Thank you, Mr. Speaker. I want to make a couple of comments on this motion. First of all, the 16th Legislative
Assembly has made a commitment to action that will help ensure our environment sustains present and future generations. That will be done through the implementation of alternate energy substitutes for diesel fuel, such as wood pellet boilers, natural gas turbines, wood turbines, hydroelectric power. We’re working to ensure that the Northwest Territories continues to reduce our dependency on fossil fuels.
The State of California recently introduced low carbon fuel standards, a policy similar to what the Member has proposed here today. The policy is meant to reduce the reliance on petroleum-based fuels for transportation use and also to reduce greenhouse gas emissions by increasing the use of ethanol-based blended gasoline and biodiesel fuels. While this product can work well in the larger, warmer climates such as California, it has been
demonstrated that these biofuels are not suitable for use in the extremely cold weather. Their use in the Northwest Territories is not recommended by our suppliers at this time.
Our fuel supplied to the PPD must adhere to the Canadian General Standards Board’s cold climate specifications. And in addition to that, there is only a limited amount of ultra low sulphur diesel fuel and winter grade gasoline produced to these specifications for our own use here in the Northwest Territories. If we were to choose to limit or totally cut ourselves off entirely from the supply, we would run the risk of being unable to obtain fuel that meets our needs. We’re talking about 18 communities that are serviced by PPD. We’re also talking about 20 of our NTPC sites and also for our own use in different areas of our departments.
A large portion of our fuel is purchased by PPD and that is sourced from the west coast of North America and Asia and then shipped to the Western Arctic for distribution to NWT communities. In 2008 nearly half of PPDs fuel supply was purchased outside of Canada and it is planned that this will continue in 2009 and also into the future years.
The feedstock for this fuel is not extracted from the oil sands but rather from conventional means. For the 2008 summer marine resupply, most of the diesel fuel was supplied by a refinery located in the State of California and Jet A-1 aviation fuel was supplied by a South Korean refinery. The rest of the diesel, gasoline, and Jet A-1 aviation fuel that was delivered by tug and barge was obtained from Imperial Oil’s refinery in Alberta.
Imperial Oil refines crude oil for western Canada at its Strathcona refinery near Edmonton and obtains crude oil from unconventional sources -- oil sands and deep heavy oil sources -- as well as conventional crude oil from Norman Wells and other locations. Shell Canada refines crude oil for western Canada at its Godford, Alberta, refinery. This fuel is refined entirely from oil sands products. Bluewave Energy, a Shell Canada branded reseller, was the only compliant bidder for the PPD supply contract to provide fuel to communities served by the winter road.
Fuel purchased by PPD for communities served by winter road is shipped through the Hay River Imperial Oil terminal. During the winter months, the petroleum products that are originally from Shell and from Imperial Oil are combined in the tanks at Hay River; diesel fuel with diesel fuel and gasoline with gasoline according to specification, not segregated according to the manufacturer.
About half the oil produced in Canada now originates from the oil sands. There’s a limited conventional crude available. So virtually all
petroleum refined in western Canada contains some oil sands product. A policy that would prohibit or limit the ability of PPD or any other NWT supplier or distributor from obtaining fuel that is originating in the oil sands or was only produced by conventional means would likely mean and likely result in higher costs of such non oil sands fuel and, more importantly, result in an increased cost of living for Northwest Territories residents and businesses.
The Government of the Northwest Territories is investing in alternative energy substitutes such as wood pellet boilers, natural gas turbines, wind turbines, hydroelectric power, the proposed $60 million investment in energy initiatives announced in the 2009 budget speech. The GNWT will do more to reduce the NWT’s reliance on fossil fuels than will developing procurement policies or prohibit and limit the purchase of petroleum fuel that comes from the oil sands.
A number of biomass heating projects funded under the Capital Asset Retrofit Program are planned for implementation in 2009-2010. Energy saving initiatives include the use of cold weather air-to-air heat pumps and conversion of three GNWT buildings in Fort Smith to electric heat using surplus from the Taltson Dam. Projects funded under the Canada Eco Trust in 2008-2009 include the wood pellet boiler in Behchoko, the electric heat conversion of the DOT garage in Fort Smith, wood pellet boilers in Kalemi Dene School in Ndilo. These projects are estimated to result in a total cost savings of approximately $1.1 million a year, reduce greenhouse gas emission reductions by more than 4,100 tonnes per year, and displace nearly 1.4 million litres of diesel fuel annually.
Potential future projects will result in further permanent reductions in petroleum consumption. In addition to initiatives, Public Works is also performing asset renovations and upgrades to reduce energy use in buildings, including: improved insulation; the retrofit of lighting; the replacement of windows, doors, heating systems and installation of solar domestic hot water systems. The Good Building Practices for Northern Facilities guidebook is now being updated with the focus on the design and construction of energy-efficient buildings for the Northwest Territories. These efforts will all serve to effectively reduce our consumption of fossil fuels and provide measurable results and cost savings and a significant reduction of greenhouse gas.
It is more constructive and better for the environment to continue to invest in new technology to actually reduce the consumption of diesel fuel than to develop a policy that would limit the ability of PPD or any other NWT supplier or distributor from obtaining fuel that originated in the oil sands or was only produced by conventional means. Such a policy will not result in less diesel fuel being
consumed, but will mostly likely result in higher costs of such non oil sands fuel and, more importantly, result in increasing the cost of living for NWT residents and businesses.
Such a policy if applied to the non-government sector would also adversely impact resource development, such as a policy means only increasing the cost of exploration and exploration development.
As with our practice, this motion is a recommendation to the government and Cabinet will not be voting on this motion.