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									FUELING OUR FUTURE:
STRATEGIC ENERGY POLICY OPPORTUNITIES
FOR CANADA

OUTCOMES REPORT
JANUARY 24, 2005
THE PUBLIC POLICY FORUM

Striving for Excellence in Government

The Public Policy Forum is an independent, non-profit organization aimed at improving
the quality of government in Canada through better dialogue between the public, private
and voluntary sectors. The Forum's members, drawn from businesses, federal, and
provincial governments, the voluntary sector and the labour movement, share a common
belief that an efficient and effective public service is a key element in ensuring our
quality of life and global competitive position.

Established in 1987, the Public Policy Forum has gained a reputation as a trusted, neutral
facilitator, capable of bringing together a wide range of stakeholders in productive
dialogue. Its research program provides a neutral base to inform collective decision
making. By promoting more information sharing and greater linkages between
governments and other sectors, the Public Policy Forum ensures that Canada's future
directions become more dynamic, coordinated and responsive to the challenges and
opportunities that lie before us.

Public Policy Forum
Forum des politiques publiques
1405-130 Albert Street
Ottawa, ON KIP 5G4

Tel.: (613) 238-7160
Fax: (613)238-7990

www.ppforum.ca
ABOUT THE CONFERENCE

This conference was organized under the direction of Yves Poisson, Director of Special
Project, Public Policy Forum with the active involvement of Geneviève Lépine, Senior
Research Associate, Erika-Kirsten Paupst, Research Associate, Dianne Gravel-Normand,
Project Assistant and the assistance from Beth Everson, Director of Communications,
Kelly Cyr, Senior Project Assistant and Julia Oliveira, Project Assistant


ABOUT THE AUTHORS

This report was prepared by Geneviève Lépine, Senior Research Associate, under the
direction of Yves Poisson, Director of Special Projects, Public Policy Forum.


ACKNOWLEDGEMENTS

The Public Policy Forum initiated and managed this research project with the support and
assistance of: Natural Resources Canada; Environment Canada; Bruce Power; the
Canadian Energy Pipeline Association; EnCana; the Government of Alberta; Industry
Canada; Suncor Energy; Western Economic Diversification Canada; the Canadian
Chemical Producers’ Association; the Canadian Nuclear Association; IPSCO, Imperial
Oil / ESSO; Dow Chemical; Atomic Energy of Canada; the Government of Ontario; and
the Energy Dialogue Group.
TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................................................ I

INTRODUCTION ................................................................................................................... 1

SUMMARY OF DISCUSSION ................................................................................................. 1

  Pre-Conference Presentation – Survey Findings: Rethinking Energy and
  Sustainable Development ............................................................................................. 1
  Investing Today for Tomorrow’s Energy ................................................................... 3
  An International Perspective ....................................................................................... 4
  Leaders Panel I: North American Energy Demand.................................................. 5
  Provincial and Territorial Perspectives on the Future of Energy............................ 9
  Breakfast Presentation: Vision and Strategy for Green Power in Canada........... 11
  Leaders’ Panel II: New Sources of Energy Supply and Sustainability................. 12
  Canada’s Energy Future ............................................................................................ 16
  Leaders’ Panel III: Developing the Conditions for Success and the Role of
Innovation........................................................................................................................ 17

ANNEX 1 – AGENDA .......................................................................................................... 27

ANNEX 2 – CONFERENCE PARTICIPANT LIST .................................................................. 32

ANNEX 3 – SPEAKERS’ BIOGRAPHIES .............................................................................. 40

ANNEX 4 - NOTES FOR AN ADDRESS BY THE HONOURABLE DWIGHT DUNCAN,
MINISTER OF ENERGY, GOVERNMENT OF ONTARIO ...................................................... 54

ANNEX 5 – PRESENTATION NOTES – DR. ROBERT SKINNER, OXFORD INSTITUTE OF
ENERGY STUDIES.............................................................................................................. 59

ANNEX 6 – ADDRESS BY THE HONOURABLE JOHN EFFORD, MINISTER OF NATURAL
RESOURCES, GOVERNMENT OF CANADA ........................................................................ 71
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EXECUTIVE SUMMARY

On November 29 and 30, 2004, the Public Policy Forum held Fueling our Future:
Strategic Energy Policy Opportunities for Canada. This conference aimed to create a
better understanding of the issues and challenges facing the energy sector and promote
dialogue on a national approach to meeting Canada’s needs. Participants included some
160 representatives from the private sector, industry associations, and environmental
groups as well as federal and provincial governments.

Through this conference, the Public Policy Forum hopes to contribute to the development
of a sound, long-term strategy that promotes a sustainable approach to energy
development, smarter use of energy by consumers, and a strong future for energy
suppliers.

Some 28 prominent speakers addressed participants during the conference. They included
the Hon. John Efford, Minister of Natural Resources; the Hon. Dwight Duncan, Minister
of Energy, Ontario; the Hon. Joseph Handley, Premier, Government of the Northwest
Territories; Dr. Robert Skinner, Director, Oxford Institute of Energy Studies, U.K.; Mr.
Tim Hearn, CEO, Imperial Oil; Mr. Hal Kvisle, CEO, TransCanada; Mr. Patrick Daniel,
President & CEO, Enbridge; and Mr. Ken Ogilvie, Executive Director, Pollution Probe.
All speeches and presentations made at Fueling Our Future are available on-line, at
www.ppforum.ca.

The Challenges

Canada’s energy future rests on our ability to identify new, environmentally sustainable
options to replace and augment supply while slowing the growth in demand for energy
through efficiency improvements. Defining the end goals is relatively easy – the real
challenge lies in developing a course of action that will achieve these goals.

Our country’s economic future is closely linked to its energy future. Stresses on energy
systems have grown and are growing. Conference participants agreed that:

   •   Ensuring a sustainable energy supply will be the overarching challenge.

   •   All sources of energy, traditional and unconventional, will be needed in order to
       address our needs for energy and export competitiveness in the future.

   •   Traditional sources will continue to be key. However, we will also need to
       develop new sources of conventional energy while developing unconventional
       sources, including renewables.

   •   R&D and investments in technological advancement hold the key to the
       development and competitiveness of new conventional and unconventional
       sources.
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 A clear consensus emerged from the conference that Canadians need to improve their
 energy efficiency in every way possible while addressing supply challenges. There was
 also strong endorsement of the message put forth by Minister John Efford, namely the
 need to espouse the energy sector’s four key pillars: an open market; respect for
 jurisdictions; smart regulation; and a clearly articulated energy strategy for Canada,
 arrived at through a collaborative process of honest debate, and coupled with focused
 interventions to meet public goals.

 Participants agreed that there is a need to remove impediments to the market’s ability to
 respond to fluctuations in supply and demand. While conference participants stated that
 the emphasis should be on market-based decision-making, they agreed that there is an
 important role for the public sector to play.

 The Regulatory Approval Process is long and complex

 Canada is blessed with tremendous resources and technological potential. However, the
 complexity of the regulatory approval process poses a serious challenge to energy
 development. Canada needs a high-level energy framework that includes:

        •   federal-provincial involvement; and

        •   an articulation of the objectives of an overall energy “policy” or strategy for
            Canada.

 An Energy Strategy is needed

 Collaboration will be crucial to the success of Canada’s energy strategy in the long term.
 Participants emphasized the need for a provincial, territorial and federal commitment for
 clear and certain regulation of the sector. They agreed that the federal government should
 co-ordinate intra-governmental regulation. Governments also have a role in easing the
 transition between technologies and the resulting price differences.

 It will be difficult to arrive at a framework that all players in the sector will approve.
 Energy stakeholders have individual and at times conflicting interests, and various energy
 users must compete for the different resources available. That reality is compounded by
 the seemingly insatiable demand for energy emerging from the United States. The world
 market for energy is increasingly competitive. It will be important to maximize the value
 of our resources by adding value to the products we export and diversifying our energy
 products.

 Integrated Energy / Environmental Framework

 Environmental considerations will be a significant component of any national energy
 strategy. The interface between environment and energy is going to expand over the
 course of the next few years. More attention will be placed on climate change, and the
 growth in demand will increase pressures to exploit environmentally fragile areas. We
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will need an integrated energy / environment framework, with a common approach to
greenhouse gas emissions, supply, and use of land and aquatic environments.

With regard to climate change, the Kyoto Protocol is a legally binding commitment, and
some participants stated that it is currently not supported by policy. Minister Efford
pointed to the Government of Canada’s commitment of more than $3.7 billion to energy
efficiency, renewable energy programs, clean energy R&D and other climate change
measures put in place since the 1990s as examples of policy mechanisms that support our
Kyoto commitment. A new spirit of consensus is emerging between the industry and
environmental communities. Renewables and clean carriers of energy will have an
important role to play in our energy future. However, in the past, we may have
underplayed some of our energy options. Three different kinds of policies could help
bring renewables to market:

1. Stage-setting policies: direct government action through information programs and
modest subsidies to consumers;

2. Consolidation policies: efficiency and emission regulations for laggards; progressive
environmental fiscal reform (EFR); progressive emission caps and trade with a safety
valve; and,

3. Policies to drive profound technological change: subsidies to R&D and new
technologies; regulated niche markets such as vehicle emission standards; renewable
portfolio standards and carbon capture and storage standards.

Many argued in favour of introducing tax incentives to help encourage the introduction of
new energy sources into the market. However, some questions remain, namely: would the
market by itself generate the capital needed? Is the cost of renewable sources higher than
conventional sources? Are there “public good” reasons to move to a new source of
energy, other than the private good of the market?

Beyond Kyoto?

Minister Efford asserted that “we need to talk about what we are already doing in this
country when it comes to working and dealing with climate change,” in order to provide
Canadians with a clear picture of the efforts already being deployed. Many participants
expressed a need to move beyond Kyoto Protocol commitments and onto carbon
management, advocating that all technological solutions should be treated equally,
regardless of the sector—the criteria for selection and development should be carbon
management.

One panelist suggested that industry:

a) Present a radical vision for a zero-emission energy future, which would involve
extensive public education backed by strong policy proposals;
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 b) Lobby governments for policies that motivate profound technological change, do not
 wreak short-run economic havoc, and create a level playing field.

 Canada has one of the most energy-intensive economies in the world. We are one of the
 largest energy producers in the world. Energy is one of the most critical elements in
 Canada’s relations with the United States, and one of most complex jurisdictional issues
 within our country. Energy is a fundamental pillar of the economic success of many
 remote and First Nations communities, especially in the North. Aboriginal groups are
 ready to participate in and reap the benefits of development. However, there are historical
 reasons why we have not already developed an energy framework. As one participant
 stated, “An energy policy of the future will have to resemble a laser insertion, more
 focused and more specific than in the past.”

 A need for an energy framework

 Stakeholders agreed that there is now an urgent need for an energy framework or strategy
 in Canada that incorporates respect for jurisdiction, and an understanding of the role of
 markets. They also noted that conventional fuels will continue to play an important
 role—they should be made cleaner rather than be discarded altogether.

 Another participant summarized the challenge: “Without a framework or strategy, we
 will have no source of policy guidance, no meaningful way of reconciling energy and
 environmental issues ahead of us. Moreover, we will have no way of engaging provinces
 and territories meaningfully, no strategic mechanism for managing federal, provincial
 and territorial issues, and no concerted mechanism for informing Canadians about energy
 realities.”

 Evidence demonstrates that the public is ready for change and is worried about the health
 impacts of energy development and consumption. Many panelists pointed to the need for
 much more comprehensive information and education of consumers and citizens. They
 also called for a presentation of the range of available energy options as a package to
 enable the public to compare various combinations.

 Recent poll results presented by EKOS Research Associates at the conference underscore
 the importance of educating the public as well. The reality we face is a public that
 requires more information and needs more opportunities to become informed about
 energy.

 Next Steps

 Several participants noted that they would have benefited from a greater emphasis on the
 subject of energy efficiency.

 Participants and conference speakers alike called for high-level political commitment. A
 signal should be sent to policy makers that there is need for an honest dialogue, and that
 industry is eager for government to set appropriate regulation. Industry representatives
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expressed a desire to work with government to develop a clear energy policy. Many
participants felt that Minister Efford’s comments were a step in the right direction. He
stated that he, in cooperation with numerous other departments, was committed to
developing an action plan aimed at reducing demand, increasing supply, exploiting
cleaner energy sources as well as cleaner technologies for conventional energy sources.
Participants also called for more discussion between industry, environmental NGOs,
senior policy makers and their advisors to address energy issues and begin moving
forward.
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FUELING OUR FUTURE: STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA
CONFERENCE OUTCOMES REPORT

INTRODUCTION

On November 29 and 30, 2004, the Public Policy Forum held Fueling our Future:
Strategic Energy Policy Opportunities for Canada. This conference aimed to create a
better understanding of the issues and challenges facing the energy sector and promote
dialogue on a national approach. Participants included some 160 representatives from the
private sector, industry associations, and environmental groups as well as federal and
provincial governments.

Through this conference, the Public Policy Forum hopes to contribute to the development
of a sound, long-term strategy that promotes a sustainable approach to energy
development, smarter use of energy by consumers, and a strong future for energy
suppliers.

Some 28 prominent speakers addressed participants during the conference. They included
the Hon. John Efford, Minister of Natural Resources; the Hon. Dwight Duncan, Minister
of Energy, Ontario; the Hon. Joseph Handley, Premier, Government of the Northwest
Territories; Dr. Robert Skinner, Director, Oxford Institute of Energy Studies, U.K.; Mr.
Tim Hearn, CEO, Imperial Oil; Mr. Hal Kvisle, CEO, TransCanada; Mr. Patrick Daniel,
President & CEO, Enbridge; and Mr. Ken Ogilvie, Executive Director, Pollution Probe.
All speeches and presentations made at Fueling Our Future are available on-line, at
www.ppforum.ca.

This report describes the discussion at the conference. For more information about the
project and its findings, please visit www.ppforum.ca.


SUMMARY OF DISCUSSION

Pre-Conference Presentation – Survey Findings: Rethinking Energy and
Sustainable Development

Derek Jansen, Vice President, Syndicated Products and Special Studies, EKOS Research
Associates

The Conference opened with a presentation by Mr. Derek Jansen of the results of a
survey conducted by EKOS Research Associates. EKOS surveyed 1000 Canadians on
issues related to energy and sustainable development.

The survey revealed that, while environmental protection is a core value for Canadians,
their willingness to act upon it is less certain. Canadians prefer energy conservation over
expanded production and see protection of their environment as dominant over low prices
and uninterrupted supply of energy.
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There was little support for relaxing environmental standards even in the face of potential
energy shortages. Canadians feel that their environment has deteriorated, and expressed
support for tougher laws, even in cases where it would negatively affect some industries.

Canadians believe that the Government of Canada should take the lead in responding to
environmental challenges. However, they do accept that citizens have a certain degree of
personal responsibility as well. Very few
participants    felt    that     provincial
governments and the private sector are
responsible for ensuring environmental
sustainability.

Respondents expressed a clear preference
for regulation over voluntary action. They
were also clearly in favour of
implementing programs that encourage the
development and use of new and
alternative sources of energy. They are
optimistic about technology as part of the solution to environmental challenges, and they
welcome measures such as tax credits, marketing, and regulation that provide incentives
for technology development.

Survey information can be obtained by contacting Mr. Jansen directly at
djansen@ekos.com.

Participant Discussion

Many conference participants felt that the results of the survey demonstrated a
discrepancy between the ideals and the real-world behaviour of Canadians. Some argued
that the marketplace is a better indicator of people’s preferences, particularly in terms of
their willingness to pay for cleaner energy. It was suggested that the support of
respondents for technological solutions might be indicative of their perception of
technology as “a cheap solution”.

Many participants also felt that the survey results demonstrated a lack of understanding
and information about energy and environmental issues on the part of Canadians. Others
worried that the perceptions of Canadians pointed to the fact that measures taken to
improve environmental sustainability were not getting through to the public. Some
argued that more education / information about environmental realities should have been
built into the survey questions, while others argued that focus groups would be better
suited to education components.
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Conference Introductory Remarks

Hans R. Konow, President and Chief Executive Officer, Canadian Electricity Association

Hans Konow provided a brief introduction to the conference. He reminded participants
that in light of growing demand, rising prices of oil, and the increasingly pressing need to
replace historical energy infrastructure, no one energy source will act as a silver bullet.
Significant investment in clean technology will be needed to address increasing demand
for environmentally friendly energy, he said.

Konow also called for the development of an overall energy policy framework that would
lead to a reliable and sustainable energy supply.

Konow introduced the chair of the conference, Mr. Ken McCready.

Investing Today for Tomorrow’s Energy

Ken McCready, Policy Advisor, Energy Council of Canada and Former Chief Executive
Officer, TransAlta Utilities

                                               In his opening address, he argued that, first
                                               and foremost, supply was the overarching
                                               energy issue that would need to be addressed
                                               in decades to come. He strongly felt that all
                                               sources of energy would be needed to
                                               address this overarching issue—including
                                               traditional sources and new ones—and that
                                               technology held the key to the solution.
                                               According to McCready, new technology is
                                               key for greater recovery of conventional
                                               resources, the development of non-
                                               conventional resources, and increased
                                               sustainability in energy supply and use.

McCready explained that, although energy intensity is decreasing as a result of demand-
side management measures and technological development, demand will continue to
grow at a rate of 1.5 per cent a year. Capital requirements will be enormous, he said, and
we will not have the luxury of picking winners.

McCready also felt that the energy sector would greatly benefit from open markets with
stable rules, effective and efficient regulation that carries the confidence of stakeholders,
targeted research and development, skilled human resources, and an educated public.

McCready’s presentation notes            can     be    found     on    our    Website     at:
www.ppforum.ca/ow/fofagenda.
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Participant Discussion

Conference participants worried that the energy sector was not the only one requiring
investment, and that it would be difficult to secure enough capital. It was argued that
without an appropriate investment regime, prices would become even higher and that
environmental considerations would not be addressed.

Participants discussed clean coal as an energy option. Some argued that, given the United
States and China’s dependence on coal, it should be our most pressing priority to develop
clean coal technology. Others felt that recent decisions regarding coal-fired power plants
in the province of Ontario did not take into account the argument in favour of clean coal.

An International Perspective

Dr. Robert Skinner, Director, Oxford Institute of Energy Studies

Dr. Skinner addressed the audience about the international context for energy policy and
its strategic challenges by looking at the two structural themes of industry consolidation
and regulatory reform.

Skinner stated that oil and its pricing are central considerations. He spoke about what has
driven oil prices:

    1. demand growth, especially in light of the interplay between the economies of the
       United States and China;

    2. critical market and information references, focusing on IEA’s Oil Market Reports
       and OPEC’s quota announcements;

    3. decreasing spare capacity, coupled with events such as Russian threats against
       Yukos, strikes in the Norwegian oil sector, hurricanes in the Gulf of Mexico; and

    4. weak non-OPEC production outside the Former Soviet Union.

Skinner argued that, in the context of the
energy sector, the record of market reform
has not been stellar. “The overall effect of
incomplete reform, misapplication of the
OECD model to developing countries, and
poor follow-on macro-economic policies
has been increased uncertainty and risk,” he
said.

He then reviewed the main elements and
trends dominating global energy supply and
demand and the issues they present,
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focusing on issues confronting North America: up to 85 per cent of world energy
demand—the greater part of which will emerge from developing countries—will be met
by fossil fuels. This, along with projected growth in demand, will pose huge challenges
for reducing global greenhouse gases.

Skinner also pointed out that energy is not produced where it is consumed. More and
more production will come from areas perceived as unstable, and fuel must pass through
areas vulnerable to extreme weather, terrorism, and accidents.

In conclusion, Dr. Skinner emphasized the need to catch up on investment, the need for
access to resources and the need to develop and deploy new and cleaner technologies. He
argued that energy policy in the current decade must reconcile and deal with the major
legacies left by past policies.

Dr. Skinner’s presentation notes are available in Annex 5 of this report.

Participant Discussion

During a short question and answer session, conference participants discussed the role of
civil servants in informing politicians about the facts, in particular where climate change
and energy are concerned. However, it was noted that whereas “speaking truth to power”
is a challenge, making the public aware of the facts is an even more formidable
challenge.

Leaders Panel I: North American Energy Demand

Tim Hearn, Chief Executive Officer, Imperial

Mr. Hearn served as Chair for the first Leaders’ Panel, and provided an introductory
overview that addressed energy demand on a North American scale.

He argued that one cannot look into the North American energy market without taking its
context into consideration: global population, economic growth, and demand for energy
will all continue to increase in coming decades, especially in the developing world. Hearn
asserted that, by 2030, the world’s population is expected to grow to eight billion people
that global consumption of all forms of energy will grow by 50 per cent. North American
energy consumption will grow by 30 or 35 per cent over the same period. As previously
mentioned by Dr. Skinner, Hearn noted that fossil fuels, oil, natural gas and coal will
continue to be the predominant sources of fuel until 2030 and beyond. Renewables and
others will probably become increasingly significant, but fossil fuels have clear
advantages in terms of their availability, existing infrastructure, their relative security in
handling and efficiency.

Hearn maintained that, in terms of vehicular uses of energy, technological advances
could improve fuel economy by as much as 80 percent by 2030. Hearn felt that, given the
demand outlook, North America needs a two-pronged approach: first, we should
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encourage all varieties of production, second, recognize that, in North America, a great
deal of progress has already been made in improving efficiency. For instance, in
transportation, the efficiency of the auto engine has increased steadily. However, this has
not translated into vehicle efficiency because consumers have been opting for larger
vehicles. Industry has also improved its energy efficiency. Achieving further dramatic
reductions will be a challenge. We cannot conserve our way to a supply-demand balance.
Global demand growth will outweigh efficiency efforts. We must mount significant
efforts to address supply challenges.

Hearn argued that Canada’s energy resources must meet two tests: Canada must maintain
competitive costs with potential suppliers while meeting relevant environmental
standards, which will require large investments. Many of the new sources will be more
costly to develop. Their development will require long lead times, and should be enabled
by sound fiscal and regulatory environments.

Mr. Hearn introduced the panelists of the first Leaders’ Panel.

George Anderson, Deputy Minister, Natural Resources Canada

Mr. Anderson addressed the issues of energy efficiency and demand-side management.
He described four main reasons that Canada should carefully consider energy efficiency:

    1. There is evidence that many savings could be achieved by correcting current
       imperfections in the market.

    2. By consuming energy more efficiently, Canada would reduce our dependency on
       offshore resources, which speaks to the issue of the economy’s exposure to
       external factors.

    3. There will be less pressure to secure sources of supply.

    4. Energy efficiency could have a positive impact on our local and global
       environments.

Anderson asserted that government and industry alike are paying more attention to
energy efficiency due to the increasing price of oil and the growing security concerns
related to it. While Canada is not confronted with a large energy security problem, it is a
part of North America, and, as such, has certain obligations with regards to how it
manages its exports.

Val Mirosh, Vice-President, NOVA Chemicals

Mr. Val Mirosh provided an industry-user perspective on North American energy
demand. He said that energy, for the most part, had been taken for granted in Canada, and
that we need not rely solely on markets to guide energy policy.
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As a representative of the petrochemical industry, Mirosh explained that in order to
compete as a commodity producer in a global context, the chemical industry relies on
energy. Increases in the price—along with price volatility—of natural gas have posed
significant challenges for this industry.

                                            The ability of the Canadian petrochemical
                                            industry to gain access to oil and gas is key to
                                            meeting its objectives. In order to connect
                                            these reserves and develop environmentally
                                            sustainable means of bringing them into play,
                                            we must act quickly, said Mirosh. First, he
                                            argues, we need to encourage the
                                            development of new sources of hydrocarbon
                                            energy in Canada, in conjunction with other
                                            sources. Second, we should expedite the
                                            development of Arctic gas pipeline projects in
                                            Canada and Alaska, as well as in other parts
of the United States and Mexico. Third, we should develop a strategic program for the
conservation of natural gas and hydrocarbon resources–including through education of
the public and the industry. The availability of skilled workers may also become an issue
for the sector.

Mirosh concluded by stating that, in order for his proposed solutions to come to fruition,
Canada would require the definition and implementation of a clear and balanced energy
policy which would involve all stakeholders, including the public.

Mirosh’s  presentation   notes         can    be     found     on    our     Website      at:
www.ppforum.ca/ow/fofagenda.

David Manning, Senior Vice-President, KeySpan Energy

Manning began his presentation by describing the role of his company, KeySpan Energy,
in Canadian and American energy markets. He commented on continental integration and
energy demand in the United States. He argued that Canada and the United States have
physically and economically integrated energy systems and markets, characterized by
significant cross-border investment. Inconsistencies between American and Canadian
policy, regulatory processes, and fiscal regimes can disproportionately impact the North
American energy infrastructure.

Manning also spoke to conference participants about energy demand in the United States.
He argued that, in the near-term, US natural gas demand is relatively inelastic. Our
capability to consume gas, particularly for power generation, he said, has grown much
faster than North America’s supply capacity.

Manning also argued that, while new supplies such as liquefied natural gas (LNG) and
Arctic gas are viable, they continue to face significant obstacles. Therefore, efforts to
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further energy efficiency and introduce renewable technologies must be considered in
any credible discussion of new energy sources to meet demand.

Manning raised several policy concerns, including inconsistent regulatory processes and
fiscal regimes for infrastructure; and challenges posed by environmental policy, such as
the Kyoto Accord.

Manning’s presentation can be found on our Website at: www.ppforum.ca/ow/fofagenda.

Tom Marr-Laing, Policy Director, Pembina Institute for Appropriate Development

Marr-Laing spoke about consumers’ concerns with regards to energy in Canada. He
argued that consumers’ interests lie in the service of energy, not its source. Consumers
care little where their energy comes from. However, consumers are aware that, as energy
consumers, they are part of the problem, and they do want to be more responsible, said
Marr-Laing. However, the media bombards them with social issues including health care,
crime, and so on. Many feel they have little time to engage in a broader debate on energy
consumption and conservation.

Consumers, including in rural areas, worry about the increasingly intense impact of their
energy consumption habits. They are not prepared to bear the costs to their health,
livelihood and ecosystem. They are reluctant to rely solely on governments for
environmental protection, and are pressuring regulators to tighten legislation.

Marr-Laing asserted that our response to climate change, as separate from other
environmental issues, must be much more political, and will require a fundamental
restructuring of the way we produce and consume energy in all sectors.

However, Marr-Laing conceded that there is a “disconnect” between consumers’
concerns and their behaviour. The laissez-faire approach of relying on markets is an
irresponsible approach, according to Marr-Laing. Our response to environmental
concerns and climate change provides a key opportunity for leadership for those
governments and organizations that can capture the public’s imagination by proposing
concrete short and long term actions, including public dialogue, education, addressing
risks, and emphasizing opportunities.

Marr-Laing called for a constructive contribution to the implementation of the Kyoto
Protocol, while removing structural barriers. He suggested that we should focus strategic
investments in public infrastructure, and implement a strategy to deal with large emitters
at the federal level. Marr-Laing also commented that we should provide disincentives to
waste and internalize environmental impacts within energy prices.

Marr-Laing added that building trust between the various stakeholders working in the
energy sector is a considerable challenge, but that, in the long term, we have a vested
interest in the viability of our society, from the point of view of social cohesion,
economic well-being, and environmental sustainability.
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Marr-Laing’s presentation notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.

Participant Discussion

The first leaders’ panel was followed by a discussion period with conference participants.
Participants and panelists discussed the opportunities available to benefit from energy
efficiency, namely, an opportunity to engage the public in the discussion about energy
efficiency, and to accelerate the move to higher efficiency technology.

Participants and panelists also conversed about what an energy policy for Canada should
include. Some stated that its design should be guided by the following questions:

▪   What are the strategic issues for Canada in looking at its resources?
▪   How do you use that to get the best value?
▪   What are the opportunities for the development and use of technology?

Others argued that Canadian policy on energy should be collaborative and forward-
looking. Many said that public-private partnerships would be critical to its success.
Several participants called for a framework that does not pick winners, since all forms of
energy will be needed to fulfill our energy needs and remain competitive in our energy
exports.

Participants also briefly discussed the opportunity for creating real dialogue with
municipal governments around energy efficiency and urban policy issues, planning, and
transport.

Provincial and Territorial Perspectives on the Future of Energy

Marcel Côté, Senior Partner at Secor, served as Chair for this session, and introduced the
evening’s keynote speakers, the Honourable Joseph Handley, Premier of the Northwest
Territories, and the Honourable Dwight Duncan, Minister of Energy, Government of
Ontario.

The Honourable Joseph Handley, Premier, Northwest Territories

Premier Handley conveyed to Conference
participants the optimism he feels regarding
current energy projects such as the Mackenzie
Valley pipeline. He explained that initiatives such
as these are in the long-term, strategic interest of
local communities in the North as well as in the
rest of Canada. The Mackenzie pipeline could
potentially lead to unprecedented economic
growth for the region, Handley predicted.
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Meanwhile, the increase in natural gas supply would help lower the price of natural gas,
and lead to reductions in greenhouse gas emissions. Premier Handley pronounced himself
strongly in favour of proactive initiatives for responsible development and sustainability,
which will help protect Canada’s heritage in the North. He argued for an improved
regulatory mechanism that would be fair and productive. If done right, the Premier said,
the Mackenzie pipeline could mean independence, self-reliance, and real hope for the
North. He was also pleased that Aboriginal peoples have negotiated an agreement that
gives them equity in the project.

However, Premier Handley also noted that there remain challenges linked to the energy
projects in Canada’s North. For instance, a series of negotiations need to come to fruition
that would transfer the responsibility for projects such as the Mackenzie pipeline to
territorial governments, he argued. He felt that territories should be given control over
their own resources, and benefit from the revenues generated by them. This process of
agreement of devolution of powers has been negotiated for the last two decades, said
Handley.

Premier Handley concluded his allocution by stating that he felt confident that Prime
Minister Paul Martin understood the importance of the devolution of powers to the
territories. If done right, he said, Northern communities would feel their lives had
improved as a result of the development of the Mackenzie Valley pipeline.

The Honourable Dwight Duncan, Minister of Energy, Government of Ontario

The Honourable Dwight Duncan shared his thoughts about Canada’s energy future with
conference participants. He argued that Canada has arrived at a crucial crossroads when it
comes to energy issues, and that the choices we make today will have a tremendous
impact on our way of life, on our environment, our health, our economy, and our growth
as a nation, and this, for many decades to come.

Duncan emphasized the importance of Canada’s plentiful natural resources—including
renewables—but cautioned that these should not be taken for granted. He asserted that we
should seize this opportunity to work together as a nation to fuel our energy future, to
enhance our national energy security, and to become more self-sufficient while sharing
our resources and helping each other meet our respective supply challenges.

                                          Minister Duncan asked the audience why,
                                          given our considerable resources, Canada was
                                          not producing excess electricity capacity, but
                                          instead, facing significant supply challenges. He
                                          argued that, in most cases, the answer lies in
                                          the cost of transmission. However, he also
                                          argued that yet another part of the answer lies
                                          in the fact that Canada has never pursued a
                                          coordinated national electricity strategy. Such
                                          as strategy, according to Duncan, would help
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Canada move away from a reliance on hydrocarbons, and would put in place sustainable
and lasting solutions that would benefit Canadians for future generations to come.

Further, a national approach to electricity issues would enhance our energy security, help
clean up our environment, stimulate economic development in the Canadian North, and
provide a renewable, reliable and affordable supply of electricity for future generations of
Canadians, said Duncan.

Minister Duncan also addressed the issue of our ties with the United States, their
advantages and implications for our energy structures and environment. He stated that he
could conceive of a model whereby our electricity grid would run East to West, allowing
provinces to share more clean and affordable energy with each other; increasing energy
security and self-sufficiency; and reducing our dependence on fossil fuels. Minister
Duncan pointed out that Ontario had already taken steps toward greater ties with its
neighbouring provinces.

Minister Duncan’s presentation        notes    can   be   found    on   our   Website     at:
www.ppforum.ca/ow/fofagenda.

Breakfast Presentation: Vision and Strategy for Green Power in Canada

Ken Ogilvie, Executive Director, Pollution Probe

Pollution Probe is a non-profit, charitable organization that was founded in 1969 at the
University of Toronto. Its mandate is environmental policy development, and its work is
based on research and partnerships.

Ogilvie spoke to participants about the benefits of green power generated by wind, small
hydro, biomass, geothermal, solar, wave and tidal technology, including:

•   air pollution reduction and climate change mitigation;
•   job creation and rural development;
•   price hedging;
•   electric power grid stability and energy security;
•   clean energy and technology exports; and
•   clean development mechanism projects.

According to Ogilvie, green power technologies will have a potential capacity of 41,400
MW by 2025, equivalent to 150 TWh in electricity generation.

Ogilvie described Pollution Probe’s green power vision and strategy for Canada. He
argued that sustainable electricity future priorities should include energy efficiency and
conservation; providing green power that meets the criteria for EcoLogoM certification;
ecologically sustainable larger-scale hydro and other renewables; combined heat and
power using natural gas; and the cleanest and safest technologies among the remaining
options.
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Ogilvie enumerated several priorities for action. First, level the playing field through
measures such as a Green Power Production Incentive and a Renewable Energy
Certificate System. Second, support innovative technologies. This can be achieved by
developing a comprehensive strategy for research, development, demonstration and
commercialization, or through the creation of centres of excellence and technology road
maps. Third, engage Canadians at the community level and through initiatives such as the
Market Incentive Program and a comprehensive public education and outreach strategy.

Additional actions, said Ogilvie, could include mapping green power resources,
streamlining zoning, planning and permit requirements, preparing the labour force and
setting up green power coordinating bodies.

Ogilvie’s presentation can be found on our Website at: www.ppforum.ca/ow/fofagenda.

Participant Discussion

A participant wondered whether there were data on the potential costs associated to green
power sources. While there are costs involved in bringing these sources online, it was
argued that subsidization should be provided long enough to further develop the green
power market.


Second Day


Leaders’ Panel II: New Sources of Energy Supply and Sustainability

The second leaders’ panel addressed the subject of new sources of energy and its
sustainability. Hal Kvisle provided an overview of the topic, and introduced panellists.

Hal Kvisle, President and Chief Executive Officer, Trans-Canada

Kvisle served as Chair for this panel and introduced the session by identifying several
key public policy issues relevant to energy supply and sustainability, including:

 ▪    bringing new supply to market;

 ▪    assessing the need for new infrastructure;

 ▪    establishing and enhancing workable regulatory processes;

 ▪    implementing demand-side management measures—specifically, what should be the
      role for policies and market forces;
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▪   ensuring that there is alignment between North American, Canadian, and provincial
    energy policies; and

▪   taking into consideration North American financial and market realities—
    specifically, what does it take to increase the level of investment?

Kvisle argued that there exist many opportunities for Canada in the energy sector,
namely, that Ontario, British Columbia and Alberta have the potential to become net
power exporters. Further, Atlantic Canada and Quebec could become LNG import and
processing centres. Canada also has the potential to take leadership on CO2 through
energy efficiency measures and technology substitution.

Kvisle also spoke about the development of the Alaska Pipeline project, stating that the
Canadian regulatory structure is already in place in the form of a Canada-US Agreement
and the Northern Pipeline Act (NPA).

John D. Keating, Chief Executive Officer, Canadian Hydro

John Keating’s presentation highlighted the
development of renewable energy sources—
namely wind, biomass, and hydroelectricity.
He called for a balanced approach to green
power development. Keating argued that
there are potential financial benefits to be
reaped from the development of renewable
energy sources.

Keating also described the involvement of
Canadian Hydro in the Clean Air Renewable
Energy Coalition (CARE), a group of
corporate, environmental non-governmental
organizations (ENGOs) and municipal
governments. It was launched to accelerate
the development of Canada’s renewable energy industry. Keating argued that, in order
for CARE to meet its goals, it will need a national renewable energy strategy to address
low-impact renewable energy and green power. He insisted that this strategy not pick
winners, but provide a level-playing field to all forms of “green” energy.

Keating foresees that a green power strategy would greatly benefit Canadian society and
the environment. He argues that the public is demanding cleaner, more sustainable
power, with stable pricing, and that its realization will occur only within the context of a
national renewable energy strategy.

Keating’s speaking notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.
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Steve Williams, Executive Vice President, Suncor Energy

Williams addressed the issue of supply and sustainability from the perspective of his
company, Suncor Energy, whose main business is the development of the Oil Sands. He
forecasted that by 2015, due to significant increases in the demand for oil, wide gaps
would begin to appear between supply and demand. This will provide a great opportunity
for the Oil Sands—and for Canada.

One of the most important challenges related to bringing the Oil Sands into production in
a timely fashion will be capital, Williams argued. In order to meet the significant costs
associated with the development of this resource and attract the necessary capital, the
industry will require the right regulatory and fiscal conditions. The need for highly
skilled trades, in remote areas, will also pose a significant labour challenge in the
development of the Oil Sands.

Williams asserted that, while the Oil Sands are not benign in their environmental impact,
the industry has been investing in technology that has helped reduce greenhouse gas
emissions over the last 10 years. A roadmap around technology is needed to help the
industry make further strides in this direction.

According to Williams, the main issue in meeting our future demand is not supply: he
would like to see the issues that constrain the development of the Oil Sands addressed
through partnership and collaboration; farsighted policy planning; and the involvement of
all relevant stakeholders, including all levels of government, pipelines, producers, and
technical and environmental experts.

Williams’ presentation notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.

Gerry Protti, Executive Vice President, Corporate Relations, EnCana Corporation

The presentation made by Gerry Protti addressed new sources of natural gas in North
America. Protti strongly believes that in the future, our natural gas supply will be the
overarching issue to meet demand and remain competitive in international markets, that
technology is the key, and that all energy sources will be needed to satisfy future demand
and remain competitive in the world energy market—including liquefied natural gas,
coal-bed methane, and tight gas.

Protti also spoke about unconventional sources and the role they will play in the future, in
particular from the perspective of his organization, EnCana. According to him, the most
important policy issue related to the development of new sources of natural gas is
infrastructure. He believes that it will be the key to achieving a balance between the
needs of the market and the concerns of local communities, which will pose significant
challenges for regulators.

Protti’s presentation notes can be found in two parts on our Website at:
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www.ppforum.ca/ow/fofagenda.

Murray Elston, President and Chief Executive Officer, Canadian Nuclear Association

Elston’s presentation dealt with the role of nuclear energy in Canada’s energy future. He
affirmed that electricity consumption is increasing in Canada, which means that, in order
for supply to meet demand, capital will be needed. Elston argued that nuclear energy was
a potential part of the solution. Canada should find the correct way of making use of all
of its resources, Elston argued.

His presentation also provided an overview of the status of Canada’s nuclear industry,
focusing on Ontario. For the last six decades, nuclear energy has been one of Canada’s
sources of energy. In Ontario, 15 reactors are currently in service, providing over 45% of
the province’s electricity. He expressed concern that renewable sources alone would be
insufficient to satisfy the demand, and that if nuclear infrastructure was not refurbished,
Ontario’s electricity production would decline significantly. Moreover, even with
refurbishments, the current infrastructure may not be able to meet supply in light of the
coal phase-out planned in Ontario.

Elston argued that one of the most important issues in bringing all sources of energy
online lies in an effective and efficient regulatory environment.

About the environmental performance of the nuclear sector, Elston stated that it should
be considered as an EcoLogoM source of energy. Nuclear power results in lower carbon
emissions, said Elston. However, two issues remain: nuclear waste and nuclear safety.
The nuclear industry is rated as the safest there is, Elston asserted, because the equipment
involved is so difficult to operate, and requires extensive security systems and training.

Elston’s presentation notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.

Thierry Vandal, President, Hydro-Québec Production

Vandal’s presentation was centered on the potential for hydroelectricity and wind power
generation.

Vandal explained that hydroelectricity producers, large and small, have been producing
environmentally sustainable energy for many decades. There is a fantastic opportunity
around energy—but also around renewable energy—in Canada, both for domestic
markets and export markets to the south. Many producers are participating in this
opportunity, Vandal asserted.

Vandal went on to describe Hydro-Québec’s latest projects in renewable energy: a new
phase of large hydro development in Quebec, and wind power generation as natural
complement to large hydro. According to Vandal, this investment in new renewable
sources over the next 10 years will be profitable, is environmentally sound, and will be
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done in partnership with First Nations and other local communities. He was particularly
optimistic about the use of traditional knowledge, common sense and wisdom when
considering environmental issues related to hydroelectricity generation. One of Hydro
Québec’s priorities is working with governments to improve and better coordinate the
environmental review process, said Vandal.

Vandal highlighted that while the technology in wind power has evolved, challenges
remain, such as developing interconnection standards, establishing transmission services,
balancing and scheduling, and delivery issues. These challenges are being addressed in a
number of fora, including within industry, in a way that maintains the reliability and
integrity of the grid while also capturing the benefits of renewable wind generation.

In conclusion, Vandal emphasized that as a generator with a long-standing presence in
markets in Québec, Hydro Québec was not satisfied with the current situation and wanted
to accelerate construction schedules to ensure energy security. Market efficiency is also
critical, he felt. Vandal noted that we should ensure that we are using existing
infrastructure as efficiently as possible.

Canada’s Energy Future

The Honourable R. John Efford, Minister of Natural Resources, Government of Canada

Minister Efford recognized that Canada’s energy context is changing rapidly, especially
in terms of prices. Factors such as tight markets and world events, explained Efford, have
led to speculation and price increases. Another element of the changing energy context is
the increased focus on the environment and sustainable development, said Efford.

                                                   Efford provided participants with an
                                                   overview of a four-pillared approach
                                                   to policy that builds on Canada’s
                                                   abundance of energy sources: First,
                                                   the policy is market-oriented,
                                                   allowing innovation and investment
                                                   to lead to global success. Minister
                                                   Efford argued that while government
                                                   has a role in such a market, that role
                                                   does not include direct control over
                                                   prices or supply. Second, the policy
                                                   should respect provincial jurisdiction
over the energy resources they own. The third pillar, Efford explained, entails the role of
government in correcting for the market’s inefficiencies through smart regulation.
Finally, the policy must include focused interventions by government in areas such as
research and development in science and technology.

Efford asserted that developing energy resources in a sustainable way was paramount to
ensuring security and prosperity. He committed to a four-pronged approach. First, he will
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ensure that the energy we use has less impact on the environment, by shifting to cleaner
energy. Second, he will reduce energy use by promoting energy efficiency. Third, he will
increase overall supply and reliability, including by improving the investment climate.
Finally, Efford’s strategy will enable the development of appropriate technologies, which
will help make the three previous steps possible.

For a copy of Minister Efford’s speech, please see Annex 6.

Leaders’ Panel III: Developing the Conditions for Success and the Role of
Innovation

The third leaders’ panel highlighted the development of the conditions for success and
the role innovation will play in our energy future. The Chair for this panel, Patrick
Daniel, provided an overview of the topic, and introduced panellists.

Patrick Daniel, President and Chief Executive Officer, Enbridge Inc.

Daniel stated that the objective of this panel consisted in laying out the challenges in
meeting supply and to suggest some solutions. He alluded to the fact that the approval
process to which his company, Enbridge, has had to submit seems to become increasingly
burdensome every year.

Daniel argued that the contribution of the energy sector to the Canadian economy has
been very significant. At Canada’s latitude, the use of energy is not an option, it is
mandatory, and the need and demand for energy grows every day. Therefore, said Daniel,
we need to bring new supply on-stream more quickly than we have in the past. However,
it is probable that new supply will cost more to bring to market, namely due to the remote
location of new sources. Daniel identified three major road blocks in the development of
new, unconventional sources:

   1. There is a tendency for governments to think that they are in a position to choose
      winners, as opposed to letting markets identify them. This type of government
      intervention often has a negative impact on the industry. However, there are
      examples of government interventions that have positive impacts, such as the Oil
      Sands in Alberta. The type of intervention needed is a broad energy strategy that
      projects many decades ahead, informed by a policy framework.

   2. The regulatory process should provide economic rewards for those investing in
      the industry and in infrastructure. This regulatory framework should be
      characterized by better cross-border collaboration, since regional self-interest
      often becomes a challenge, argued Daniel.

   3. The Canadian public holds some misperceptions about the energy industry.
      Consumers tend to take for granted the safe and secure delivery of energy. They
      often oppose new energy delivery projects, even though these are badly needed in
      order to meet demand.
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Daniel concluded his presentation by calling for three key action items:

    ▪   utilities and the end consumer need to be able to contract for upstream supply;

    ▪   all relevant stakeholders need to play a part in emphasizing the importance of the
        energy industry to the Canadian economy; and

    ▪   there is a need to initiate dialogue about a broader national energy strategy or
        policy.

Daniel argued in favour of a national energy strategy in Canada. He highlighted the need
for an umbrella approach encompassing all issues addressed in the conference if we hope
to avoid looming supply shortfalls while addressing environmental issues.

For Daniel’s presentation notes, please visit our Website at:
www.ppforum.ca/ow/fofagenda.

Gaëtan Lussier, Chair, External Advisory Committee on Smart Regulation

The first panelist, Gaëtan Lussier, spoke about the regulatory framework. He argued that
current regulation regarding the energy sector does not respond in a timely fashion to
changes such as science and technology advances, new business practices, and changing
consumer needs. He also worried that the regulatory actions of federal departments and
of federal, provincial and territorial governments are not aligned to governmental policies
and national priorities in a coherent and integrated fashion. Lussier noted that there are
many small differences between Canada and its trading partners that could be streamlined
without affecting the purpose of those differences.

Lussier defined smart regulation as:

▪   Protecting and enabling:
    - generating social and environmental benefits while enhancing the conditions for
       an innovative economy;
    - maximizing effectiveness while minimizing costs and complexity.
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▪   More responsive:
    - self-renewing system which anticipates developments;
    - acting quickly and deliberately to address risks;
    - increasing flexibility in implementation while meeting targets.

▪   Governing cooperatively:
    - sharing regulatory responsibility among governments, citizens and industry to
       increase effectiveness;
    - being attentive and balancing different needs in a complex global system.

Lussier expressed concern that our current regulatory regime is still highly restrictive and
lacks flexibility, which is so essential to firms, especially SMEs. Throughout
consultations conducted by the External Advisory Committee on Smart Regulation
(EACSR), (chaired by Lussier), stakeholders called for faster approval, and the use of
regulatory instruments that can provide more flexibility. Consultation participants
expressed concerns about the capacity of our current regulatory framework to manage
change in the face of change.

Lussier also asserted that industry is open to working differently with the federal
government and with other sectors. In preparing its report, tabled in September 2004, the
EACSR focused its attention on new strategic directions: international coordination, risk
management, federal-provincial coordination, and regulators’ capacity to adapt to a
changing environment.

In conclusion, Lussier spelled out the first to implementing a Smart Regulation strategy:

▪   developing a new regulatory policy for the 21st century;
▪   committing to make all new regulation “smart”;
▪   developing multi-stakeholder “swat teams”;
▪   federal-provincial-territorial cooperation—a national environmental assessment
    approach;
▪   removing regulatory gaps in First Nations communities; and
▪   establishing a recourse mechanism.

Lussier’s presentation notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.

Patricia McCunn-Miller, Vice-Chair, and Co-Chair of the Energy and Climate Change
Initiative, National Roundtable on the Environment and the Economy

Patricia McCunn-Miller addressed conference participants about developing the
conditions for success and the role of innovation in the energy-environment equation.
The National Roundtable on the Environment and the Economy (NRTEE) feels that there
is a need to move away from the traditional segmented approach to energy and climate
change, towards an integrated strategy predicated on Canadian competitiveness and
sustainability. NRTEE has also found that stakeholders are willing to collaborate in
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charting a sustainable energy future.

At the heart of this search for an
energy strategy that reconciles
climate change and a competitive
energy       future    is    Canadian
competitiveness, said McCunn-
Miller. She provided an overview of
current challenges. By 2025, global
energy consumption is projected to
increase by 58%, with most of the
demand being driven by the
developing world and significant
increases in population. In the long
term, energy demand will rise—both
continentally and on an international scale. Growing energy demand and declining supply
will result in higher, more volatile energy prices.

In addressing this new reality, governments will need to take into consideration a number
of challenges, including the security of supply and the availability of local resources; the
shifting mix of Canada’s energy portfolio; the role of renewables (excluding hydro);
adequate infrastructure for delivering energy to markets, including pipelines, and
transmission lines, as well as regulation and how it impacts on investment decisions;
price volatility and its impact; the implications of unabated growth in demand energy
development and efficiency; the role of demand-side management in meeting significant
greenhouse gas reduction goals; the potential impacts of growing demand in Asia on
Canada’s energy development; Oil Sands development technology; increasing carbon
constraint arising from Kyoto and other government constraints; the implications of long-
life asset decisions that are being made in terms of our power generation and
infrastructure, specifically, defining the role of nuclear power and clean coal;
implementing smart regulation across jurisdictions; and the development and
implementation of motive fuels for cars, buses, trains and planes.

Cross-cutting all of these challenges, stated McCunn-Miller, are the environmental
implications of all our energy system choices.

McCunn-Miller elaborated on what she perceives as a critical and distinct role for
government: enabling a sustainable energy future, a strategy and clear policy signals to
facilitate effective and strategic decision-making. This strategy should articulate
Canada’s energy and climate change priorities over the next three decades and go beyond
the Kyoto commitment period, she said. Moreover, McCunn-Miller argued that
governments need to focus their attention on an integrated approach to technology and
innovation.

McCunn-Miller concluded that, as a significant global energy player, Canada is past due
in making explicit its energy and climate change strategy. This will mean unprecedented
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level of coordination and cooperation in Canada, which will require creativity on the part
of all energy stakeholders.

McCunn-Miller’s presentation        notes    can    be   found    on    our   Website     at:
www.ppforum.ca/ow/fofagenda.

Blaine Favel

Blaine Favel presented on Aboriginal involvement in energy development. He
highlighted the fact that energy development (whether it be hydro, Northern gas, or the
Oil Sands), is of specific interest to First Nations Peoples. Favel was optimistic that their
voice is increasingly being heard.

Favel explained that First Nations People’s positions have often been misconstrued as
anti-development. First Nations want to be meaningful participants in their own
development. They want to reap the rewards of employment, participate in business
opportunities, and they want to have a say in how their environment will be treated. Favel
cited specific examples of negotiations that had yielded very positive results in these
terms.

Favel argued that the largest barrier to agreement on energy development in Canada was
not the “bad intentions” of the companies. Industry understands that from an economic
perspective, First Nations people must be involved in their own development. The most
considerable challenge, according to Favel, is that federal departments have not engaged
First Nations from a regulatory and business development perspective. It is their
obligation to consult with First Nations people in their own development, said Favel.

In conclusion, Favel asserted that he saw energy as a learning opportunity for all
stakeholders involved. He was hopeful that, with a bit of patience, a process that takes
into consideration the desire of First Nations people to be meaningfully involved in the
development of our energy resources could result in positive results for all.

Vicky J. Sharpe, President and Chief Executive Officer, Sustainable Development
Technology Canada

Sustainable Development Technology Canada (SDTC) is a not-for-profit organization
created in 2001 to create opportunities for improving efficiency through innovation in
Canada. Its mandate began with climate change and clean air, and was supplemented by
including clean water and clean soil. STDC works primarily in the pre-commercialization
phase. It fills a gap in the innovation chain, by providing funding and resources.

Vicky Sharpe believes that SDTC has the potential to contribute greatly to meeting
Canada’s climate change objectives.

According to Sharpe, Canada needs federal and provincial strategies to set a framework
for decision-makers, and a national energy policy. That kind of guidance is absolutely
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critical, she said.

Sharpe stated that Canada is rich in natural resources and has the capacity to be a leader
in this area. Sharpe argued in favour of regulation that would serve to remove some of the
inefficiencies of the market around energy utilization and incentives.

Sharpe’s presentation notes can be found on our Website at:
www.ppforum.ca/ow/fofagenda.

Concluding Plenary: Strategic Energy Policy Opportunities for Canada

The final plenary of the conference was designed to provide a summary of discussions
and to highlight key issues, priorities, and to propose next steps. Gerry Protti chaired this
panel of experts, composed of Mark Jaccard, Ken Ogilvie and Michael Cleland.

Mark Jaccard, Professor, School of Resource and Environmental Management, Simon
Fraser University

Dr. Jaccard outlined his definition of a sustainable energy strategy: a strategy that
                                            satisfies energy service needs indefinitely
                                            with negligible environmental impacts
                                            and only acceptable risks. He stated that
                                            he had been impressed by conference
                                            participants’ willingness to keep an open
                                            mind about options other than their own.

                                                Jaccard’s position on efficiency is that we
                                                will make great gains, but that its
                                                contribution within the energy system as a
                                                whole will still require a dramatic
                                                expansion of supply in order to meet
                                                demand and remain competitive as an
                                                exporter.

We have to remember the externality damages of non-green technologies, said Jaccard,
and not only think in terms of the business case for a given energy source.

Jaccard outlined three different kinds of policies that could help bring renewables to
market:

1. Stage-setting policies: direct government action through information programs and
modest subsidies to consumers;

2. Consolidation policies: efficiency and emission regulations for laggards; progressive
environmental fiscal reform (EFR); progressive emission cap and trade with a safety
valve; and,
                                                                    FUELING OUR FUTURE:       23
PUBLIC POLICY FORUM                    STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA



3. Policies to drive profound technological change: subsidies to R&D and new
technologies; regulated niche markets such as vehicle emission standards; renewable
portfolio standards and carbon capture and storage standards.

Jaccard explored the idea of using niche market regulation and setting timeframe targets.
Jaccard also had some suggestions for industry, especially for the fossil fuel industry:

a) Present a radical vision for a zero-emission energy future through extensive public
education backed by strong policy proposals.

b) Lobby government for policies that motivate profound technological change; do not
wreak short-run economic havoc; and create a level playing field—by combining carbon
capture and storage standard with an emissions cap, and tradable permit with a modest
but climbing price cap.

Jaccard’s presentation can be found on our Website at: www.ppforum.ca/ow/fofagenda.

Ken Ogilvie, Executive Director, Pollution Probe

Ogilvie’s first observation was that Canada is very fortunate to have such an abundance
of opportunity and technological capacity. We may have underplayed some of our energy
options, he said. These opportunities simply need a bit of a boost, and will not have a
negative impact our industrial competitiveness, he continued.

According to Ogilvie, the public is ready for change: Canadian citizens are worried about
their health and could be convinced that there are benefits to clean energy. They are
willing to pay higher prices in the sense that they can internalize the cost of cleaning up
their vehicles and the technology they use. More analysis should be conducted about just
how much they are willing to pay, who pays, and what are the consequences, said
Ogilvie.

Politicians need a comprehensive, clear energy policy, and there is an appetite for a
greater variety of energy sources. Ogilvie also noted a real receptivity to the advantages
of broadening our energy mix. He argued that there are markets for all of our energy
sources. He expressed disappointment that the conference did not place more emphasis
on energy efficiency, and saw a wide gap between what stakeholders have the capacity to
do in this area and what we have been doing.

Michael Cleland, President, Canadian Gas Association

Cleland re-stated that what is needed is an energy framework or strategy in Canada. He
felt that Minister Efford’s commitment was a step in the right direction—because it
respected provincial jurisdiction, understood the role of markets, and acknowledged that
conventional fuels have an important role.
24 FUELING OUR FUTURE:
    STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA                   PUBLIC POLICY FORUM

Canada has one of the most energy-intensive economies in the world, said Cleland. We
are the largest producer of energy per unit of GDP among OECD countries. Energy is the
single largest source of Canada’s trade surplus, the single largest destination for capital
investment in Canada, and one of the three or four most critical elements in our relations
with the United States. However, energy is also one of most complex jurisdictional issues
and the most strategic environmental concern faced by Canada.

Despite these facts, Cleland explained, we have no official and coherently expressed
view of energy. Historically, we have succeeded despite our lack of strategy. However,
circumstances have changed: stresses on
energy systems have grown and are growing.
Cleland argued that without a framework or
strategy, we have no source of policy
guidance, we have no meaningful way of
reconciling the energy and environment
issues ahead of us. We have no way of
engaging       provinces    and    territories
meaningfully. We have no strategic
mechanism for managing federal-provincial
or territorial issues. We have no concerted mechanism for informing Canadians about
energy realities. The reality we face is of a public that needs more information and
opportunities to become informed.

Cleland outlined several aspects of Canada’s overarching opportunity to ensure that
energy contributes to building a stronger economy:

•   An affirmation of the basic principles and policies that have underpinned our success
    over the past 20 years. These principles include the primary role of markets, open
    borders for flows of energy and investment, and mutual respect for the jurisdictional
    responsibilities of all levels of government.

•   Realistic views about the cost of energy.

•   Continuing to build on our strengths while bringing on new technology, ensuring that
    our resources compete against world supplies and continue to generate opportunities
    for Canadians.

•   Using our energy resource base as a stronger foundation for remote northern
    communities, in particular Aboriginal communities. Energy is a fundamental pillar to
    their success.

•   A real commitment to tackling environmental challenges.

•   Reinforcing the Canada-US relationship while getting better leverage on energy-
    related environments issues of importance to Canada, such as air quality and climate
    change.
                                                                    FUELING OUR FUTURE:       25
PUBLIC POLICY FORUM                    STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA



•   Turning energy into a model of best practice—in the way we manage our
    international energy relationships; in smarter environmental regulation; and in the
    management of our inter-jurisdictional relationships.

Participant Discussion

Participants noted that one of the themes that ran through each presentation was the need
to engage policy makers. One participant expressed the need to engender a policy debate.
Another participant stated that the energy sector needs a leader to call for an honest
dialogue.

There was some discussion about whether it might be best to opt for 13 strong provincial
and territorial energy policies rather than a federal one. Participants agree that Canada
needs to cooperate. Protti concluded the session by encouraging participants to take the
next steps forward.

Conclusions

Ken McCready noted that there seemed to be clear consensus that energy stakeholders
need to improve energy efficiency in every way possible while addressing supply
challenges; consider all available energy sources; and address environmental questions in
a serious way. Technology holds the key to many of these pieces, he said.

Our country’s economic future is closely linked to its energy future. Stresses on energy
systems have grown and are growing. McCready summarized the discussion as follows:

    •   Energy supply will be the overarching challenge.

    •   All sources of energy, traditional and unconventional, will be needed in order to
        address our needs for energy and export competitiveness in the future.

    •   Traditional sources will continue to be key. However, we will also need to
        develop new sources of conventional energy while developing unconventional
        sources, including renewables.

    •   R&D and investments in technological advancement hold the key to the
        development and competitiveness of new conventional sources and
        unconventional ones.

McCready also observed that there was a strong endorsement for Minister Efford’s four
key pillars: open markets, smart regulation, a clear articulation of an energy strategy for
this country, brought about through a collaborative process.

Jodi White, President of the Public Policy Forum, thanked participants for attending and
expressed her gratitude to McCready for chairing the conference.
26 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA   PUBLIC POLICY FORUM
                                                                 FUELING OUR FUTURE:   27
PUBLIC POLICY FORUM                 STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

ANNEX 1 – AGENDA

PPF Energy Conference
Fueling our Future: Strategic Energy Policy Opportunities for Canada

November 29 and 30, 2004
Delta Hotel and Suites, Ottawa, Ontario

Conference Sponsors:

Prime Sponsors: Environment Canada; Natural Resources Canada

Major Sponsors: Canadian Energy Pipeline Association; Department of Energy,
Government of Alberta; Western Economic Diversification Canada; EnCana; Suncor;
Industry Canada; Bruce Power; Canadian Gas Association

Sponsors: Canadian Electricity Association; Canada’s Chemical Producers Association;
Imperial Oil; Ontario Ministry of Energy; Canadian Nuclear Association; Canadian
Electricity Association; IPSCO; Dow Chemical

                                     AGENDA

Monday, November 29, 2004

10:30 a.m.     PRESENTATION OF SURVEY FINDINGS
               Rethinking Energy and Sustainable Development
               Derek Jansen, Vice-President, EKOS Research Associates

11:30 a.m.     RECEPTION

12:00 p.m.     LUNCH: INTRODUCTION & WELCOME ADDRESS

               Sponsored by: Canadian Electricity Association

               WELCOME
               Jodi White, President, Public Policy Forum

               INTRODUCTORY REMARKS
               Hans R. Konow, President & Chief Executive Officer, Canadian
               Electricity Association

               OPENING ADDRESS: “Investing Today for Tomorrow’s Energy”

               Conference chair: Ken McCready, Policy Advisor, Energy Council of
               Canada & former Chief Executive Officer, TransAlta Utilities
28 FUELING OUR FUTURE:
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2:00 p.m. PLENARY: KEYNOTE ADDRESS: AN INTERNATIONAL
                   PERSPECTIVE

            The keynote speech will outline the issues relating to the state of energy in
            the world and provide a backdrop for the discussions that will take place over
            the next day and a half.

            Robert Skinner, Director, Oxford Institute of Energy Studies

3:30 p.m. LEADERS PANEL I: NORTH AMERICAN ENERGY DEMAND
          Overview presentation: Canada’s Energy Perspective

            Defined the current demand situation and future energy scenarios of the
            evolution of energy demands.

            Tim Hearn, Chief Executive Officer, Imperial Oil

            Panellists spoke on:

            !   Energy efficiency and demand-side management: George Anderson,
                Deputy Minister, Natural Resources Canada
            !   Industrial user perspective: Val Mirosh, Vice-President, NOVA
                Chemicals
            !   Continental integration and energy demand in the United States: David
                Manning Sr. Vice-President, KeySpan Energy
            !   Consumers’ concerns: Tom Marr-Laing, Policy Director, Pembina
                Institute for Appropriate Development

6:00 p.m. RECEPTION
          Sponsored by: Bruce Power

6:45 p.m. DINNER
          Sponsored by: Bruce Power

            Dinner Chair: Marcel Côté, President, Secor Conseil and
            Chair of the PPF Board

            KEYNOTE ADDRESSES:
            PROVINCIAL/TERRITORIALPERSPECTIVES ON THE FUTURE OF
            ENERGY

            These keynote speeches addressed the challenges and opportunities that the
            Northwest Territories and Alberta governments face in the management of
            the energy market in these provinces/territories.
                                                                 FUELING OUR FUTURE:    29
PUBLIC POLICY FORUM                 STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

           The Honourable Joseph Handley, Premier, Government of the Northwest
           Territories

           The Honourable Dwight Duncan, Minister of Energy, Government of Ontario

           Questions &Answers and Chair’s Wrap-up

9:00 p.m. ADJOURN


Tuesday, November 30, 2004

7:30 a.m. CONTINENTAL BREAKFAST
          Sponsored by: Canadian Nuclear Association and
          Ontario Ministry of Energy

           Vision and Strategy for Green Power in Canada:
           Ken Ogilvie, Executive Director, Climate Change Program, Pollution Probe

8:30 a.m. Conference Chair: Introduction to the second day

8:40 a.m. LEADERS PANEL II: NEW SOURCES OF ENERGY SUPPLY AND
                            SUSTAINABILITY

           Overview Presentation:
           Harold Kvisle, President & Chief Executive Officer, Trans-Canada Pipelines

           Panellists spoke on:
           ! Exploiting the oil sands: Steve Williams, Executive Vice President,
               Suncor Energy
           ! New sources of natural gas: Gerry Protti, Executive Vice President,
               Corporate Relations, EnCana Corporation
           ! The role of nuclear energy: Duncan Hawthorne, President & Chief
               Executive Officer, Bruce Power
           ! Developing renewable sources – wind, biomass, hydroelectricity: John
               D. Keating, Chief Executive Officer, Canadian Hydro
           ! Hydro-electricity and the North American market: Thierry Vandal,
               President, Hydro-Québec Production

10:45 a.m. LEADERS PANEL III: DEVELOPING THE CONDITIONS FOR
                              SUCCESS AND THE ROLE OF INNOVATION

           Overview presentation by Patrick Daniel, President & Chief Executive
           Officer, Enbridge Inc.
30 FUELING OUR FUTURE:
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            The imperative for new energy infrastructure required for continental energy
            security, as well as the need for competitive fiscal regimes and regulatory
            predictability.

            The conditions for success: How can we ensure development of new supply,
            taking into account:

            !   the regulatory framework: Gaetan Lussier, Chair, External Advisory
                Committee on Smart Regulation
            !   the Energy-Environmental equation: Patricia McCunn-Miller, Vice-Chair
                & Co-Chair of the Energy and Climate Change Initiative, National
                Round Table on the Environment and the Economy
            !   Aboriginal involvement in energy development: Blaine Favel
            !   Supporting innovation and technology development: Vicky J. Sharpe,
                President & Chief Executive Officer, Sustainable Development
                Technology Canada

12:30 p.m. LUNCH
           Sponsored by: IPSCO

            KEYNOTE ADDRESS: CANADA’S ENERGY FUTURE

            The keynote speech addressed the challenges and opportunities that Canada
            faces in the management of the energy market.

            Introduction:
            Ken McCready, Policy Advisor, Energy Council of Canada

            Speaker:
            The Honourable Ruben John Efford, Minister of Natural Resources,
            Government of Canada


2:00 p.m. CONCLUDING PLENARY: STRATEGIC ENERGY POLICY
                              OPPORTUNITIES FOR CANADA

            Panellists brought together the views heard during the conference in a
            message to governments, private sector and non-governmental actors:

            !   Chair:
            !   Michael Cleland, President, Canadian Gas Association
            !   Ken Ogilvie, Executive Director, Pollution Probe
            !   Mark Jaccard, Professor, School of Resource and Environmental
                Management, Simon Fraser University
                                                             FUELING OUR FUTURE:   31
PUBLIC POLICY FORUM             STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

3:15 p.m. CONCLUDING REMARKS

           !     Ken McCready, Policy Advisor, Energy Council of Canada
                 (Conference Chair)
           !     Jodi White, President, Public Policy Forum

3:30 p.m. ADJOURN
32 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA               PUBLIC POLICY FORUM

ANNEX 2 – CONFERENCE PARTICIPANT LIST

Speakers

Mr. George R. M. Anderson         Mr. Blaine Favel                Mr. Harold Kvisle
Deputy Minister                   Former Grand Chief              President and Chief
Natural Resources Canada          Federation of Saskatchewan      Executive Officer
                                  Indian Nations                  TransCanada Corp
Mr. Michael Cleland
President and Chief               The Honourable Joseph           M. Gaétan Lussier
Executive Officer                 Handley                         Administrateur
Canadian Gas Association          Premier
                                  Government of the Northwest     Mr. David Manning
M. Marcel Côté                    Territories                     Senior Vice President
Founding Partner                                                  KeySpan Energy
Secor Conseil                     Mr. Duncan Hawthorne
                                  President and Chief Executive   Dr. Thomas Marr-Laing
Mr. Patrick D. Daniel             Officer                         Policy Director
President & Chief                 Bruce Power                     Pembina Institute
Executive Officer
Enbridge Inc                      Mr. T. J. (Tim) Hearn           Mr. Ken McCready
                                  Chairman, President and Chief   Policy Advisor
Mr. Jim Dinning                   Executive Officer               Energy Council of
Executive Vice President          Imperial Oil Ltd                Canada
TransAlta Corp
                                  Dr. Mark Jaccard                Ms. Patricia McCunn-
The Honourable Dwight             School of Resource and          Miller
Duncan                            Environmental Management        Co-Chair
Minister of Energy Chair of       Simon Fraser University         Energy and Climate
Cabinet and Government                                            Change Initiative
House Leader                      Mr. Derek Jansen                National Round Table on
The Executive Council of          Vice President, Syndicated      the Environment and the
Ontario                           Studies and Special Projects    Economy
Government of Ontario             EKOS Research Associates
                                  Inc                             Mr. Val Mirosh
The Honourable John                                               Vice President and
Efford                            Mr. John Keating                President of Olefins and
Minister                          President                       Feedstocks
Natural Resources Canada          Canadian Hydro Developers       NOVA Chemicals Corp

Mr. Murray J. Elston              Mr. Hans Konow                  Mr. Ken Ogilvie
President and Chief               President and Chief Executive   Executive Director
Executive Officer                 Officer                         Pollution Probe
Canadian Nuclear                  Canadian Electricity
Association                       Association
                                                            FUELING OUR FUTURE:   33
PUBLIC POLICY FORUM            STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

Mr. Gerard J. Protti       Dr. Robert G. Skinner             Ms. Jodi White
Executive Vice President   Director                          President
Corporate Relations        Oxford Institute for Energy       Public Policy Forum
EnCana Corporation         Studies
                                                             Mr. Steve Williams
Ms. Vicky J. Sharpe        Mr. Thierry Vandal                Executive Vice-President
President and Chief        President                         Suncor Energy Inc
Executive Officer          Hydro-Québec
Sustainable Development
Technology Canada
34 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA                PUBLIC POLICY FORUM

Participants                      M. Etienne Bernier               Mr. William R.
                                  Candidat au Ph.D.                Clapperton
Mr. Pierre Alvarez                École polytechnique de           Vice President Regulatory
President                         Montréal                         Stakeholder &
Canadian Association of                                            Environmental Affairs
Petroleum Producers               Mr. Arthur Birchenough           Canadian Natural
                                  Board Member                     Resources Ltd
Mr. Dale Austin                   Ontario Energy Board
Director                                                           Mr. Jim Clarke
Energy Policy                     Mr. Michael Bourque              Executive Director
Natural Resources Canada          Vice President, Public Affairs   Regulatory Affairs
                                  Canadian Chemical Producers'     Canadian Nuclear Safety
Ms. Nancy Averill                 Association                      Commission
Director of Research and
Methodology                       Mr. Frederick Boyd               Mr. Denis Connor
Public Policy Forum               Editor                           President and Chief
                                  Canadian Nuclear Society         Executive Officer
Mr. Dane Baily                                                     QuestAir Technologies
Vice President                    Mr. David Breakwell
Canadian Petroleum                Acting Assistant Deputy          Mr. Steve Coupland
Products Institute                Minister                         Manager, Issues and
                                  Department of Energy             Policy Development
Mr. Steve Baker                   Government of Alberta            Bruce Power
Vice President Gas Supply
and Market Planning               Mr. James D. Brown               Mr. Tyler Cummings
Union Gas Ltd                     Climate Change Advisor           Policy Analyst Energy
                                  Shell Canada Ltd                 Foreign Affairs Canada
Mr. Jacques Beauchamp
President                         Mr. David Butters                Mr. Bob Cunningham
Pétromont and Company,            President                        Managing Director
Limited Partnership               Association of Power             Propane Gas Association
                                  Producers of Ontario             of Canada
M. Frédéric Beauregard-
Tellier                           Mr. Richard J. Campbell          M. Alain Daneau
Analyste                          Special Advisor Regulatory       Directeur général
Library of Parliament             Affairs                          Agence de L'éfficacité
                                  Enbridge Inc                     Energétique
Mr. Jean Bélanger                                                  Gouvernement du Québec
Member                            Ms. Denise Carpenter
National Round Table on           Senior Vice President            Mr. George Davies
the Environment and the           EPCOR Utilities Inc              President
Economy                                                            Acres International
                                  Mr. Ken Chapman
                                  Principal
                                  Cambridge Strategies Inc
                                                             FUELING OUR FUTURE:   35
PUBLIC POLICY FORUM             STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

Mr. Robert Day              Mr. Graeme Flint                  Mr. James Greene
Senior Vice President,      Vice-President, Development       Chief, Resource and
Public Sector Relations     and Joint Venture                 Environmental Taxation
TransCanada Corp            Management                        Finance Canada
                            NOVA Chemicals Corp
Mr. John Dillon                                               Ms. Peggy Hallward
Vice President Regulatory   Mr. Andrew Fraser                 Senior Policy Advisor
Affairs and General         Policy Analyst                    Electricity and Industrial
Counsel                     Strategic Policy and Advocacy     Combustion
Canadian Council of Chief   Western Economic                  Environment Canada
Executives                  Diversification Canada
                                                              Mr. David Harary
Ms. Elizabeth Dowdeswell    Mr. Raymond Frenette              Senior Commerce Officer
President                   Chairman of the Board             Industry Canada
Nuclear Waste Management    Atomic Energy of Canada
Organization                Limited                           Mr. Richard M. Harris
                                                              Partner
M. Claude Drzymala          Mr. Timothy Gardiner              KPMG LLP
Conseiller principal,       Chief Resources, Energy and
Énergie                     Environment                       Mr. Don Herring
Industry Canada             Finance Canada                    President
                                                              Canadian Association of
Mr. Richard G. Dupuis       Mr. Tim Gigliotti                 Oilwell Drilling
Director - Ottawa           Manager, Policy and               Contractors
Imperial Oil Ltd            Government Relations
                            Ontario Power Generation Inc      Ms. Eleanor J. Hills
Mr. Jack Ebbels                                               Program Coordinator
Deputy Minister British     Mr. David W. Goffin               Electricity and Industrial
Columbia Offshore Oil and   Vice President Business &         Combusion
Gas Team                    Economics                         Environment Canada
Government of British       Canadian Chemical Producers'
Columbia                    Association                       Mr. Bill Hopper
                                                              President
Mr. Tim Egan                Mr. Daniel Goodwin                W.H. Hopper Inc
Senior Advisor Issues       Government Relations
Management                  Public Affairs                    Mr. Robert Hornung
Canadian Electricity        Irving Oil Ltd                    President
Association                                                   Canadian Wind Energy
                            Mr. Dave Goulding                 Association
Mr. Ted Ferguson            President and Chief Executive
Vice President              Officer
The Delphi Group            Independent Electricity
                            System Operator
36 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA                PUBLIC POLICY FORUM

Mr. Paul T. Hough PhD             M. Philippe Kleinschmit          Mr. Ken MacDonald
Senior Policy Officer             Conseiller économique            Vice President
Regulatory Management             Ministère des Ressources         BP Canada Energy
and Government Relations          naturelles, de la Faune et des   Company
Division                          Parcs
Canadian Nuclear Safety           Gouvernement du Québec           Mr. Glenn MacDonell
Commission                                                         Director, Energy
                                  Mr. Claude-André Lachance        Directorate
Mr. Jim Hughes                    Director, Public Policy          Industry Canada
Manager, Energy Analysis          Dow Chemical Canada Inc
Corporate Planning and                                             Mr. Brian D. MacTavish
Communications                    Mr. James Lahey                  President and Chief
Imperial Oil Ltd                  FORMER Associate Secretary       Executive Officer
                                  HR Reform                        CANDU Owners Group
Dr. Eddy Isaacs                   Treasury Board of Canada,        Inc
Managing Director                 Secretariat
Alberta Energy Research                                            Mr. John Margeson
Institute                         Mr. Doug Larocque                Chemical and Plastics
Government of Alberta             Manager, Gas Procurement         Specialist
                                  IMC Canada ULC                   Industry Canada
Ms. Allison Kalmakoff
Consultant                        Ms. Sue Lee                      Mr. Mark Marissen
National Public Relations         Senior Vice-President, Human     Principal
                                  Resources and                    Burrard Communications
Mr. Chris Kieley C.A.             Communications                   Inc
Assistant Deputy Minister,        Suncor Energy Inc
Energy                                                             Mr. Peter Mason
Department of Natural             Ms. Claudia Lemieux              Vice President and
Resources                         Director, Communications and     General Manager Nuclear
Government of                     Media Relations                  Products
Newfoundland and                  Canadian Nuclear Association     General Electric Canada
Labrador
                                  Mrs. Oryssia J. Lennie           Ms. Velma McColl
Ms. Colleen Killingsworth         Deputy Minister                  Senior Consultant
President                         Western Economic                 The Earnscliffe Strategy
The Canadian Centre for           Diversification Canada           Group
Energy Information
                                  Ms. Caroline Linke               Ms. Margaret McCuaig-
Mr. Peter Kinnear                 First Secretary                  Johnston
Regulatory and Government         Australian High Commission       Assistant Deputy Minister
Affairs                                                            Energy Technology and
Canadian Natural Resources        Mr. John Lowe                    Programs Sector
Ltd                               Executive Director               Natural Resources Canada
                                  Natural Resources Canada
                                                                FUELING OUR FUTURE:   37
PUBLIC POLICY FORUM                STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

Ms. Sarah McCullough           Ms. Kate M. Moir                  Mr. Gene Nyberg
Manager, Governmental          Director                          Acting Executive Director
and Regional Affairs           Electricity and Industrial        and Chief Executive
Duke Energy Gas                Combustion                        Officer
Transmission Canada            Environment Canada                National Round Table on
                                                                 the Environment and the
Mr. Don McCutchan              Mr. Chris Monahan                 Economy
International Policy Advisor   Director, Business Cluster
Gowling Lafleur Henderson      Policy Secretariat                Mr. Richard O'Farrell
LLP                            Economic Development and          Manager, External
                               Trade                             Relations
Mr. Dan McFadyen               Government of Ontario             Imperial Oil Ltd
Vice President Regulatory
Affairs and Public Policy      Mr. Steve Moran                   Mr. Dan Ouimet
Canadian Energy Pipeline       Manager Government and            Director Government
Association                    Industry Relations                Relations
                               NOVA Chemicals Corp               TransCanada Corp
Mr. Greg McGuire
Consultant                     Mr. Adam Moser                    Mr. David Oulton
Marbek Resource                Business Development Officer      Assistant Deputy Minister
Consultants Ltd                Oil and Gas                       Natural Resources Canada
                               Industry Canada
Mr. Tim McIntosh                                                 Mr. Richard Paton
Director, Demand Policy        Mr. Michael N. Murphy             President and Chief
and Analysis Division          Senior Vice-President, Policy     Executive Officer
Natural Resources Canada       The Canadian Chamber of           Canadian Chemical
                               Commerce                          Producers' Association
Mr. Les McKay
Vice President, Executive      Mr. Peter Naglik                  Dr André Plourde
Office                         Director                          Professor and Chair
Hydro One Inc                  High Park Group                   Department of Economics
                                                                 University of Alberta
Ms. Joanne McKenna             Mr. Harry J. Near
Senior Policy Coodinator       Principal                         Mr. David Podruzny
British Columbia Hydro         The Earnscliffe Strategy          Senior Manager, Business
and Power Authority            Group                             and Economics
                                                                 Canadian Chemical
Mr. Joe Miller                 Mr. Andrew Noseworthy             Producers' Association
Executive Director Policy,     Senior Advisor to the
Planning and External          President                         Mr. David Pollock
Relations                      Atlantic Canada Opportunities     Executive Director
Government of Alberta          Agency                            BIOCAP Canada
                                                                 Foundation
38 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA               PUBLIC POLICY FORUM

Mr. Mark S. Rudolph               Dr. Murray J. Stewart           M. Pierre Vézina
President                         President                       Directeur, énergie
Justenvironment                   Energy Council of Canada        Conseil de l'industrie
                                                                  Forestière du Québec
Mr. Michel Scott                  Mr. Ron Stewart                 Gouvernement du Québec
Vice President, Government        President & Chief Executive
and Public Affairs                Officer                         Mr. Kenneth W. Vollman
Devon Canada Corp                 Hydro Ottawa Holding Inc        Chairman and Chief
                                                                  Executive Officer
Mr. Bob Séguin                    Mr. Cal Stotyn                  National Energy Board
Assistant Deputy Minister         Manager, Energy, Natural
Economic Development and          Resources and Transportation    Dr. Grant Wach
Trade                             Sector Council Program          Professor of Petroleum
Government of Ontario             Workplace Branch                Geoscience Director -
                                  Human Resources and Skills      Energy at Dalhousie
Mr. Peter Sharp                   Development Canada              Department of Earth
Senior Policy Analyst                                             Sciences
Climate Change and Energy         M. Denis Tanguay                Dalhousie University
Division                          Président-directeur général
Foreign Affairs Canada            Association québécoise pour     Mr. David Watters
                                  la maîtrise de l'énergie        President
Mr. Al Shpyth                                                     Corporate & Government
Director, Government              Mr. Michael G Taylor            Consulting
Relations                         Vice President                  Global Advantage
Cameco Corporation                Corporate Affairs               Consulting
                                  Atomic Energy of Canada
Mr. Kurt Simonsen                 Limited                         The Honourable Howard
Manager, Utilities                                                I. Wetston
Energy Development                Ms. Annette Tobin               Chair
Initiative                        Policy Analyst                  Ontario Energy Board
Government of Manitoba            Energy Policy
                                  Natural Resources Canada        Mr. Sean Whittaker
Mr. Brian A. Smith                                                Consultant
Principal                         Mr. Eli Turk                    Marbek Resource
Altavista Consulting              Vice President Government       Consultants Ltd
International                     Relations
                                  Canadian Electricity            Mrs. Colleen Wilson
Mr. Adam Sparkes                  Association                     Director, Corporate
Legal and Regulatory                                              Communications
Policy Advisor                    Mr. Ron Turner                  ATCO Gas and ATCO
Department of Natural             Executive Vice President, Gas   Electric
Resources                         Transmission
Government of                     TransCanada Corp                Mr. Floyd Wist
Newfoundland and                                                  Director
Labrador                                                          Government of
                                                                  Saskatchewan
                                                              FUELING OUR FUTURE:     39
PUBLIC POLICY FORUM              STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

Mr. Alex Wood                Mr. David Woynorowski             Mr. Gerry Wright
Policy Advisor               Director                          General Manager
Ecological Fiscal Reform     Western Economic                  National Electricity
Program                      Diversification Canada            Round Table
National Round Table on
the Environment and the      Mr. Allen Wright
Economy                      Executive Director
                             The Coal Association of
                             Canada



Public Policy Forum Staff

Ms. Kelly Cyr               Ms. Dianne Gravel-            Ms. Julia Oliveira
Senior Project Assistant    Normand                       Project Assistant
Public Policy Forum         Project Assistant             Public Policy Forum
                            Public Policy Forum
Ms. Erika-Kirsten                                         Mr. Yves Poisson
Easton                      Mr. Patrick Kirby             Director of Special
Research Associate          Research Assistant            Projects
Public Policy Forum         Public Policy Forum           Public Policy Forum

Ms. Beth Everson            Ms. Geneviève Lépine
Director of                 Senior Research
Communications              Associate
Public Policy Forum         Public Policy Forum
40 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA                            PUBLIC POLICY FORUM



ANNEX 3 – SPEAKERS’ BIOGRAPHIES
(IN ORDER OF APPEARANCE)

Jodi White
President, Public Policy Forum

Jodi White is President of the Public Policy Forum, an independent, national, not-for-profit
organization with a mandate to promote better public policy and better public management
through dialogue among leaders from the public, private, labour and voluntary sectors.

Ms. White’s career combines experience in journalism, in politics and government, in the private
sector and in international affairs.

As a journalist, she spent six years at the CBC, first as a television news reporter and
subsequently as a network radio producer.

Her experience in government and politics includes positions as chief of staff to the Minister of
External Affairs (1984 – 1988) and chief of staff to the Prime Minister (1993).

From 1994 – 2000 Ms. White was vice-president, Corporate Affairs, at Imasco Ltd. in Montreal
where she was responsible for issues management and strategic positioning across the spectrum
of public affairs, government relations and public policy. From 2000 – 2003 she was president of
Sydney House, a public affairs consulting firm.

Ms. White has been and continues to be an active participant on a number of boards including the
National Theatre School, the Canadian Institute of International Affairs, the Stratford Festival, the
Southern Africa Education Trust Fund, Bishop’s University and the Ottawa General Hospital.
She served on the board of the Public Policy Forum from 1989 – 1998, including three years as
chair, and has participated as both a member and chair of numerous juries for national awards
including the Pearson Peace Medal, the Hy Solomon Award for Public Policy Journalism and the
Michener award for journalism studies.

Ms. White is a graduate of the University of Toronto with a Bachelor’s degree in political science
and Carleton University with an honours Bachelor of Journalism.

Ken F. McCready
Senior Policy Advisor, Energy Council of Canada

Mr. McCready serves as Senior Policy Advisor to the Energy Council of Canada.

He has had a long career in conventional energy, alternative energy and large project
development – most recently in his roles with biomass energy startup companies and earlier in his
role as President and CEO of TransAlta Corporation. He currently sits on a number of Canadian
and international Boards, including: EnCana Corporation, Computer Modelling Group, Nexterra
Energy Corp., Biosphere Refineries Corp., and Innovest Strategic Value Advisors, Inc. In
addition he serves as Chair, Natural Resources Canada Advisory Board on Energy Science and
Technology and as a member of the Federal Minister's Advisory Council on Science and
Technology. Mr. McCready's previous positions included: Chair, Alberta Round Table on
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Environment and Economy, Chair, Conference Board of Canada, Member, Asea Brown Boveri,
Environment Advisory Board, Dow Chemical Corporate Environment Advisory Council, and the
World Business Council for Sustainable Development.

Derek Jansen
Vice President, Ekos Research Associates

Derek Jansen has over 12 years experience as a supplier of public opinion, public policy, and
communications research. He has held progressively more senior roles and responsibilities within
each of public opinion firms he has worked. He has recently re-joined EKOS as Vice President,
Syndicated Products and Special Studies. Derek was instrumental in the launching of EKOS’
groundbreaking syndicated study, Rethinking Government, in 1994.

Prior to re-joining EKOS, Derek was a Vice President at the Ipsos-Reid Corporation. At Ipsos-
Reid, Derek’s responsibilities focused on the management of projects in the Public Affairs
Division of the firm. Derek began his career in public policy and public opinion research in the
early 1990s with Environics-DRZ.

Derek graduated with a Bachelor of Commerce from McGill University, and holds a Master of
Management Studies degree (with Distinction) from Carleton University.

Hans R. Konow
President & CEO, Canadian Electricity Association
Hans R. Konow is President and CEO of the Canadian Electricity Association. Formerly he was
Vice President, Public Affairs with the Association after a number of years in government and
private consulting.

Mr. Konow is a member of the Energy and Chemicals SAGIT, the NERC Stakeholders
Committee, and the Friday Group. He serves on the Board of the Energy Council of Canada, the
Standards Council of Canada, and CEA Technologies Inc.
Mr. Konow received a B.A. from Sir George Williams University in 1971.

Robert Skinner
Director, Oxford Institute of Energy Studies

    -   Director of Oxford Institute for Energy Studies since May 1, 2003.
    -   Senior Research Fellow, St Antony’s College, Oxford University;
    -   Administrator, Northern Pipeline Agency (2002/03) and President, Robert G. Skinner &
        Associates Ltd. Calgary, Canada (2001-03);
    -   TOTAL. (1996 to 2001); VP, Business Development—Oil Sands, Canada, Senior
        Advisor Natural Gas, Paris;
    -   International Energy Agency, Paris (1989-1995); Director, Policy Office;
    -   Government of Canada, Energy, Mines & Resources (1970 to 1988): Assistant Deputy
        Minister, Energy Commodities (1985-88), previously Director General, Natural Gas,
        Administrator of regulated oil prices, leading role in energy market and trade reform;
        northern energy and environmental policies and major northern geoscience research
        programs; and Scientific Advisor to Foreign Affairs.
    -   Research geologist, Geological Survey of Canada (1970 to 1974).
    -   Hon BSc Geology Queen’s University, Canada (1968); MSc (1969), PhD Geology,
        University of Washington, Seattle (1971)
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Timothy J. Hearn
Chairman, President & CEO, Imperial Oil Limited

Tim J. Hearn is chairman, president and chief executive officer of Imperial Oil Limited.

Born in Regina, Saskatchewan, Mr. Hearn is a graduate of the University of Manitoba. He joined
Imperial Oil as a marketing representative in 1967 and held progressively more responsible
management positions in marketing, refining, and systems and computer services. He was named
vice-president, marketing retail for Imperial in 1986 and vice-president, marketing retail and
commercial business in 1990.

In 1992, Mr. Hearn accepted a loan assignment as worldwide vice-president of intermediates for
Exxon Chemical Company. From 1994 to 1997, he served as president of Exxon Chemical Asia
Pacific based in Singapore.

In 1997, Mr. Hearn served as executive assistant to the chairman of Exxon until his appointment
as vice-president of human resources for Exxon Corporation in 1998. Following the merger of
Exxon Corporation and Mobil Oil in late 1999, he was appointed vice-president of human
resources for Exxon Mobil Corporation.

On January 1, 2002, Mr. Hearn assumed the position of president of Imperial Oil Limited and on
April 23, 2002, he was appointed chairman, president and chief executive officer. Mr. Hearn is a
member of the Board of Directors of The Conference Board of Canada and the C.D. Howe
Institute, and is a member of the Canadian Council of Chief Executives. He co-chairs a multi-
year, fund-raising campaign for the University of Alberta and is a cabinet member of the United
Way of Greater Toronto for 2004.

George R. M. Anderson
Deputy Minister, Natural Resources Canada

George R.M. Anderson was appointed Deputy Minister of Natural Resources Canada in May
2002. He had been the Deputy Minister (Intergovernmental Affairs) in the Privy Council Office
since August 1996.

Mr. Anderson has a B.A., Queen's University, a M. Litt. in Political Science, Oxford University,
and a diploma from the École nationale d'administration in Paris, France. He joined the federal
public service in 1972, starting in the Privy Council Office. He subsequently served in Indian and
Northern Affairs Canada, the Treasury Board Secretariat and the Federal-Provincial Relations
Office, before going to the Department of External Affairs, where he served as Director of the
Western European Division from 1980 to 1983.

He was then appointed Deputy Administrator of the Canada Oil and Gas Lands Administration,
the agency responsible for managing oil and gas activities in Canada's offshore and northern
territories. In January 1986, Mr. Anderson became Assistant Deputy Minister of the Energy
Policy Sector of the former Energy, Mines and Resources (EMR).
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In December 1988, the Energy Policy Sector was combined with the Energy Commodities Sector,
and Mr. Anderson was named Assistant Deputy Minister for the new Energy Sector. He left EMR
to become Assistant Deputy Minister of the Economic Development Policy Branch in the
Department of Finance in January 1990.
He was a fellow at Harvard University's Center for International Affairs in 1992-93. On returning
to Canada, he headed the negotiations and start-up of the new government's infrastructure
program, first as an Assistant Secretary in the Privy Council Office and subsequently as
Executive Director with the Treasury Board Secretariat. In July 1995, he was named Head of
Policy Branch at the Department of Foreign Affairs and International Trade.

In February 1996, he was named the Deputy Secretary of Intergovernmental Policy and
Communications at the Privy Council Office, before becoming Deputy Minister
(Intergovernmental Affairs) in the Privy Council Office in August 1996.

He is married to writer and biographer Charlotte Gray. They have three sons, Alexander,
Nicholas and Oliver. He is a trustee of Queen's University.

Val Mirosh
Vice-President & President of Olefins and Feedstocks, NOVA Chemicals
Val Mirosh has 35 years experience in the petrochemical and energy industry. Prior to NOVA
Chemicals, he held various senior executive roles at TransCanada Pipelines Ltd. He served as the
Executive Vice President of Regulatory Strategy and Northern Development; Sr. Vice President,
Corporate Strategy and Business Development; President, Alberta Natural Gas Company; and the
Executive Vice President of Operations for Alberta Natural Gas Company. Prior to TransCanada
Pipelines, he was a Partner at the Canadian law firm Macleod Dixon, working on legal matters
relating to the petrochemical, oil and gas, and mineral industries.
Mirosh earned a Bachelor of Science degree in chemical engineering in 1968 from the University
of Alberta and holds a 1970 Master of Applied Science Degree in Chemical Engineering from the
University of Waterloo. He also earned his Bachelor of Laws degree at the University of Alberta
in 1973.

David J. Manning
Senior Vice President, Corporate Affairs, KeySpan Energy

David J. Manning was elected Senior Vice President of Corporate Affairs of KeySpan Energy in
April 1999. Mr. Manning is the Senior Officer reporting to the Chairman, with responsibility for
Public Affairs, Government Relations, internal and external communications, community
development and altruism, corporate brand strategy, and environmental policy and operations.

Before joining KeySpan Energy, Mr. Manning had been President of the Canadian Association of
Petroleum Producers (CAPP) since 1995. From 1993 to 1995, he was Deputy Minister of Energy
for the Province of Alberta, Canada, the source of approximately 14 percent of U.S. natural gas
demand.

From 1988 to 1993, he was Senior International Trade Counsel for the Government of Alberta,
based in New York City. Previously he was in the private practice of law in Alberta, Canada.
Mr. Manning is eligible for admission to the New York Bar.
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KeySpan Energy is the 4th largest natural gas distributor in the United States, serving much of
New York City, Long Island, Boston and New Hampshire. It is also the largest investor-owned
electric power generator in New York State, and operates the LIPA electric system on Long
Island under contract.

Mr. Manning is past Chairman of the Brooklyn Chamber of Commerce, Vice Chairman of the
Long Island Housing Partnership Board, and Coordinating Committee Co-chair of the current
National Petroleum Council Natural Gas Study.

Thomas Marr-Laing
Policy Director, Pembina Institute for Appropriate Development

Tom Marr-Laing is Policy Director of the Pembina Institute. His degree in engineering, coupled
with fourteen years of working at the Pembina Institute gives him a solid understanding of air
quality management and other issues related to energy developments.

During this time, Tom has helped lead the Pembina Institute’s work in monitoring and advocating
for practices and policies that reduce the environmental impacts associated with conventional oil
and gas, electricity, and oil sands development. He has extensive experience with multi-
stakeholder processes, including the Clean Air Strategic Alliance (CASA) of which he is a Vice-
President, and various other bodies working on strategic energy/environment issues.

Tom co-chaired the original CASA Solution Gas Flaring project team, which developed the
regulatory framework that has facilitated a 70% reduction in solution gas flaring in Alberta.

Tom was an active member of the CASA Electricity Project Team, which developed the
comprehensive framework for air emissions management of the Alberta electric power sector
recently adopted as policy by the provincial government. He has co-authored several reports and
guides assessing environmental issues, pollution prevention opportunities, and regulatory issues
associated with the oil and gas and electricity generation industries. His writings have focused on
problem analysis as well as offering practical solutions for reducing the impacts of energy
developments.

Marcel Côté
Senior Partner, Secor

Marcel Côté is a senior partner of Secor, a Montreal-based consulting firm, as well as a Fellow of
the Center for International Affairs at Harvard University. He is the author of By Way of Advice:
Economic Strategies for a Market Driven World and co-author of Growing the Next Silicon
Valley and If Quebec Goes…The Real Cost of Separation. Mr. Côté writes a monthly economics
column for CA Magazine and frequently speaks on economic issues to business forums. In his
public service career, he has acted as an economic adviser to the Premier of Quebec and was
Director of Strategic Planning and Communication for the Office of the Prime Minister of
Canada. Mr. Côté holds a M.Sc. in economics from the Graduate School of Industrial
Administration of Carnegie Mellon University and has taught at the Université de Sherbrooke and
the Université du Québec à Montréal.
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The Honourable Joseph Handley
Premier, Government of the Northwest Territories

Weledeh MLA, Joseph (Joe) Handley, is the eighth Premier of the Northwest Territories.

Mr. Handley was first elected as the Member for Weledeh in the 14th Legislative Assembly on
December 6th, 1999 after serving as a Deputy Minister for the Government of the Northwest
Territories for more than 14 years.

In January 2000, Mr. Handley was appointed Minister of Finance, Chairman of the Financial
Management Board and Minister Responsible for the Workers' Compensation Board. In
November 2001, Mr. Handley was appointed Minister of Transportation and Minister
Responsible for the NWT Power Corporation.

Born on August 9, 1943 in Meadowlake, Saskatchewan, Mr. Handley moved to the Northwest
Territories in 1985 to assume the position of Deputy Minister of Education with the Government
of the Northwest Territories. He has also served as the Deputy Minister for the Departments of
Renewable Resources, Transportation and Resources, Wildlife and Economic Development as
well as the President of the NWT Housing Corporation.

Prior to moving north, Mr. Handley was the official trustee and superintendent of the Frontier
School Division in Manitoba for nine years. He was an Assistant Professor at both the University
of British Columbia and the University of Manitoba.

He served for two years as a lecturer at the Cape Coast University and Winneba Teacher Training
College in Ghana, West Africa and was a teacher and vice-principal at schools in Saskatchewan.

Mr. Handley and his wife Theresa have two children Michael and Michelle and four
grandchildren who all live in Yellowknife.

The Honourable Dwight Duncan
Minister of Energy, Government of Ontario

The Hon. Dwight Duncan was first elected to the Ontario legislature in June 1995 as a Member of
Provincial Parliament for Windsor St- Clair. In October 2003, Minister Duncan was appointed by
the Premier of Ontario to serve as Government House Leader, Chair of Cabinet and Minister of
Energy.

Since becoming Minister of Energy, Mr. Duncan has brought positive and meaningful change to
Ontario’s electricity sector. His goals are aimed at creating a culture of conservation in the
province, while ensuring a reliable, sustainable, diverse and competitively priced supply of
power.

In November, he introduced the Ontario Energy Board Amendment Act, which replaced an
artificially low price cap on electricity in favour of a price structure that more accurately reflects
its true cost. The Act, which was passed into law in December, will also ensure that electricity
costs are passed on to consumers through an independent regulator, not by politicians.
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In June, he introduced the Electricity Restructuring Act, which is expected to be passed into law
this Fall. The Act proposes to create a new “Ontario Power Authority” to ensure long-term
electricity supply adequacy – a mandate that no existing institution in Ontario’s electricity sector
now fulfills. It also proposes a dedicated “Conservation Bureau”, which would coordinate
conservation programs across the province.

Mr. Duncan has also made a number of announcements to enhance Ontario’s supply of clean
electricity, including the expansion of hydroelectric power generation at Niagara Falls. He has
also released calls for proposals for 2,500 megawatts of new capacity or conservation initiatives,
and 300 megawatts of power generated from green, renewable sources. These initiatives will help
the Ontario government meet its target to replace coal fired generation, and to ensure that 5% of
Ontario’s total energy capacity comes from new renewable sources by 2007.

The Ontario government has also set a target to cut overall electricity demand by 5% by 2007,
and for government to cut its own electricity consumption by 10% in the same timeframe. Among
his plans to meet this target, Mr. Duncan has announced a plan to install a smart electricity meter
in 800,000 Ontario homes and small businesses by 2007, and in every Ontario home and small
business by 2010. He has also recently allowed local electricity distribution companies to invest
$225 million in new conservation initiatives, which is one of the largest such investments in
Ontario’s history.

A graduate of McGill University and the University of Windsor, Mr. Duncan has degrees in
economics and commerce, as well as a Master of Business Administration (MBA). He has one
son, Sean, aged 14.


Ken Ogilvie
Executive Director, Pollution Probe

Ken Ogilvie is the Executive Director of Pollution Probe, one of Canada’s most distinguished
environmental groups.

Ken oversees Pollution Probe’s active programmes including Air, Water, Energy, Canada’s
Kyoto Commitment / Climate Change, Mercury Reduction, and Environmental Policy
Development.

Ken joined Pollution Probe in October 1995 after serving for almost two years as the Executive
Coordinator of the Ontario Round Table on Environment and Economy. His position previous to
that was Manager of Policy Coordination for the Ontario Ministry of Environment and Energy.
He has also worked for Environment Canada and the Manitoba Department of Environment.

Ken has 25 years of experience in government, institutional and not-for-profit organization
positions, ranging from project engineering to policy development and public advocacy. He has
had international experience as the Acting Director of the federal Great Lakes Program and as a
lecturer on sustainable development institutions, tools and techniques in Malaysia and Romania.
He is also actively involved in environmental standard setting work, especially work related to
the ISO 14000 series of environmental management standards.

Ken is currently serving on several boards, task forces, and advisory panels, some of which
include: Vice-Chair of the National Round Table on the Environment and the Economy; Member
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of the Board of Directors of Sustainable Development Technology Canada; Board Member and
Executive Committee Member of BIOCAP Canada; Member of the Advisory Panel to the Federal
Commissioner for the Environment and Sustainable Development; and Member of the Advisory
Panel to the Environmental Commissioner of Ontario.

Harold (Hal) Kvisle
President & Chief Executive Officer, TransCanada Corporation

Hal Kvisle was appointed President and Chief Executive Officer of TransCanada in April 2001.
Mr. Kvisle joined TransCanada in 1999 as Executive Vice-President, Trading and Business
Development with responsibility for business development initiatives, with a focus on power and
pipeline ventures within the Northern tier of North America. He was also responsible for
TransCanada’s marketing and trading activities in power and natural gas. Mr. Kvisle came to
TransCanada from Fletcher Challenge Energy (FCE), where he held the positions of Chief
Operating Officer, FCE Americas, and President, FCE Canada. In these roles, he was responsible
for the initiation and growth of FCE’s successful Canadian upstream business and its early-stage
ventures in Venezuela, Argentina and Mexico.

Prior to working with FCE, Mr. Kvisle worked at Dome Petroleum as a petroleum engineer,
engineering manager and finance manager. From 1987 to 1988, he played a lead role in the sale
of Dome Petroleum to Amoco Canada. Mr. Kvisle has also worked as an independent energy
consultant advising Canadian and international companies on energy opportunities. In that
capacity, he concluded several significant transactions, including FCE’s landmark acquisition of
oil and gas assets from Amoco Canada.

Mr. Kvisle serves as Chairman of the Board of Governors of Mount Royal College, and is on the
board of directors for both PrimeWest Energy Trust and Norske Skog Canada. Mr. Kvisle was
elected as the 2004 Interstate Natural Gas Association of America’s (INGAA) Chairman of the
Board. He was the first Canadian ever elected as Chairman of INGAA and now serves as past
Chair.

Mr. Kvisle is a member of the Association of Professional Engineers, Geologists and
Geophysicists of Alberta (APEGGA), the Society of Petroleum Engineers and MBA Associates,
University of Calgary and the Canadian Council of Chief Executives. He also sits on the board of
the Interstate Natural Gas Association of America. He has also served several terms as a
Governor of the Canadian Association of Petroleum Producers (CAPP).

Steven W. Williams
Executive Vice President, Oil Sands, Suncor Energy Inc.

Steve's primary role is to lead Suncor’s oil sands operations through its next stage of growth.
Suncor’s goal is to increase production to between 500,000 and 550,000 barrels per day by 2010
to 2012 from current capacity of 225,000 barrels per day.

Steve was formerly executive vice president, corporate development and chief financial officer–a
position he assumed in May 2002.

Since joining the company in 2002, Steve has focused on ensuring Suncor has the financial
strength to support its expansion efforts. He has also managed investor relations, finance and
treasury, strategic planning and corporate development, and has guided the company’s
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sustainable development initiatives and information technology strategies.

Steve has more than 20 years of international energy industry experience in the areas of strategy
development, company performance improvement, and refinery and chemical company
management. He has also provided leadership in the areas of environment, health and safety,
finance, sales and marketing, human resources, and information technology.

Before his appointment to Suncor, he was responsible for Octel Corp's global operation. He also
managed the operation of the largest refinery in the United Kingdom for ESSO.

Steve is a fellow of the Institute of Chemical Engineers and is a member of the Institute of
Directors. He is a board member of Canada's Climate Change Voluntary Challenge and Registry
Inc., the Alberta Chamber of Resources and the Oil Sands Safety Association, as well as a
committee member of the Advisory Committee to the Environment Minister, and an honourary
board member of the Northern Lights Regional Hospital Foundation.

Steve holds a Bachelor of Science in chemical engineering from Exeter University and is a
graduate of the Advanced Management Program at Harvard Business School as well as the
Business Economics Program at Oxford University.

He and his wife Mary have two children.

Gerard J. Protti
Executive Vice-President, Corporate Relations, EnCana Corporation

Gerard Protti is Executive Vice President Corporate Relations for EnCana Corporation. His
responsibilities include environment and regulatory affairs, aboriginal and community relations,
public affairs, international relations and safety, security and emergency preparedness. Prior to
this, Mr. Protti held the positions of Senior Vice President New Ventures, PanCanadian Energy
Corporation (2000-2002), President, PanCanadian Resources (1997-2000) and Senior Vice
President, Marketing and Downstream Business Development at PanCanadian Petroleum Limited
(1995-1997).

Mr. Protti came to PanCanadian from the Canadian Association of Petroleum Producers (CAPP)
where he was President since its inception in October 1992. Prior to his presidency at CAPP, he
was Executive Director of the Independent Petroleum Association of Canada (IPAC). Prior to
IPAC, Mr. Protti was assistant Deputy Minister with the Government of Alberta’s Energy
department. Previous employment also includes senior positions with the Alberta Treasury
department and the Canadian Energy Research Institute. He started his career in Toronto as an
economist with Ontario Hydro.

Mr. Protti was born in Edmonton and received a Bachelor of Arts, Honours (Economics) from the
University of Alberta in 1974 and a Master of Arts (Economics) from the University of Western
Ontario in 1975.

Mr. Protti is incoming Chairman (2003-2004) of the Canadian Chamber of Commerce,
immediate past Chairman of the Advisory Council to the Faculty of Management at the
University of Calgary and past Chairman of the Alberta STARS Foundation (Shock Trauma Air
Rescue Society).
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In addition, he is a member of the Alberta Economic Development Authority, a governor of the
Calgary Petroleum Club and a member of the Advisory Council to the Faculty of Business at the
University of Alberta.

Mr. Protti is married and has two sons.

Duncan Hawthorne
President and Chief Executive Officer, Bruce Power

Duncan Hawthorne is President and Chief Executive Officer of Bruce Power.

Duncan has more than 25 years of experience in the power engineering business and has held
senior managerial and engineering positions at major power companies in both the United
Kingdom and North America. He has worked extensively in the areas of business improvement
and business development and was responsible for several nuclear plant acquisitions in the United
States during the late 1990's. Duncan was the executive lead throughout the Bruce Nuclear
acquisition, the formation of Bruce Power and the development of the company's current
partnership structure.

Duncan participates in a number of provincial, national and international organizations related to
the electricity industry. He is Chair of the Canadian Nuclear Association (CNA), a Director of the
Energy Council of Canada and a member of the Board of Governors of the World Association of
Nuclear Operators (WANO). Duncan is also a member of the Board of Directors of General
Hydrogen.

Duncan has an Honours Degree in Control Engineering and an MBA from Strathclyde University
in Glasgow, Scotland. He is a Chartered Engineer and a Fellow of both the Institution of
Electrical Engineers and the Institution of Mechanical Engineers.

John D. Keating, C.A.
CEO, Canadian Hydro Developers, Inc.

John Keating is the CEO of TSE listed Canadian Hydro Developers, Inc. He founded the
company in 1989 with his brother Ross. John has truly been a pioneer in the independent power
business and renewables sector in Canada. He has advised the government on deregulation in
Alberta, and played key roles in many of the positive changes to provincial and federal incentives
for the promotion of renewable energy, and is a founding director of the Independent Power
Producer’s Society of Alberta. He has been a successful leader in both regulated and deregulated
times, and has always possessed a strong vision for Canadian Hydro. John has led Canadian
Hydro to the 2001 Award for Excellence in Management from the Arthur Kroeger College of
Public Affairs at Carlton University in Ottawa, and, recently, was a finalist for Entrepreneur of
the Year, Energy Category. John has been a Chartered Accountant for over 25 years. Canadian
Hydro is solely focused on low-impact electric power generation in Canada. Canadian Hydro
owns and operates 13 EcoLogo Certified run-of-river hydroelectric and wind energy plants in
central and western Canada, and currently has its first biomass generating plant under
construction. Several new projects are also under various stages of construction and/or
development in each of three Canadian provinces where Canadian Hydro operates.
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Thierry Vandal
President, Hydro-Québec Production

Mr. Vandal has been involved in the North American energy sector for more than 20 years. He
worked for six years in the oil industry (operations and marketing), four years in the
petrochemical industry (production, development and international marketing),and five years in
the natural gas industry with Gaz Métro, a major distributor of natural gas in Québec, where he
held various positions in the areas of marketing, business development and strategic planning.
Mr. Vandal joined Hydro-Québec in November 1996 as Vice President – Strategic Planning and
Business Development. In June 2001, he became President of Hydro-Québec Production. In this
capacity, he directs all activities related to generation, including the operation of power
generating facilities and development projects. He is also responsible for sales and electricity
trading on wholesale markets. In 2003, Hydro-Québec Production’s revenues reached $6.1
billion, net income was $1.74 billion, with total assets of $25.2 billion.

Mr. Vandal holds an engineering degree from École polytechnique (Université de Montréal,
1982) and an MBA from École des hautes études commerciales (Université de Montréal, 1995).
Mr. Vandal is Chairman of the boards of the Société d’énergie de la Baie James and H.Q. Energy
Services (U.S.) Inc. He is Chairman of the Board of Collège Notre-Dame. He also sits on the
boards of The Conference Board of Canada, Fondation Polytechnique, and Pointe-à-Callière
Museum.

Patrick D. Daniel
President & COO, Enbridge Inc.

Patrick Daniel was elected a Director of Enbridge Energy Company, Inc. in July 1996 and served
as its President from July 1996 through October 1997. Mr. Daniel has served as President of
Enbridge Inc. since September 2000 and as Chief Executive Officer of Enbridge Inc. since
January 2001. He previously served in other senior executive positions with Enbridge Inc. and
Enbridge Pipelines Inc. Mr. Daniel also serves on the Board of Directors for Enbridge Inc.

Daniel was rated #58 out of 200 on National Post’s Business magazine’s “2003 Bang for the
Buck” survey. This survey considered three variables to assess CEO performance: compensation,
three-year return on investment and “bang for the buck”. Daniel is a director of Enbridge Energy
Co. Inc., EnCana Corporation, and Enerflex Ltd. He is also a member of the Provincial Audit
Committee.

Enbridge was voted most respected in the category of community support in a poll conducted by
Alberta Venture magazine in 2003. Employees at Enbridge are actively involved in their
communities. The Canadian Centre of Philanthropy has recognized Enbridge for efforts with the
homeless and for the United Way Campaign which raised more than $1 million.

Gaétan Lussier
Chair, External Advisory Committee on Smart Regulation

Gaétan Lussier, Chair of the External Advisory Committee on Smart Regulation (EACSR),
serves as a Director or member of a number of corporate boards and not-for-profit associations.
From 1994 to 1999, Mr. Lussier was President and Chief Executive Officer of Culinar Inc., and
was President of Weston Bakeries Quebec from 1988 to 1994. In addition to his executive level
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experience in the private sector, Mr. Lussier enjoyed a long and influential career as a senior
public servant with both the Government of Canada and the Government of Quebec. Mr. Lussier
was appointed Deputy Minister of Agriculture for the Government of Quebec in 1971. Mr.
Lussier was Deputy Minister of Agriculture Canada and of Employment and Immigration
Canada, as well as President of the Unemployment Insurance Commission. A recipient of the
Order of Canada (1981), Mr. Lussier has received numerous other honours, including an
honourary doctorate in agricultural sciences from McGill University (1979), and the Ordre du
Mérite Agronomique de l'Ordre des Agronomes du Québec (1977).

Patricia McCunn-Miller
Vice-Chair, Co-Chair of the Energy and Climate Change Initiative, National Roundtable on
the Environment and the Economy

Patricia McCunn-Miller is a lawyer and is the former Vice-President, Environment and
Regulatory Affairs for EnCana Corporation, where she was responsible for stewarding corporate
environment and regulatory policies, including the development of the corporate responsibility
policy, greenhouse gas and regulatory strategies.

Ms. McCunn-Miller was appointed to the National Round Table on the Environment and the
Economy in 1998 and she is currently Vice-Chair of the NRTEE. In 2000, Ms. McCunn-Miller
was also appointed a Director of Climate Change Central (Alberta), a public-private partnership
that promotes innovative response to climate change and its impacts.

Prior to joining EnCana Corporation Ms. McCunn-Miller held the positions of Vice President and
General Counsel at Alberta's electric transmission administrator, Managing Director of
Environment and Regulatory for PanCanadian Energy, and General Counsel and Corporate
Secretary for the Alberta Petroleum Marketing Commission.

Ms. McCunn-Miller received her LL.B from the University of Ottawa in 1982. She is currently a
member of the Law Society of Alberta, and the Canadian Bar Association and has served on
numerous organizations as chair or director, including the Canadian Petroleum Law Foundation
and past chair of the Association of General Counsel of Alberta.

Blaine Favel

Blaine Favel is Plains Cree from Poundmaker First Nation in Saskatchewan. Mr. Favel is an
advisor to First Nations on energy issues ranging from oil sands development, oil and gas
exploration and production, and pipeline issues. Mr. Favel was formerly Chief of Poundmaker
Cree Nation, and Grand Chief of the Federation of Saskatchewan Indian Nations. As Grand
Chief, Mr. Favel was instrumental in the establishment of the Saskatchewan Indian Gaming
Authority, the first Indian gaming enterprise in Canada and in the founding of the First Nations
Bank of Canada. Mr. Favel practiced law with Bennett Jones, and worked with RBC Capital
Markets in the Energy investment banking group in Calgary. Mr. Favel has an LL.B from Queens
University and MBA from Harvard Business School.

Vicky J. Sharpe
President & CEO, Sustainable Development Technology Canada

Vicky Sharpe is President and CEO of Sustainable Development Technology Canada. Previously,
she was President of GRI Canada and Astral Group where she demonstrated leadership and
52 FUELING OUR FUTURE:
   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA                          PUBLIC POLICY FORUM

vision in the use of innovative technologies in the energy sector. Dr. Sharpe has more than 15
years’ experience in the energy industry and, over the course of her multifaceted career, has
successfully integrated sustainable development into business practices. She built an international
business in the areas of energy efficiency and the environment while serving as Vice President of
Ontario Hydro International. Prior to this, she was responsible for leading-edge marketing,
business development and technology innovation in the industrial sector, serving in various
management positions at Ontario Hydro.

A recipient of the inaugural National Energy Conservation Association's Energy Efficiency
Award for outstanding contributions to the energy industry, Dr. Sharpe has served as an
international advisor on sustainability issues and represented the Canadian energy sector at the
Asia-Pacific Economic Cooperation (APEC) Business Forum. Dr. Sharpe has chaired several
boards including the National Advisory Board on Energy, Science and Technology, and the
Board of Directors of Clean Air Canada Inc. She co-chaired the City of Toronto's Sustainability
Roundtable.

Dr. Sharpe holds a B.Sc. Honours in Applied Biology (Co-op Program) from Bath University,
U.K. She earned her Ph.D. in Microbiology and Chemistry from Trent University, U.K. where
she spent five years as a doctoral researcher and lecturer.

The Honourable Ruben John Efford
Minister of Natural Resource, Government of Canada

John Efford was elected to the House of Commons in a by-election in May 2002 and was re-
elected in 2004. In 2003, he was named Minister of Natural Resources. He has served as a
member of the standing committees on Canadian Heritage and on Fisheries and Oceans. He has
also served on the standing committees on Human Resources Development and the Status of
Persons with Disabilities and on Aboriginal Affairs, Northern Development and Natural
Resources.

From 1985 to 2000, he served as a Member of the Newfoundland and Labrador House of
Legislative Assembly. He was Opposition critic for consumer affairs, public works, fisheries,
health and social services. He later served as minister of social services, minister of works,
services    and    transportation,   and    minister    of    fisheries    and     aquaculture.

After completing a business administration program, Mr. Efford established and ran Efford’s
Wholesale, Snow's Plumbing Ltd. and the Della Lee retail clothing store. Mr. Efford and his
wife, Madonna, have three children and two grandchildren.

F. Michael Cleland
President & CEO, Canadian Gas Association

Michael Cleland is President and Chief Executive Officer of the Canadian Gas Association.

Before joining CGA he was Senior Vice President Government Affairs for the Canadian
Electricity Association. Prior to joining CEA in 2000 he was Assistant Deputy Minister (ADM),
Energy Sector in the Department of Natural Resources Canada (NRCan), formerly Energy, Mines
and Resources (EMR) and before that, Director General of the Energy Policy Branch. From
1987 to January 1990, he was Assistant Director, Resource Policy Division in the Department of
Finance.
                                                                     FUELING OUR FUTURE:          53
PUBLIC POLICY FORUM                     STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA



Before joining the federal government in 1987, Mr. Cleland worked in Nova Scotia where, he
was a principal in the firm of Cleland, Dunsmuir Consulting Ltd., lecturer in business /
government relations at the school of Public Administration at Dalhousie University and
academic editor of Plan Canada, the journal of the Canadian Institute of Planners. From 1982 to
1985, he was Associate Director of the Centre for Development Projects at Dalhousie University
where he was responsible for various management training projects in Zimbabwe and the
countries of the Commonwealth Caribbean. Prior to joining Dalhousie University, he occupied a
number of positions at the Nova Scotia Departments of Development and Municipal Affairs.

Mr. Cleland was born in Quesnel, British Columbia, and educated at the University of British
Columbia (BA in political science 1972) and Queens (MPL urban and regional planning 1974).


Mark Jaccard
Professor, School of Resource and Environmental Management, Simon Fraser University

Dr. Jaccard is an economist focusing on sustainable energy systems. He leads the energy and
materials research group (EMRG) in REM (6 full-time associates and 8-10 graduate students) in
developing and applying models that assess policies to induce technological change. Recent
applied work involves costing GHG emission reduction policies for government, industry and
NGOs. Current research includes: macro-economic feedbacks of energy-environment policies,
discrete choice modelling of consumer behaviour, and modeling the relationship between
different policies and experience cost curves for environmentally desired technologies.

Dr. Jaccard is responsible for the Canadian Industrial Energy Efficiency Data and Analysis
Centre, funded by the Canadian government and other agencies. The centre is directed by Dr.
John Nyboer, who collaborates in research, supervision and advisory work. Dr. Jaccard has
chaired the B.C. Utilities Commission (92-97) and served on the Intergovernmental Panel on
Climate Change (Second Assessment Report). For the past 8 years he has been one of six
international energy experts on the China Council for International Cooperation on Environment
and Development. Dr. Jaccard teaches Ecological Economics, Energy and Materials Management
and Policy and Energy and Materials Systems Modelling.
                                                                   FUELING OUR FUTURE:       53
PUBLIC POLICY FORUM                   STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

ANNEX 4 - NOTES FOR AN ADDRESS BY THE HONOURABLE DWIGHT DUNCAN, MINISTER
OF ENERGY, GOVERNMENT OF ONTARIO




                                     Remarks by


                        The Honourable Dwight Duncan


                             Ontario Minister of Energy




                                        To the


                        Public Policy Forum on Energy




                            Delta Hotel and Suites, Ottawa

                            Monday, November 29, 2004




   Check against delivery




                                                                                         2
Good evening, ladies and gentlemen,
Mesdames et Messieurs, and thank you Premier Handley for those insightful
remarks. It's a great pleasure for me to be here among such distinguished and
well-informed company. I bring you greetings and best wishes tonight from
Ontario's Premier, Dalton McGuinty, and from the Government of Ontario.

Je souhaite aussi exprimer ma gratitude aux organisateurs du Forum des
politiques publiques et les remercier d'avoir organisé cette rencontre importante.
I think as policy experts and leaders we all agree that we've arrived at a crucial
crossroads when it comes to energy issues in Canada.

The choices we make today will have a tremendous impact on our way of
life......on our environment, our health, our economy, and our growth as a nation -
for many decades to come.

So I think this forum has been very appropriately titled "Fuelling our Future",
because when we talk about energy, we really are talking about our future. And
when we talk about our future, we're really talking about the opportunities that lie
in front of us.

And, we're blessed with so many opportunities, because our birthright includes an
enviable share of the planet's resources. Resources, like Niagara Falls ... and
Alberta's oilsands.... that have powered our country's prosperity and growth over
the past hundred years. Because of these gifts, a fundamental assumption in most
of our country has been that plentiful, affordable energy would always be
available. And perhaps we've been lax in the way we've come to use energy
because we always thought it would be there. But today, like many other people
around the world, we're being forced to re-think our values and assumptions about
energy.

Oil is at record prices, natural gas is in short supply, and our population is steadily
growing every day. In Ontario, we face a particular challenge when it comes to
electricity to meet the growing demand we will face over the next two decades...
Le Québec fait face à un probleme à moyen terme grave qui, à plusieurs égards,
est même plus délicat que celui de l'Ontario. Alberta is facing the challenge of
needing vast quantities of electricity to fully exploit the resources locked in the
oilsands. Et tandis que l'Ontario, le Québec, l'Alberta et d'autres provinces du
Canada s'attachent à relever leurs défis respectifs, je suis là ce soir parce que je
crois qu'il y a une opportunité encore plus grande à saisir. An opportunity to
work together as a nation to fuel our energy future...




                                                                                          9
To enhance our national energy security, and become more self-sufficient....

To share our resources, and help each other meet our respective supply
challenges....

And to keep the lights on in a way that will enhance the quality of life for the
future generation of Canadians.

The good news as we contemplate electricity supply challenges in Canada is that
there's a lot of clean, untapped hydroelectric potential in our country to help us
meet our long-term needs. Le Manitoba et le Québec pourraient chacun produire
des milliers de mégawatts d'électricitée supplémentaires de source hydroélectrique
si l'infrastructure adéquate était mise en place. There is also a very sizeable
hydroelectric opportunity that the government of Newfoundland and Labrador has
been contemplating. And even here in Ontario, our Northern rivers and streams
hold the potential for three to five thousand megawatts of electricity, according to
studies dating back almost thirty years. With this in mind it's natural to ask
ourselves why Canada isn't swimming in excess electricity capacity, instead of
facing significant supply challenges...

And why we don't build to our hydroelectric potential, instead of burning coal and
natural gas to produce a sizeable part of our electricity.... In most cases, the
answer lies in transmission issues, and simple economics. It costs approximately
a million and a half dollars for every kilometre of high voltage line necessary to
carry the massive power flows that come out of large hydroelectric facilities. And
the remote locations of many of the remaining opportunities mean that the
economic challenges are very real. However, another part of the answer lies in
the fact that Canada has never pursued a coordinated national electricity strategy.
We have never stepped back as a country to contemplate solutions, because of
other more pressing priorities....

In the nineteenth century, our country was focused on building a rail network that
would unite Canadian communities scattered across a vast land. I n the postwar
era, the focus was on implementing a national highway system, and on building
the great St. Lawrence Seaway in the East. And in the 1960s, attention turned to
implementing important national social programs such as Medicare, and Canadian
pension and insurance programs. All of these initiatives are part of Canada's
legacy - because they make us who we are today. And today, I believe, we have a
huge opportunity to extend that legacy to the way we treat electricity.

Construire un nouveau genre d'autoroute capable de transporter de l'électricité
propre d'une province a l'autre, pour alimenter la croissance future du Canada. To




                                                                                       9
achieve our hydroelectric potential in a way that allows us to move away from a
carbon based economy. And to put in place sustainable and lasting solutions that
would benefit Canadians for future generations to come. A national approach to
electricity issues would enhance our energy security, help clean up our
environment, stimulate economic development in our North, and provide a
renewable, reliable and affordable supply of electricity for all Canadians, for
generations to come.

Let's look at security in the context of last year's blackout. The blackout didn't
originate in Canada, nor did we contribute to its spread. In fact, we are leaders
when it comes to strict, mandatory reliability standards, which I believe should be
in place and enforced all across North America. The blackout originated in Ohio,
largely because some trees weren't properly maintained in that State's
transmission corridor. And because of our interconnections with the United
States, Ontario inherited the problem.

In fact, if you look at a map of most of Canada's transmission infrastructure, a
large portion of our wires run from North to South. While there are economic
benefits associated with these ties to the United States, the lack of mandatory
reliability standards in the US is extremely worrisome. And attempts to
implement reliability standards in a recent US energy bill were stalled, and seem
to be going nowhere. This is especially worrisome considering estimates that the
blackout cost Ontario billions of dollars in lost economic performance.

Beyond security issues, we must be more concerned about our environment. We
simply cannot afford to continue to rely on dirty coal fired generation.....not when
childhood asthma is a growing epidemic...... and not when we're experiencing
ever increasing smog days in our parks. Getting our own house in order will not
be enough to fully address our air quality issues. And this keeps our focus on our
neighbours to the south.

Currently there are approximately 440 coal-fired plants in the US, and all
forecasts presume that this number will only grow. This is a major challenge for
Canada, and particularly for Southern Ontario's air shed, which receives 50% of
its air quality problem from the Ohio Valley. Our hope is to work with our
American neighbours to reduce the emissions associated with coal-fired
electricity. Let's not forget that Canada partnered with many US groups and
governments in the 1980s to successfully fight the scourge of acid rain that was
destroying the natural habitats of our lakes and rivers.
Before we can engage the Americans, we must get our own house in order, just
like we did with acid rain. Eectricity production in the US is currently more than
50 per cent coal and growing, while Canada's is more than 50 per cent water.




                                                                                       9
And as I said earlier, there are incredible opportunities to expand our
hydroelectric potential. So why, then, can't we imagine a Canada where the
majority of our transmission infrastructure runs from East to West... Why
shouldn't we imagine a Canada where we reduce our dependence on fossil fuels,
while increasing our energy security and self sufficiency... And why shouldn't we
imagine a Canada where we're able to share more clean, affordable energy from
our bountiful resources with each other ... And while it's true that electricity is an
area of provincial jurisdiction, it's also true that potential new transmission
corridors would pass near or through First Nations lands, which are a federal
responsibility of the highest order.

The opportunities for expansion in the north would also help to unlock vast new
areas of economic development, which is something that would certainly be of
national benefit. In Ontario, we've already taken the lead on the concept of an
"East-West" grid by initiating discussions with Manitoba and Quebec about
reinforcing and expanding our interconnections with each other. Through these
interconnections, we estimate we would be able to tap into as much as 3,000
megawatts of additional power when it's needed. We are actively studying a
proposed hydroelectric power project in Northern Manitoba, and a transmission
line that would bring clean hydroelectric power to our province. The project
represents a sustainable power supply arrangement known as the Clean Energy
Transfer Initiative. Clean energy from Manitoba has the potential to provide
Ontarians with 1,500 megawatts of hydroelectric power, which would fuel over
one million homes, and go a long way in helping us solve some of our long-term
supply issues. The $5.5 billion dollar project would also create tremendous
employment and economic opportunities in Ontario and Manitoba - particularly in
northern and First Nations communities where economic development is needed
most. And the project would contribute in a significant way to meeting Canada's
national climate change targets - by helping to displace fossil fuel generation and
reducing greenhouse gas emissions.

Imaginez donc les avantages que nous pourrions retirer et ce qui se produirait si
nous pouvions étendre de tels projets à l'ensemble de notre grand pays. Certainly,
we see the proposed power link between Manitoba and Ontario as what has the
potential to become a first step in building a new national electricity grid. And
we also look forward to participating in the federal government's strategy to
expand Canada's supply of renewable energy, and to become a leader in
alternative sources of energy.

In fact, we were proud last week to announce 10 new renewable energy projects -
projects that will increase Canada's wind capacity by a staggering 80%. And




                                                                                         9
while much attention has been recently focused on the promise of wind power,
and other alternative power sources, we shouldn't lose sight of the fact that
Canada is already a leader in renewable power through our hydroelectric
resources. Working together, I can certainly glimpse a future where
hydroelectricity, wind, biomass and other renewable resources make up the vast
majority of all of Canada's electricity sources.

Ontario intends to be the world leader in this regard.

And why shouldn't that future allow us to work with our neighbours to the south
to help them meet their electricity supply challenges and reduce their reliance on
fossil generation. Of course, when we're talking about interconnections with
other provinces, and expansion of our hydroelectric resources, we're talking about
very long-term solutions to the challenges that face us.

And you'll notice, I've used the word "imagine" a number of times throughout the
course of my remarks this evening... But I believe we need to begin somewhere,
and that begins with dialogue like the one here tonight, and with a little bit of
imagination.

So thank you for coming to this conference, to begin to contemplate more
national solutions to the challenges that face us.

Je me réjouis de poursuivre ma collaboration avec les autres provinces et avec le
gouvernement fédéral dans la réalisation de nos stratégies énergétiques
respectives. Et je me réjouis aussi d'élaborer une strategie nationale commune qui
apporte des avantages à tous les Canadiens et Canadiennes.

Thank you.




                                                                                     9
                                                                                  FUELING OUR FUTURE:                   59
 PUBLIC POLICY FORUM                                 STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA

 ANNEX 5 – PRESENTATION NOTES – DR. ROBERT SKINNER, OXFORD INSTITUTE OF
 ENERGY STUDIES                                                 STUDIES
                                         Notes for Public Policy Forum:
                  "Fueling our Future - to define a national strategy for energy in Canada"

                                    November 29th, 2004, Ottawa, Canada.


                                        “The International Setting"
                                       "The International Setting”

                        Robert Skinner, Director, Oxford Institute for Energy Studies




Introduction.

I am delighted and honored to be here. It is a compound challenge to present the international setting as a
backdrop to discussions whose very ambitious aim is to define a national strategy for energy in Canada.

Of all the national energy strategy discussions in Canada that I can remember, this must be the first driven from
outside government, and by groups right across the energy supply/demand spectrum. This deserves applause: it also
speaks volumes.

Let me begin by recounting how and when I met Jodi White; its relevance will become evident. It was in, of all
places, Saudi Arabia, on April 5th, 1986.

Over the previous year, in the face of expanding Non-OPEC production and falling world oil demand, Saudi Arabia
had cut back its production from over 10 mmb/d to 3, to try to defend prices; then it refused to continue as swing
supplier, and went instead for market share by changing to a netback pricing formulae. The world oil prices collapsed
from $27 to $9.

The then Foreign Minister, the Honorable Joe Clark was in Rome, headed for the Middle East: Jodi was his Chief of
Staff. He was scheduled to meet with Saudi Oil Minister, Sheikh Zaki Yamani in Dhahran and thought someone
from the Energy department should be there.

When our embassy's driver delivered me to the guest palace to await the delegation's arrival, its front ramp was
bristling with red berets and machine guns; frightened, he urged me out of the car, and sped off. A lapse in
communication left me to fend for myself. I got past about 6 guards before I was grabbed, taken inside and
shaken down. Eventually someone figured out I was on the Canadian delegation.

The excessive security was not for the Canadians. It was for U.S. Vice President George Bush Sr. and his
entourage. He was emerging from the famous meeting in which he asked the Saudis to cut back on production.
Mr. Bush Sr. was feeling the heat of the angry American oil lobby, whose production had
                                                             2


dropped by 1 mmb/d; tens of thousands of American oil workers had been laid off. He explained himself by
offering that "low oil prices are a two-edged sword", nicely summing up the difficulty the ReaganBush
Administration then faced in trying to deny what President Franklin D. Roosevelt once grumbled; "The
trouble with this country is that you can't win an election without the oil block, and you can't govern with
it."

The price of oil doubled over the next seven months. OPEC was left holding 11 million b/d of spare
capacity, and this was the starting point for a very long voyage in energy policy that has landed us with many
of the problems we face today.




In the time available to me I will examine the international context for energy policy and its strategic challenges by
looking at two structural themes that have left a legacy in the energy sector that we now must deal with. I will review
the recent developments in the oil market as symptoms of the legacy.

Against this background, I will review the main elements and trends dominating global energy supply and demand and
the issues they present, and will focus on a couple specific areas of concern confronting North America. Hopefully this
will provide a basis for discussion.
                                                           3

The 1986 oil price crash created an environment into which two major interrelated themes were let loose, with major
effect on energy over the eighties and nineties: these were industry consolidation and regulatory reform.

Both themes affected the primary energy supply industries, just as they affected telecoms, transport, banking and
other industries. To understand the challenge from a public policy perspective, it helps to look at the energy sector in
terms of both primary energy supply and final consumption.




It is the grid-based industries that have been the target of government's market reform policies. The oil market
reformed itself in 1986 with the collapse of the OPEC Reference Price and the eventual shift to market related prices.
The oil and grid-based energy industries represent two different domains or styles of energy: oil is mostly about
mobility, and electricity and gas-the grid-based sectors-bring us a different set of energy services. These two domains
have very different relationships with governments and regulators, and with consumers, investors and financers and
they confront quite different tensions in terms of fuel competition and substitution. The nature of their trade differs
fundamentally: oil is global and fungible; buyer and seller are not co-dependent. Gas and electricity are regional
or local, their pipes and wires lock in co-dependence. Therefore how we think about their security of supply must
differ. Just reflect on the one issue that is increasingly preoccupying these two energy domains: spare capacity, and
contemplate the policy tools governments have or don't have to fix it, or more precisely, to create the investment
environment that will see it fixed.

Oil and its pricing are central considerations when looking at world energy supply and demand. So, it is worth
while to examine just how we got to $55 oil?
                                                            4




We are told that this is a 'Demand-Driven Price crisis' that caught everyone off guard. While we perhaps should
have been surprised by the magnitude of the price change, which has been partly driven by events, we should not have
been surprised by its direction. The early signs of an Asian-led demand surge were apparent for more than a decade before
the Asian Crisis in 1997. The region's demand growth averaged 770 mb/d per year since 1986, accounting for most of
the annual growth in world demand. In fact, given the total world demand in the early nineties-some 14 million b/d less
than today-one could say the Asian/Pacific market expansion was far more important to world oil markets back then
than post-2000. But this last year has been different. The region's oil demand increased by 1.3 mmb/d.

On top of this we had exceptional demand growth in North America of 700 mb/d.. Overall global demand increased
by 2.7 mmb/d. Regionally or globally, we have not experienced increments like these since 1976.

This reflects the step jump in the world's GDP, which according to the IMF grew nearly 5% over the last year, the
greatest for the last 20 years, pulled by the North American and Chinese locomotives.

In very simple terms, America's consumption-driven economy is in part pulling China's production-based economy.
But China is also a major consumer of commodities, which it transforms and partly exports. It is now the
second largest oil consumer after the U.S., importing nearly 3 million b/d mostly for petrochemicals and for
diesel to generate power and, because of the shortage of rolling stock and rails, to truck coal to power stations

The fact that Wal-Mart bought $15 billion worth of merchandise from China last year prompts the following cartoon
image of what is driving the world oil market: `if a boat carrying any convertible commodity floats out onto the
Pacific ocean, it gets sucked into a Chinese port, offloaded and, with services and equipment imported from
neighbouring Asian countries, converted into stuff that is exported to America where it is shuffled about the
continent on trains and trucks to Big Box stores where consumers go 24/7 in their SUVs to buy it'.

Is this a sustainable condition? Americans are consuming as ever and not saving, having received a boost from generous
election year monetary and fiscal policy tonics-some believe this `wealth effect' driven consumption is illusory and
cannot last. This is its first recovery in history without a corresponding growth in jobs.

As for China's consumption, the case for collapse is not easy to make; but nor can we count on double digit growth
forever.

So, yes, demand growth has been important.
                                                            5


But the confluence of other factors has been very important in driving oil prices. I will mention four:
information, spare capacity and political events, and Non-OPEC Supply.

At the risk of oversimplifying an arcane subject, the price of oil is largely determined by expectations about what
might happen to supply and demand and how events might influence this balance.

Every day, thousands of pieces of information and misinformation are interpreted or misinterpreted by thousands
of players. Important sources of market information are the weekly DOE/EIA and API reports and the
monthly IEA and OPEC oil market reports. These have become the respected references. Each month when the
LEA's Oil Market Report is published, banks, investment houses, research agencies and consultancies react and
send out to their client networks their interpretation of the LEA's data and its forward analysis and estimates. The
OPEC secretariat in turn supplements and adjusts its own view of how much oil the market will need but,
perversely, does so based on information from secondary sources-not its own members. OPEC's announcements of
quota are powerful signals in the market. They reflect the volumes OPEC thinks the market needs, while
hopefully yielding a price that meets their members' budgetary requirements.




The LEA's OMR is a critical market reference. Each year with its July issue the Agency begins projecting oil supply
and demand for the next year. For the last two years, its projections have turned out to leave a very large gap of 3.6
to 4 million b/d between originally expected and eventual actual world oil demand and Non-OPEC production. Above
all they underestimated demand in China. The combined effect is like finding out that Iran-the 3`d largest
producer in the world-closed up shop. This signalled to OPEC that new capacity was not needed; to oil buyers,
that it would be imprudent to build inventories. The misreading of the meaning of inventories compounds the
complexity. The role of non-commercial traders-hedge funds-and how OPEC must respond to their positions is
another factor, but not the only as some politicians have claimed. So, information is critical.
The second factor was spare capacity. Since 1986, spare OPEC capacity has been gradually whittled down from
nearly 11 million b/d to around 3. With the genius of timing that only politicians can muster, the U.S.- led military
coalition invaded Iraq just when inventories were at a near-record low. To top it off, production had been seriously
lost in Nigeria and Venezuela owing to domestic political upheavals. As Winston Churchill advised, "However
beautiful the strategy, you should occasionally look at the results."

By August, OPEC's effective spare capacity was virtually eliminated. With spare capacity so thin, even the
smallest upset in oil supply and political events had disproportionate impacts on the psychology of the market. To list
a few: threats from Russian authorities against Yukos; strikes in the Norwegian oil sector (when the market was
clamoring for its light sweet crude); hurricanes in the Gulf of Mexico, and despite hints from the lEA that `help could be
on the way' from Strategic Stocks, Vice President Cheney reminded us that the IEA was `scabbard rattling'-the
Strategic Petroleum Reserve saber was not in Paris but in Washington, where it would remain on a shelf.
An important factor was weak Non-OPEC production outside the Former Soviet Union: had Russian production
not come back from its mid-nineties slump, we probably would have had this price squeeze earlier, simply
because the rest of Non-OPEC failed to add sufficient productive capacity to meet the growth in demand.




The private oil industry, at the global level, has not been replacing capital and reserves. In the late eighties and
through the nineties, faced with lower prices and fewer opportunities to invest capital profitably, the new
management culture focused on ROCS. Value for shareholders was not to be found in exploration but rather in
going for scale and squeezing the synergies from mergers and acquisitions. This metric of
                                                               7


performance for an industry that is fundamentally built on large, long term fixed capital investments was bound
to leave supply wanting at some point, and now it has. I hasten to add, however, that since 2000, investment
has increased dramatically and is now projected to be nearly $140 billion for 2005-but the results of this
investment will not be felt right away.




Just a few words about regulatory reform, the theme affecting investment in grid-based energy supply, in particular
electricity: the mid-eighties saw the launch of the great micro-economic policy project, market reform.
Governments, for many reasons, including to get utilities off the public borrowing ticket, privatized and liberalized
gas and power. After all, like transport and telecoms, they are merely input industries; if competition could drive
their costs down, some of the resulting savings would be passed on to their wholesale customers, who would retain or
hopefully add jobs as they faced increasing competition in global markets. And the newly liberalized and
commercialized power generators would be free to invest in non-OECD countries where investment was needed.

That was the theory. The fuel surpluses created by the pre-'85 run-up in prices and by state-owned and protected
utilities' over-building, offered a great political opportunity. Introducing competition to industries with surplus
supply pretty well guaranteed lower prices. The natural gas bubble in North America was just one example;
currently the European power sector is working off its excess generating capacity. But, these surpluses were not an
aberration of reform and liberalization, but a legacy of previous regulation and state intervention. And as with oil
capacity, surpluses don't last forever.

One of the greatest misnomers in public policy making is the word, `deregulation' to characterize this reform.
Not only was it incorrect but it also dangerously misled governments and publics. Firms have always made, and
always will make, their investment decisions within a framework of rules and laws determined by governmental
institutions. Policy makers underestimated the creativity of competitive markets and therefore, in what might sound
like a contradiction of the spirit of reform-but only if you call it 'deregulation'-the need to fine-tune it and institute the
rules necessary to keep it working.

The record of power sector reform has not been stellar.

                •    Start-and-stop and incomplete reform;
                •    misapplication of the OECD model to developing countries;
                •    poor follow-on macro-economic policies; and
                •    reform simply for reform's sake,


have left a trail of disasters around the world, in developed and developing countries alike. These failures now
merely serve as convenient excuses to hesitate in jurisdictions where reform is needed.
                                                            8


The overall effect has been increased uncertainty and risk. Both theory and empirical evidence confirm that policy
uncertainty can result in stalled investment; reduced investment in turn has led to fragility, price volatility and, in
the case of achieving environmental goals, perverse outcomes.
I now want to turn to global energy supply and demand.

The World Energy Outlook




Fossil Fuels currently meet 80% of the world's primary energy supply. According to the LEA's recent World
Energy Outlook, in the absence of major changes in policies governing how we produce, transport and use energy,
between now and 2030:

    1) This share of fossil fuels could even grow as 85% of the growth in primary energy supply will be met
        by fossil fuels;
   2) Two thirds of the increase in global energy demand will come from developing countries. Nearly four fifths of
        their energy growth will be met by fossil fuels. The Transition economies will look to fossil fuels to meet
        94% of their growth in primary energy.
   3) Energy resources are not where they are consumed. The share of energy that is traded will rapidly expand; The
        IEA worries that as resources in OECD, China and India decline, more and more of the fuels we consume will
        come from areas of the world perceived as unstable.
   4) This longer-term concern is overlain by the increased risk of short-term disruptions in traded oil and LNG
        because they must pass through several key chokepoints potentially vulnerable to accident, extreme
        weather events or terrorist action. For the IEA and many governments, the prospect of so much traded
        energy resurrects old energy security concerns, dormant in public policy for many years. How governments
        might deal with this is creating uncertainty: they will surely ignore the empirical evidence that the causes
        of most supply disruptions are domestic, not foreign.
   5) Russia and the Middle East will dominate incremental oil and gas supply, while the United States, China and
        India will determine growth in demand. The geopolitics of the Middle East are central to the
        international energy debate. Paradoxically, the region's stability depends on the evolution of macro-
        economic and political developments in the United States, Russia and China. Therefore, while the
        Middle East and the Arab world justifiably resist external pressures to reform, its future depends on
        developments outside; its prospects for political reform fundamentally depend on its scope for economic
        diversification and structural reform, of necessity built on and from their dependence on oil and gas
        revenue.
    6) This energy future poses huge challenges for reducing global greenhouse gas emissions, especially within the
        framework of existing international instruments and national response measures
                                                            9


          (energy related C02 emissions will grow faster than energy use, and will be 60% higher in 2030 than they
          are now);
     7) This challenge must be faced along with another; namely, that nearly 1.5 billion people will still be
          without access to electricity by 2030.
     8) Developing energy supply will require massive investments. While the resources and money to develop
          them may be available, issues of risk and access to resources will retard or prevent investment-a
          condition common to many commodities.

I would like to make a few comments on some specific challenges we face.

Fossil Fuels' continued dominance of primary energy supply is a theme that has not changed for as long as I can
remember seeing energy projections. In fact, the recent World Energy Outlook by the IEA provides a sobering
reminder. China's energy demand for 2010 is now projected to be 25% higher than the Agency projected just two
years ago, when it assumed China's GDP would grow at what turned out to be nearly half of what it actually did. Its
CO2 emissions are now expected to be nearly 6% higher in 2010 than projected two years ago, almost entirely due
to coal's growth now expected to be 10% higher. This revision in emissions is nearly two times Canada's reduction
commitment under the Kyoto Protocol.

Last year, World primary energy demand grew by 2.9%. Coal's growth at nearly 6% vastly outstripped that of
any other conventional fuel, twice as fast as projected by the IEA. Coal is this century's fastest growing fuel by a
mile. Meanwhile, the non carbon-based conventional sources of energy-nuclear and hydro, declined and stood still
respectively.

The installation of wind generating capacity is happening at a truly impressive rate. The industry has now matured. 2
MW units, are routine. And larger units are under development. But even with installed wind capacity growing at
15% per year, the global growth in power output from new wind plants last year was matched by the growth of
output from new coal-fired plants in just 25 days.




Between 1973 through more than two decades of higher prices, fuel switching and efficiency gains up to when
the UNFCCC was launched in 1995, Europe reduced its C02 emissions by a little less than 3%. It achieved this by
primarily riding on reductions in France-due to nuclear build; in the UK-due to the double dash for gas (residential
then power generation); and in Germany-due to re-unification and economic restructuring. Since 1995, EU emissions
have increased by 11 %. Canada's emissions, I am told are now 25% above 1990 levels.

We can't just simply wish all these numbers and facts away.
                                                            10
Moreover, when we go from the broad trends of the world energy picture, and drill down into specific fuels and
regions, we encounter some ominous developments that policy makers need to confront. On the one hand, they
see rising and increasingly volatile fuel prices. On the other hand, they see missed C02 targets. The former help
to attack the latter, but the price mechanism is almost universally rejected by politicians.

Oil: I mentioned the tightness of OPEC spare capacity; but capacity is tight throughout the oil supply chain, from
production through transport through to refining. It also extends to drilling rigs & crews and most critically to a
skilled workforce. Investment all along the oil supply chain is required; nowhere is this more apparent than in
North American refining.

No matter who or which organization examines the challenges facing the oil sector, they land on the need to catch
up on investment, the need for access to resources and the need to develop and deploy new and cleaner technologies.
Just because the Chairman of EXXON/Mobil says the same thing, neither destroys its validity nor the credibility of
those who share the view. It is not a feeling; it is not some conspiracy; it is a fact.

Natural Gas: The received view is that natural gas is all upside; lots of resource and reserves, spread around the
world, technologies maturing, and investment underway. Most projections expect that 60% of the growth in
global gas demand will go into power generation.

Regionally, the Asia-Pacific gas business has been built on LNG; but demand in its traditional markets is not
growing and new high potential markets are starting from a very small base and face structural problems.

Europe is surrounded by gas, the UK is about to become a net importer, yet in the face of disconcerting political
developments in Russia, European and British politicians are fretting about security of gas supply and their looming
double dependence: importing gas to generate a growing share of electricity, largely an artefact of policies that
rule out other fuels Europe could actually worry itself into a Qas bubble.

Here in North America, we have a real problem with gas. Comparing today with 1990, with




gas prices more than three times as high, twice as many rigs drilling twice as many wells that are up to 20%
deeper, the amount of recoverable gas found per well has dropped by one third or more, and while initial well
production is higher, the decline rate in the first year has increased by 50 to 100%. Today the US gas industry
has to add 50% more productivity than it did in 1990 just to keep production flat.

In the Western Canada Sedimentary Basin, one of the largest contributors to North American supply, the
situation is even worse. For the first time in its history, gas production fell in 2002. In 1990, 3,000 wells found
1.7 Bcf/well. In 2002, three times as many wells found only 1/6`s as much gas per well.
                                                           It




Since the late eighties the US has been increasingly relying on Canada to help meet U.S. gas requirements. One of the
starkest changes in an energy outlook that I have ever seen is that of the DOE/EIA between its 2004 to 2003 for US gas
imports-LNG and Canada virtually switched places in import prominence in the DOE's expectations.
North America faces a challenge. LNG can help, but site approvals for new terminals are not a given. North
America is the only major gas market where public policy favors it over other conventional fuels, where undeveloped
gas resources exist (in Canada, the U.S. and Mexico), where gas is in tight supply, yet public policy or the lack of it
prevents access both to resources and to markets. The outlook is that most future gas on the continent will come
from shales, tight sands and coal beds-so-called unconventional gas. This strategy is not without its environmental and
technical problems.

Unconventional Oil: more and more unconventional liquids will appear on the scene and Canada's oil business will be
based on the oil sands. The synthetic and blended products of oil sands compound the already serious capacity
constraint in refining, especially in North America. Also, oil sands production adds to the strain on gas supplies.
The emphasis on unconventional oil and gas in the portfolios of the major oil companies is in many ways a reflection
of access restrictions they face in replacing reserves elsewhere. More and more they are chasing `difficult
hydrocarbons'-oil sands, ultra heavy crude, LNG, Fischer-Tropsch based liquids, ultra-deep offshore and
politically difficult hydrocarbons in places like the FSU. In 2003 70% of the IOC's discoveries were in water
depths greater than 200 meters; 65% in water > 1000 meters.

Nuclear: For the sake of discussion, I do not believe that we can hope to come anywhere close to achieving
greenhouse gas reduction goals with nuclear ruled out as an option. It can't be ignored. The Blair government is
very carefully keeping the option open. Yet I do not see how nuclear can move forward within the current
industrial and financial structure and given the public's perception of nuclear.

Faced with the world energy trends presented here, what are we to conclude in terms of public policy? Certainly
continued emphasis on energy efficiency makes sense. Most countries' climate change response measures rely
on improving energy efficiency. But what are they really achieving? Have we learned how to truly measure
efficiency gains and are we measuring actual net reductions in terms of associated C02 emissions? Certainly in
the UK residential sector, since 1970 the energy use per household has remained remarkably stable, despite
numerous energy efficiency programs.

Conclusion.

Last month I was invited to a reception at the Foreign and Commonwealth Office of Her Majesty's Government.
The Foreign Minister, Jack Straw, set out the UK's International Priorities for its Energy and
 Climate Strategy. The government recognizes that energy and climate change are linked to a range of other
 international issues and areas of foreign policy. They are therefore taking the battle internationally. One cannot
 but wonder if the UK has arrived at the same starting point as that of the US Senate on climate change; namely,
 that nothing short of a global approach will work.

Mr. Blair will join President George Bush in making international security a priority, but the British Prime
Minister sees its links going beyond national and energy security, a preoccupation of President Bush. For Mr.
Blair, climate change is an equal and linked priority, and we should expect him to make these central themes in
2005 as he hosts the G8 and holds the EU Presidency. Where George Bush campaigned this year on national
security, Tony Blair shall campaign next year on addressing climate change, and he will urge his fellow leaders to join
him in this different global battle.

To conclude, energy policy making in the current decade must reconcile and deal with the major legacies left by past
policies. A key policy goal has to be removal of barriers to investment. Energy supply is fundamentally based
on long term fixed capital investments that don't happen overnight. The disappearance of spare capacity along
energy supply chains is reflected in increased price volatility. Price volatility is a symptom, it is a signal like the
proverbial canary in the cage. My fear is that the political response time to price volatility will be far shorter than
industry's.




Henry Adams wrote that "Practical politics consists in avoiding the facts": Implicit in my remarks, if we are to
meet the energy challenges before us and reconcile them with equally important environmental imperatives, we must
face some facts. Therefore to Mr. Adams's aphorism I would add a necessary corollary: "fiduciary
performance of public service consists in ensuring politicians are at least aware of the facts."

But technical and economic facts are not the only ones. That large numbers among the public do not accept the
facts is also a fact. That, ladies and gentlemen, is the very essence of the public policy challenge in designing an
energy strategy for Canada.
                                                                  FUELING OUR FUTURE:
   PUBLIC POLICY FORUM               STRATEGIC ENERGY POLICY OPPORTUNITIES FOR CANADA   71
   ANNEX 6 – ADDRESS BY THE HONOURABLE JOHN EFFORD, MINISTER OF NATURAL
   RESOURCES, GOVERNMENT OF CANADA




                                Notes for a Speech by


                         The Honourable R. John Efford, PC, MP


                          Minister of Natural Resources Canada




                                        to the


                                 Public Policy Forum




                                   Ottawa, Ontario
                                 November 30, 2004




Check against delivery
      Good morning, everybody, and thank you for the opportunity to come once again and
speak to industry stakeholders from around Canada.

       I’m not too sure I’m in control of what I’m going to say this morning, because I had a
meeting earlier with some people from industry, then I went and just gave a speech to an
                           [
international policy forumsic], and I’m all excited because I’m going to have lunch with
President Bush today. So if I’m somewhat distracted, it’s for a lot of reasons.

       But seriously, thank you for the opportunity to come and to be part of these deliberations.
I guess I’m now almost at my first anniversary as Minister of Natural Resources, and it’s been a
year that’s been somewhat different from my normal career in politics in Newfoundland and
Labrador, to say the least. The first six months I spent trying to understand the department. And
when I walked into the department in the initial days, I said to my deputy and the staff of the
department, “I know absolutely nothing about this department so let’s start there,” and I thought
that was the best way to begin.

       Then the other thing that I had to do was to get around Canada and meet all of you people
and to understand exactly where you’re coming from and what roles you play in resource
development and understand Canada’s resources. Then we got caught up in an election and that
took up almost — well, I can say pretty well two months. And then after the election, it took
some time, and then I was re-appointed as Minister of Natural Resources. I was very honoured
and proud of that.

        So I’m looking forward — I guess the best way to say this, before I get into the context of
my speech — I’m looking forward to 2005 because we’ve undertaken some major challenges,
and I hear occasionally, as I heard this morning, that some of the files are not moving the way I
would like — certainly the way you would like. And if they’re not moving the way you would
like them to move, then my responsibility — because I’m not happy — then we have to get down
to brass tacks and make sure that some of these files get moved to the advantage of industry,
which is to the advantage of Canada, which makes us all united in developing this great country
of ours.

       Because we not only have the responsibility to develop the economy in a sustainable
manner but also the environment — and I haven’t heard anybody say yet to me in my tenure of
almost a year that nobody wants to play both of those roles — and I think we have to respect each
other’s positions.

       So government must respect businesses, the industry stakeholders, and industry must also
have respect for government and we can do that. But it can’t be done alone. Facing our
challenges — our energy challenges — cannot be done alone. So it has to be done with a team
approach, and we have to be on top of the files on a regular basis because we all know how the
system works.
                                           -2-

       So what I’d like to do this morning is give you my own thoughts on the challenges facing
Canada’s energy economy and what our energy policy can and must do to help us respond to
those challenges.

        Our policy approach should build on our abundance of energy sources of all types as well
as our potential. It should adapt to the changing environment in which this sector is operating,
and it depends on four well-established guiding principles, or pillars, that speak to who we are as
a nation and who we will be in the future, again by discussing our resources.

       I know you’re aware, certainly, of the importance of energy to Canada’s economy, but
there are certain facts that bear repeating — the numbers that certainly speak for themselves —
and today the numbers are real good.

       Energy represents 6.2 percent of our gross domestic product in 2002. It accounts for
nearly $50 billion of our exports, not to mention one fifth of all business investments. There
again, that message in itself must give you — lay out — a clear picture of where government
should be working with you to ensure that we control and continue to grow that economy, and
make things happen in a manner which is viable and to everybody’s advantage.

       This impressive economy have been achieved by developing our abundance of energy
resources, which is one of the world’s largest, representing both traditional and emerging
resources. Certainly thanks to the Alberta oil sands, our oil resources are second only to those of
Saudi Arabia. Our hydro power supplies 62 percent of Canada’s electricity production and we are
alone among the world’s most advanced economies in having significant underdeveloped hydro
potential.

        We are the world’s largest exporters of uranium and our coal reserves should last many
centuries. Certainly in the case of hydroelectricity, my part of the country — where I come from,
Newfoundland and Labrador — there is great potential, and I’m only hoping in the very near
future to collaborate with industry, the provincial and federal governments, that we can develop
that to the advantage of our energy security across the country, but also to the advantage of the
people in Newfoundland and Labrador.

       So it’s safe to say that Canada is at no risk of running out of energy. Indeed, investments
are already underway, such as oil sands development, that will make us a larger producer and
export more energy.

      Along with the successes in our energy sector, Canada’s fiscal framework has created a
competitive environment with low inflation, budget surpluses, a declining debt and the best
growth performance in the G7. In other words, the best macroeconomic climate in the world, not
to mention attractive research and development centres — something we all should be proud of.
                                             -3-


        In the midst of all this good news, however, we need to recognize that Canada’s energy
context is changing rapidly, bringing with it many opportunities and, certainly, many challenges.
Nowhere are these changes more significant than in prices. Factors such as tight markets and
world events have led to speculation and price hikes. The price of oil alone is now five times
higher than it was in 1998, and demand is also affecting the volatility of natural gas and
electricity prices.

       It is safe to say we won’t be seeing a return to the $10-a-barrel oil anytime soon. We
certainly hope not. High prices are part of the new reality we live with in this area.

      We are also faced with the challenge of maintaining a reliable supply of energy, and the
blackout of 2003 has made us very conscious of that challenge.

       I’d like to just stop for a second and say that’s one of the reasons why I’m invited to a
lunch today by the Prime Minister with the President of the United States. Because, as you know,
the United States is very apt [ sic] on energy security and the role which Canada plays, in
cooperation with the United States, is significant. So I’m expected to go and make a statement on
energy security today so I’ll be certainly able to do that with some... well, not some, with a great
deal of confidence.

        Here we are collaborating closely with the United States through the efforts of the
Canada–U.S. Power System Outage Task Force, and we are working on recommendations to
improve our shared electrical system. One of those recommendations is that we have to make the
electrical system reliability standards mandatory and enforceable, with appropriate regulatory
oversight. I’ll talk more about regulation in a moment, because certainly it’s a key issue for me.

        Another part of this changing context is the increased focus on the environment and
sustainable development. It’s become a preoccupation with most Canadians. How do we progress
economically while keeping that development environmentally friendly so that we can breathe
the air and leave a legacy of prosperity to our future generations? Fortunately, we are seeing real
progress both within industry and at the individual level.

        And I want to say to you, ladies and gentlemen, very clearly, since Minister Dion got
appointed to the environmental portfolio, in all my 20 years of political life and the many
different departments that I’ve worked in, I’ve never worked with an individual in which I’ve had
more confidence than Minister Dion. We work together on a daily basis, we dialogue together on
a daily basis, we attend meetings together with different industry stakeholders and both of us
have respect for each other’s departments, which is something refreshing, I guess, to you people.

       But as I tell you, it’s particularly refreshing to me because for myself, I need that type of
environment, that type of collaboration, that type of cooperation at the ministerial level in order
                                            -4-

to move both of our agendas forward. And I’m as much an environmentalist as the next
individual but I respect his responsibilities as Environment Minister. He also respects mine of
developing resources to the benefit of the economy in Canada forst the 21 century. And I think in
2005 — I don’t think, I know, I’m not going to use the word “think” — I know in 2005 you’re
going to see some major changes that are going to make everybody really confident in where we
are going in the future.

        Government, naturally, has a role to play. Climate change is an important issue and it’s
challenging to find solutions. But we remain committed to an effective policy, one that is focused
on making the right choices for Canadians. One of our climate change policies that affects many
here today is our approach to large final emitters, and we are working hard to develop a regime
that will result in real and credible reductions in emissions while ensuring — and this is key —
while ensuring that industry is not asked to achieve the impossible and at the expense of valuable
jobs.

         I hope we will be in a position to provide some positive developments on this issue in the
near future. And let me say to you we will. We will be coming forward with some positive
initiatives and we’ll be asking, as we have asked all along, for full cooperation. That’s how
Minister Dion and myself, how we want to work in a cooperative manner and move our files
forward.

        Now for the four pillars of our policy. As we look ahead, how should government, and in
particular the Government of Canada, respond to the changing energy environment? Our energy
policy, as I see it, should continue to be based on four solid pillars. First of all, our policy is
market-oriented. In my view, a free market is the most efficient, competitive and innovative way
to establish prices. It allows players like you to make investments and raise money, and it allows
that innovation and investment to lead to global success much more readily. While government
has a role in such a market, that role is not in controlling prices or supply directly.

      Second, our policy must always respect the jurisdiction of the provinces who actually
own the energy resources. Cooperation among our levels of government on energy matters is
now more important than ever.

       The third pillar of our energy policy is the legitimate role of government to smooth out
the rough edges of the market through regulation, in order to make the market work. Smart
regulation is my personal priority in government. Our system of regulation has served us well
over the years but our needs have changed, our challenges have changed, and so have the
expectations of Canadians.

       So we need to take steps to improve the system, modernize regulations to enhance the
conditions for an innovative economy. But let me stress that smart regulation does not mean
lowering our standards. It means finding a better way to meet our high standards of social and
                                            -5-

environmental protection along with streamlining. Smart regulation means we don’t have to pick
and choose between our economy and our environment.

        Again, earlier this morning in a meeting I had with some people in the industry, we talked
about regulation and this has been high on my agenda now since early on — just a few weeks
after I got into the Ministry — and I guess sitting back and being in business myself before my
political life, I recognize the importance of the regulatory process. I recognize the importance to
government, to the environment, but I recognize the importance to industry.

         And governments, we were lucky — I shouldn’t say lucky — we were fortunate that we
got it into the Throne Speech, so it is high on the government’s agenda. But I’m also hearing
from you people that it’s not moving where you want it to move. I guess there are so many files
that we need to be in control of and there are so many different departments involved in smart
regulation, I guess I can use an excuse of saying, “well, maybe it can’t move faster,” but I’m not
satisfied with that.

       So the message I wanted to leave with all of you here today is that I am not happy with
the process and how it’s moving, and that I’m going to play an even stronger role than I’ve
already played in it. I’ve already now asked for a meeting with the President of Treasury Board,
Minister Alcock, because he is the lead on this, because of the position he holds. But there are a
number of other ministries that are very heavily involved — Fisheries, Transport, Environment,
my department, Industry.

      We’ve got a committee formed so I’m going to highlight that at the next meeting of the
Cabinet committee, and we have to ensure that this process does not slow down in any manner
whatsoever. And Minister Dion and myself are very keyed into that responsibility.

       So as I said, let’s look forward to 2005 and let’s see where the difference is going to be
made, and I can give you my commitment that changes and improvements will be made. And
again we’ll need the cooperation of everybody to do that. And we certainly have to ensure that
the policy works in the best public interest because public interest touches every one of us.

       Our fourth pillar recognizes the need for focused interventions — in other words, for
governments to step in where the markets cannot or will not. Nowhere is it more important than
in research and development. We realize that knowledge and information are in effect public
goods. That is why, for example, the Government of Canada has committed more than
$3.7 billion to energy efficiency, renewable energy programs, clean energy R&D and other
climate change measures since the 1990s.

      And that, ladies and gentlemen, is the key. Research and development, investing in
science and technology, is the only way we will be able to get to where we want to be, not only as
a country but as a world leader.
                                             -6-

       Going forward, faced with these new energy realities, and within the framework of our
energy policy that reflects who and what we are, the way forward is very clear. With Canada’s
energy sector in a primary position in our economy, developing energy resources in a sustainable
way is paramount to ensuring security and prosperity.

       We have an abundance of energy resources that we will continue to develop. A good
example of these are Canada’s oil sands resources. All of us are aware that oil sands development
is energy-intensive and has environmental impacts. But we also recognize the economic
importance. Through technology development, we are searching for cleaner ways to capitalize on
our energy endowments.

        As a first step, we are going to ensure that the energy we use has less impact on our
environment. Shifting to cleaner energy, reducing the level of sulfur in gasoline and diesel fuel is
part of that plan, and that goal is just around the corner.

       We need to fulfill the promise of alternative fuels. Through contributions to a number of
ethanol plants, the Government of Canada intends to increase our production of ethanol by four
times within the next two years.
       We are also preparing the way for technologies like wind power, so that it can become
more economically viable. In theSpeech from the Throne just two months ago, the Government
of Canada committed to quadrupling the Wind Power Productive Initiative. That’s how much we
believe in this technology. And certainly if you’re from the province that I’m from —
Newfoundland and Labrador — you have no alternative but to believe in it because it blows
every single day. So we have to capitalize on the natural resources that we have there the best
way possible.

       Naturally, there’s also a role for all of us to play in developing hydrogen fuel cells for use
in vehicles and stationary power applications, along with biomass, earth energy, emission-free
nuclear energy and small hydro.

       As a second step, we are going to reduce energy use by promoting energy efficiency. As
the government committed to in the Speech from the Throne , where are the challenges and
opportunities of sustainability more evident than in the way in which we use and produce our
energy.

      We’re already making progress as a whole. Canada has improved its efficiency by
13 percent since 1990 and saved more than $11 billion in energy costs along the way. And as
Ken just mentioned, energy intensity is declining in nearly all sectors of the economy.

      Many of these efficiencies have come through policy decisions and investments by the
Government of Canada through incentives, voluntary programs, partnership initiatives, outreach,
and — yes, again — regulation. And we are working very closely with many provinces and
                                             -7-

territories, as well as with electricity and gas utilities across Canada, to accelerate the adoption of
energy-efficiency technologies and practices.

        For example, we are working with British Columbia and Quebec to support their efforts
to review building and housing energy codes. We’re also working with Climate Change Central
in Alberta and several gas utilities such as Terasen Gas, Heritage Gas, Enbridge and Union Gas
to accelerate the adoption of high-efficiency gas furnaces.

         Another excellent example of cooperation in this area is Hydro-Québec’s recent
announcement that it would invest more than $1 billion to support energy-efficiency measures in
Quebec over the next five years. Many of these measures will be delivered in partnership with the
Office of Energy Efficiency of my department. For example, Hydro-Québec has announced it
will triple the incentive presently provided by the Government of Canada for the energy retrofit
of houses through the EnerGuide for Houses Program.

       We certainly hope to improve upon these efficiencies with the cooperation of the
provinces and territories as well as the utility companies. The Council of Energy Ministers is
working with industry to close information gaps, remove barriers to energy efficiency and
demand-side management improvements. In short, to create a “conservation culture” across
Canada.

       Energy efficiency has made us more competitive and prosperous and it’s the key to a
more sustainable and efficient economy for the future. There is no doubt, however, that we will
continue to rely on conventional energy sources in the near future even as we shift to cleaner
energy and become more efficient with the energy we use. So our third step will be to increase
overall supply and reliability.

       That includes creating the climate for investment in new oil sands projects. In fact today,
as we’re talking, officials from my department are meeting with their U.S. counterparts in Tulsa
to discuss oil sands research and development and how oil sands can enhance our energy
security.

       We also need to facilitate an investment in hydro transmission, pursue oil and gas
exploration in new sites and develop a regulatory framework for liquified natural gas terminals.
These investments will help secure our own supply. In addition, they will help us remain
competitive and meet increased demands from the United States, as well as emerging economies
like China, India and Brazil.
                                            -8-


       Our fourth step — and the one that actually helps make the other steps possible — will be
developing the appropriate technologies. And this need is critical. The energy we use has brought
to us prosperity as well as a threat to that prosperity. Climate change is very clear on that agenda.
We will have to reduce the greenhouse gas emissions intensity of our economy by 90 percent
                      st
before the end of the 21 century. But the technology we need to accomplish this is still far away.

       The good news is that Canada has developed technology niches in which we are world
leaders. These niches are obvious choices for concentrating our efforts. They include hydrogen,
cellulosic ethanol, carbon dioxide sequestration — and the last one serves the double purpose of
enhancing oil recovery and mitigating climate change by storing greenhouse gas emissions.

       That, ladies and gentlemen, is both my commitment to you and my call to action to you.
Increase energy efficiency, use cleaner sources of energy, ensure a supply of reliable energy and
invest more in science and technology.

       The other thing that we have to do — apart from working together on the regulatory
framework and step up, speed up that process — we also — collectively as industry and
government, and I’ve talked about this many times in the past and it’s only now that we’re
getting down to laying the plans in place — need to talk about what we’re already doing in this
country when it comes to working and dealing with climate change. We’re too silent on that file.
If you were to talk to most Canadians today, most Canadians would say that there’s nothing
happening or there’s very little happening. Well, that couldn’t be further from the truth.

        We’re already arguing over the voluntary program with the automakers because of the
publicity that is coming out of California. In fact, right now we’re one-third of the way to
accomplishing our goal with the auto industry of 25 percent [increase in fuel efficiency] by 2010.
With all the publicity coming out of California from Governor Schwarzenegger, by 2010 they
will only have 4 percent. We will be up to 25 percent. And if you were to ask most Canadians
that question, I suspect a lot of people in this room wouldn’t be able to quote those numbers.

           So I’m saying to my department, let’s develop a communications plan, and if any industry
stakeholders want to get involved and talk about what you’ve already done to date, it’s time to do
it. It’s time to build confidence in Canadians and it’s time to boast about what we’re doing. Do
we need to do more? Absolutely. Let’s not be looked at by the population of Canada — as
governments or as industry stakeholders — as people who don’t care about the environment.

        So the two things that are going to be very, very high — as high as it was last year, even
more aggressive — on the agenda next year, number one is the regulatory system, and number
two is climate change. But equal to that is talking about what governments and what industry
collectively together have already done.
                                            -9-

       You need to understand what we’re doing. We certainly need to respect what you’ve
already done, and not point our fingers and saying as a Canadian population, “you’re not doing
anything” — that couldn’t be further from the truth.

       So you have my commitment in 2005. I felt I’ve spent enough time going around and
learning. It’s time now to put words into action and it’s time to get the job done. Thank you very
much.


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