops policies and programs and conducts innovative research in our facilities across the country. Our CanmetENERGY laboratory in Devon, located near Edmonton, has decades of expertise in the development of cleaner fossil fuels, refining, and related environmental technologies. Close to 130 scientists, engineers, technologists, managers, and support staff generate knowledge to help provide solutions to industry and advice to government policy-makers and regulators. This was the case when NRCan was called upon by Transport Canada last year to assist in developing this moratorium legislation.
More specifically, NRCan provided input on the chemistry, properties, and classes of hydrocarbons associated with petroleum production and their analysis. This was used to support the legislation's definition of “crude oil” and the products in the accompanying schedule that were designated as persistent, and hence banned for transport.
As mentioned, scientists and engineers at CanmetENERGY at Devon conduct research to understand and improve the production of fossil fuels, while reducing the environmental impacts of that production, and in particular heavy oil production. For example, this includes research on oil spill behaviour, including how a spill of diluted bitumen compares to a spill of conventional crudes, which complements the work carried out by our colleagues at Fisheries and Oceans Canada and Environment and Climate Change Canada, representatives of which join us today.
NRCan continues its work to ensure that the development of natural resources remains a source of jobs, prosperity, and opportunity for investment in Canada, while at the same time protecting the environment.
Canada is open to investment and remains one of the most globally competitive energy producers, including in the oil and gas sector. The government's approval last November of the Line 3 replacement and of the Trans Mountain expansion oil pipeline projects is expected to meet increasing demand for Canadian oil in North American markets as well as open new markets for Canada's producers on the Pacific coast and in Asia. Moreover, possible future exports of liquefied natural gas or propane, for example, would both be permitted under the moratorium.
We wish to thank the committee for this opportunity and are ready to answer your questions.
Does the department provide any advice? Does Environment Canada provide any advice to the minister when she asks if this is the right course of action to take?
What we heard from Eagle Spirit and the other indigenous groups was that if it's so bad, maybe the ban should be everywhere, or if it's good for some, it should be good for them too.
You can see that we as a committee are trying to use science, and we know that's an important term for government to use, yet we're throwing up our hands on this question.
I have one final question. I think I might have time. You mentioned the size of a tanker. I've read some information on the size of a tanker. Does Environment Canada do any modelling using 12,500 tonnes, which is the number in the bill? What would that look like if there were a disaster, versus a much larger amount of diesel fuel if it were, God forbid, to spill? Was any modelling done to say diesel is fine, but persistent oils are not so fine?
Moving on to the Nathan E. Stewart, which ran aground near Bella Bella in 2016, spilling more than 110,000 litres of its more than 200,000-litre fuel capacity, the spill impacted marine wildlife and altered the livelihoods of the members of the Heiltsuk Nation.
Cleanup efforts were repeatedly hampered by bad weather, and the vessel was not recovered until more than a month after it sank, I believe. If the tug's 6,600-tonne barge had been fully loaded when it hit the rocks, it could have spilled one-third of the volume of the 1989 Exxon Valdez spill of refined fuel.
This bill doesn't cover refined fuel products, so the threats of another Nathan E. Stewart remain. My question is this: does there need to be new legislation to cover spills like this, or how do we address this kind of spill, which seems large and affects a coastal community in a negative way? I'm not sure which department wants to take that.
Maybe I'll touch on it first in terms of our response capability and, as I mentioned at the very start, the increased monitoring capability that we're putting into our centre.
On the very first part of it, we're monitoring those vessels as they go through our waters. As I said to Mr. Hardie, Transport Canada is also looking more closely and inspecting those vessels. All that part is meant to help prevent spills and be better aware of the traffic going through our waters.
That is also being expanded through the oceans protection plan to allow other communities, including first nations communities, to have a better awareness of what traffic is going through their waters, or what they claim to be their waters. That awareness is very important for us to be better able to understand the risks going through our waters.
When and if something does happen, though, the initiatives we have to increase our environmental response capability, both currently and under the oceans protection plan, will help to deal with issues like the Nathan E. Stewart incident in Bella Bella.
We have a number of initiatives. One is to start to integrate first nations communities, particularly into the marine safety system but also into the environmental protection system, so that they can better support an incident response. That training is starting now, and we want to include as many communities across the west coast as possible. That initiative will eventually move across to other parts of Canada.
We are also increasing our environmental response capability, both in Prince Rupert and Port Hardy, where we're putting in another staff depot, near Bella Bella. While specifically we could put a depot anywhere across the west coast, we're looking at areas that we think are best able to help in responding to an incident.
From a monitoring point of view, better awareness of the traffic going through our waters, Transport Canada's role in increasing inspection for more risky types of vessels, and the increase in our response capability are all helping to reduce the risk from traffic on the west coast.
I'll touch on the first part of your question first.
With respect to limits and in terms of surveillance technology, all types of ship traffic that we're talking about, particularly the traffic that comes under the proposed moratorium that would prohibit over 12,500 tonnes, are required by law to carry the automatic identification system that transponds their signal, as well as a lot of other data about the ship itself. That is one of the primary systems that we use to monitor shipping through our waters across Canada, including the west coast in this case. That system is very reliable. It allows us to see exactly where the ships are.
I should talk a little bit about all the reporting that goes on before any of these ships come into our waters, the 96-hour PAIR report. That gives a whole range of information that ships need to report 96 hours before they even enter our Canadian waters. That includes the type of cargo, the ship's name, and all that type of information that we can use to assess the risk of that ship coming onto our waters.
The AIS, the automatic identification system system, is one of the main systems we use, but the other one that we use particularly is radar. That gives us a much closer, more accurate view, depending on where you are, of particular areas of risk that we see across Canada. In this case, we're talking about the west coast. We have radars on the west coast already in particular areas. We're installing six new radars on the west coast that will allow us to see particular areas that we feel are more at risk. The capital project that is installing those will go further than that later on as well.
That radar and AIS information gives us—I'm not going to give a percentage per se—a very accurate view of the traffic that we're talking about in our waters, anywhere from the barge traffic that Mr. Donnelly was talking about with the Nathan E. Stewart up to the largest tankers.
The traffic data is not much good as data itself. What we need to do is turn it into—and I'm being a little bit facetious here—information, really.
As we're looking at the traffic in real time, our radio officers at the MCTS centres are very much aware of and, in particular vessel traffic zones, are controlling the traffic as it goes through there. When we look at trends, we're not only looking at the trends in just how much traffic is going through, but where it is going through. That comes with our partners, Environment Canada, NRCan, and Transport Canada, to look at the risk and to look at the particularly sensitive areas that the traffic may be going through.
Then we are looking at plans to deal with a possible incident. We are looking at putting caches of environmental response equipment in particular areas of risk according to the environmental impact that it may have in those a particular areas and staffing those depots and so on. That whole planning process to look at risk, to look at sensitivities, and to look at impact is using that data to be able to have the best response, if needed.
Thank you very much, Madam Chair.
Thank you, all of you, for joining us today.
I too want to add my congratulations to you, Mr. Lick. I had the opportunity of meeting with members of the Navy League of Canada this morning. I join our chair and all those around the table.
One simply needs to look at the mandate letter of the to recognize that there really is a group effort when it comes to legislation like the legislation before us. I'll reference his letter. It says, “Formalize a moratorium on crude oil tanker traffic on British Columbia's North Coast, working in collaboration with the , the and the to develop an approach.”
Certainly, from the testimony we've heard from you today, it would seem that both Environment and Climate Change Canada and CanmetENERGY continue to be engaged in research on oil spill behaviour, including how a spill of diluted bitumen compares to that of conventional crude. I heard, though, someone suggesting that we already have many techniques that would address a diluted bitumen spill.
I'm wondering—and anyone can take the opportunity to answer this—what technologies are currently available. You said there are many techniques, but what technologies are currently available to remediate the effects of a spill of the products that are currently listed on the schedule? I believe it was Ms. Kasperski who stated that much of the work done by NRCan was used to create that schedule.
What technologies are available today?
Thank you very much, Madam Chair.
I'll add my voice to the chorus. Congratulations, Mr. Lick. I had the opportunity to meet with the Navy League this morning and I appreciate very much what you're doing.
Could you could give me a heads-up when I'm halfway through? I'm going to be sharing my time with Mr. Badawey. In that spirit, I hope the answers can remain as concise as possible.
First, there's a threshold in this legislation at 12,500 tonnes in terms of what's not subject to the moratorium. I'll start with Ms. Kasperski.
Is this a reasonable limit? From your perspective, is this going to meet the needs of the community? We've heard different suggestions for better amounts, but do you have any issues with the threshold?
I'll be quick and I'll wrap my questions up in one question.
The moratorium we're about to introduce looks at future impacts. Looking at the past, and contrasting the past with the future, if anything does and can happen, especially in other areas, have there been any records of site condition on lands or shorelines, site-specific risk assessments, phytotoxicological reports, lessons learned, and therefore protocols that are established or that are expected to move forward? As well, is there an expectation from the Department of the Environment for remediation with respect to incidents of the past over time, and of course for incidents that may happen in the future in other areas?
I know that's a loaded question.
I call the meeting back to order.
Before I introduce the witnesses, the clerk has given us a project budget for our clean water study.
Are there any comments or questions on that? Otherwise, I would ask that the committee move adoption of the budget that's before you.
An hon. member: I so move.
Some hon. members: Agreed.
The Chair: Thank you all very much.
Madam Clerk, there you go.
Hello to our witnesses. On this segment we have, by video conference from Prince Rupert Port Authority, Ken Veldman, director, public affairs, and from the Vancouver Fraser Port Authority, Peter Xotta, vice-president, planning and operations.
With us in the room we have Royal Vopak representatives. We have Marina Spahlinger, manager, regulatory and stakeholder relations, Canada, and Joel Smith, operations manager, province of Quebec, Vopak Terminals of Canada.
Would you like to start, Mr. Veldman?
I'm happy to. Thank you for inviting me here today.
I'll be focusing on the legislation's potential impacts on both current and future port operations and Canadian trade.
Measured by the value of trade that it facilitates, the Port of Prince Rupert is the third-largest port of Canada, and its volumes employ over 3,000 women and men in northern B.C. Competitive Canadian trade gateways not only add value to the industries, which use them for market access, but are significant economic generators themselves.
With respect to creating a moratorium on crude oil tanker traffic on B.C.'s north coast, we understand that protection of the marine environment is of paramount importance to Canadians. The environmental, cultural, and economic values associated with it are enormous. PRPA shares those values and considers environmental protection of lands and waters within the port to be a key element of its mandate.
It should be noted that the navigational approaches to and from the port are among the safest in Canada. This is a result of several factors, including relatively low marine traffic volume, uncongested and unrestricted marine approaches, a deep natural harbour, and short inland water transit times from the Triple Island pilot station. The low level of navigational risk has been quantified and validated by third parties.
Navigational risk is further mitigated by positive steps taken by PRPA, including investment in shore-based radar, navigational aids, real-time navigational data, and best-in-class practices and procedures that clearly describe rules to marine carriers for safe access to and from the port.
With that as context, I'd like to focus on the proposed schedule of products found in Bill .
The list found in the schedule is very broad and has not been accompanied by demonstrable evidence as to why items have been selected for inclusion. There are potentially several trade opportunities that may be negatively impacted beyond the core objective of bitumen. In fact, the legislation has the potential to eliminate existing supply chains and proposed marine services, as well as unintentionally impact future Canadian imports and exports through Prince Rupert, which would have significant economic consequences for the country.
For example, the inclusion of slack wax, a feedstock that's used to create petroleum wax products for Canadian manufacturing, impacts a service and existing capital plant and equipment that has been successfully operating in the Prince Rupert harbour for decades without incident. A vessel that transports slack wax only discharges a portion of its cargo in Prince Rupert, usually below the 12,500-tonne threshold being proposed. However, the total volume carried by that vessel would be impacted by the moratorium, and this could eliminate the service from the port.
The legislation also does not recognize the potential for port services that handle, but are not exporting, heavy oil. For example, a proposed marine fuelling service that includes a 12,500-tonne bunker fuel storage barge in the harbour is currently undergoing an environmental assessment. The capability to fuel large marine vessels at anchor in the port is a critical strategic service that the port needs as it strives to grow Canadian trade. An arbitrary storage limit is a potential hindrance to the development of these kinds of services.
The committee should also be aware that the production of refined petroleum and natural gas liquids is forecast to expand in Canada. In the case of refined petroleum products, while the bill's schedule omits several refined products, it also includes many of the products of the same production process, such as heavier oils and lubricants. The inability to market and maximize value for those heavier products would negatively impact the total economics of the refinery. Similarly, the inability for a future liquid bulk terminal to offer a full slate of refined and natural gas liquids would negatively impact its investment case as well.
Lastly, Transport Canada also notes that amendments to the schedule could be considered, following a regulatory review that would primarily assess whether the ability to clean up a spill has improved. While these criteria are rational to include, the exclusion of criteria specifically related to the empirical risk of an incident spill is a significant oversight. In an extreme example, conditions could be created that eliminated all risk of an incident, yet a product would still be banned under the moratorium because of the challenges of cleanup. Given the strategic attributes of Prince Rupert and our advantage of being arguably the safest port on the west coast of North America, this is a significant oversight in the legislation.
We have the recommendations that follow for amendments to Bill .
Number one, the legislation's schedule of commodities should be reviewed to ensure a full understanding of the trade, economic, and operational impacts of their inclusion.
Number two, the review should be based on demonstrable evidence for their inclusion and include robust consultation with industry and marine transportation experts.
Lastly, number three, the legislation should contain language that requires periodic quantified assessments of the risk of marine incidents in order to provide an improved context for the regulatory process of reviewing the schedule on an ongoing basis.
Thank you very much, Madam Chairman.
Thank you for the invitation to make some comments. While the oil tanker moratorium act does not directly impact Canada's largest port from an operational perspective in Vancouver's Lower Mainland, the Vancouver Fraser Port Authority is pleased to provide our perspective and to respond to any questions the committee may have.
For context, the Vancouver Fraser Port Authority, like other Canadian port authorities, is established by the Government of Canada pursuant to the Canada Marine Act and is accountable to the federal Minister of Transport. Our mandate is to facilitate Canada's trade objectives by ensuring that goods move safely while protecting the environment and considering local communities.
With regard to Bill , the Vancouver Fraser Port Authority assumes that government understands the potential economic impact for such a moratorium, given that there are very few suitable locations, particularly on the west coast, for movement of petroleum products, as was articulated by my associate from Prince Rupert.
Notwithstanding the fact that any future proposals would be subject to government's rigorous environmental and regulatory review process, this moratorium could create pressure on the southwest coast of British Columbia to develop capacity for future energy projects. In turn, that pressure could constrain capacity for other commodities that must travel through the lower gateway of the port of Vancouver, such as grain, coal, and containerized consumer and manufactured goods. Supply chains are complex, with multiple participants, and it's important to understand that other ports could not necessarily easily pick up the slack for one commodity or another.
Turning to the matter of tanker safety, I want to point out that tankers have moved safely into and out of the port of Vancouver for decades. Our related procedures go above and beyond the baseline requirements, and we revisit them regularly and update them. I'd be happy to go into more detail on that.
Even with the moratorium, the risk of spills from vessels with less than 12,500 metric tonnes of oil requires excellence in spill response. The port authority echoes its submission to the tanker safety panel of 2013, noting that the government has taken significant strides to address recommendations raised by that panel and by contributors like the port of Vancouver.
The oceans protection plan goes a long way to addressing our concerns. We're aware that the government is aggressively moving to ensure the Canadian Coast Guard is adequately funded to respond to and manage spills in local waters, including being trained and resourced to provide comprehensive leadership.
We also recommended that local communities and individuals, including aboriginal peoples, must be involved in spill response plan development, oversight, and response, and fisher personnel and their vessels must be incorporated into a response strategy, particularly in remote locations, to provide an additional level of support. We're certainly pleased to see government acting in this regard also, through the oceans protection plan.
We reiterate the need for strategic placement of appropriate spill response equipment in locations of higher risk, which would lessen response times and improve response capabilities. The announcement of new Coast Guard stations on the west coast is an important step in the right direction, if they are in a position to provide such response.
The port is also optimistic that government will continue to implement the recommendations of the tanker safety panel. We believe there is a good level of understanding that the moratorium is only part of the puzzle in protecting our precious coastlines.
Lastly, the port authority encourages the committee to consider the work of unbiased voices, such as the Clear Seas Centre for Responsible Marine Shipping, an independent research centre that promotes safe and sustainable marine shipping in Canada. Clear Seas has now been established for over two years and is well positioned to provide support to government in the event that it may need to consider future policy changes with regard to Bill .
Again, thank you for the opportunity to comment. I look forward to your questions.
Thank you, Madam Chair.
On behalf of Royal Vopak, I would like to thank you for the opportunity to provide comments regarding Bill .
We are an international tank storage company with a 400-year history and a strong focus on safety and sustainability.
As an infrastructure and service provider, we ensure efficient, safe, and clean storage in the handling of bulk liquid products and gases for our customers around the world. Our purpose is to store vital products with care. We currently operate 66 terminals in 25 countries, with a combined storage capacity of 35.9 million cubic metres. Four of these terminals are located in Ontario and Quebec, and we recently expanded our business to British Columbia, where we have a 30% interest in a new propane export terminal that is currently being built. Including our joint ventures and associates, we employ a work force of over 5,500 people globally.
Canada is a beautiful country, and we feel privileged to be doing business here. We appreciate Canada not only for the business opportunities it presents but also for continuously striving to be an environmental leader. We certainly enjoy Canada's pristine environment and we perfectly understand why you want to protect it.
That said, many of our terminals around the world are located in or near pristine natural environments, and our experience has shown that economic development and environmental protection can go hand in hand.
Let's consider the economic context of this moratorium. According to Natural Resources Canada, Canada was the sixth-largest energy producer in the world in 2016, yet 97% of oil and gas exports from Canada were sent to the U.S. The National Energy Board projects that net exports of Canadian energy will continuously increase until 2040. However, domestic petroleum consumption in the U.S. is expected to remain relatively flat over that same time frame.
Meanwhile, the U.S. Energy Information Administration projects that China and India will drive a 39% growth in liquid fuels consumption in non-OECD countries from 2015 to 2040, and that's due to rapid industrial growth and increased demand for transportation.
The moratorium as it is currently proposed would cut off a direct route to take advantage of this Asian market. This will continue to expose Canada to steep discounts on energy products that it can only sell to the American market. This raises the question of why Canada would expose itself to such a serious economic risk, particularly when you look at other economic consequences of such a decision, such as forgone tax revenues or employment opportunities.
As it stands, the moratorium is not supported by an independent scientific risk assessment that justifies why crude oil or persistent oils are included in it. This creates uncertainty for us and leads us to wonder what other items could be included in the future.
Additionally, there is no end in sight for the proposed legislation, as it does not include an end date. It is safe to say that this moratorium, if implemented, would set a worrying precedent that could make it riskier to conduct business in Canada.
Seven initiatives are currently being conducted by the Government of Canada to increase marine safety that we hope are being considered as part of the development of this legislation. These include, for example, the creation of lower-impact shipping corridors in the Arctic and aerial response planning pilot projects to help Canada adopt a regional risk-based marine preparedness and response system.
At the very least, we respectfully ask that Bill be amended to include an end date to the moratorium, as well as the process and the criteria for the inclusion and removal of items from the list of persistent oils.
Madam Chair, Vopak is keen to contribute to both economic growth and environmental protection. We would therefore be happy to engage in further discussions and share our expertise, should that be of any use.
Thank you again for the opportunity to talk to the committee.
Thank you, Madam Chair.
Thank you to all the witnesses for being here.
I'll pick up on that point.
Inevitably, this committee finds itself in some cases stuck between extremes. On the one hand, there might be environmental groups that want nothing to happen, and on the other, there might be people dangling large amounts of money in front of other people to try to make things happen. That's a little bit inflammatory, I know, but in fact what I've heard you say today is that we have to consider the economic impacts. At the same time, we're being asked to consider what may happen if we have an adverse event up on the north coast or on the south coast.
I guess I'll start with you, Ms. Spahlinger. I understand that you are here on behalf of your company, and your company, like all companies, is looking for surety, clarity in regulation, etc. You're concerned that Canada could send not very good signals to the world in terms of our willingness to do business. What would you say to the indigenous groups that have appeared here, that have also been shown a large amount of money if they wanted to basically play along, and have said no?
I understand all that, sir. I'm sorry, but my time is limited, so I need to get to another question for you.
I have to say that prior to the Exxon Valdez running aground in Alaska, everybody thought everything was fine there too. There hadn't been anything like that happen before. However, it happened once, and that was obviously one time too many, which again presents the conundrum we're facing: the worst thing that could happen. Especially with the kinds of products we see being shipped, that could be extremely difficult, much more difficult to deal with than the Exxon Valdez.
You may have helped answer a question, though, that's been rattling about here for a bit, and that is with regard to the threshold of 12,500 tonnes. Is that the amount you would have to have available on a barge for ship-refuelling purposes when they come into Prince Rupert?
As I was noting, even though I'm a veteran member of Parliament, I haven't been sitting on a committee for a few years. I am here as a substitute for a regular member, so I'm slowly learning about this bill, and I have to say, from what I've learned today, that the real impact of this bill would be on some shipments of slack wax and not much more, because unless I've got this really wrong, unless there's a northern gateway project or a pipeline built, there are not really any significant shipments in the area that are going to be impacted.
I'll direct this to the gentleman from Prince Rupert, and if anyone else wants to answer, please do.
Am I the only one who's looking at this and thinking the practical impacts of this bill really say this is a solution in search of a problem? There doesn't seem to be anything being banned except maybe potentially slack wax, which I don't think is a major environmental problem. Spills of slack wax just aren't huge.
Am I missing something? If there's no pipeline built, why are we so worried about this legislation? Could anyone answer that question for me? Does the gentleman from Prince Rupert want to respond?