March 16, 1954 (22nd Parliament, 1st Session)


George Prudham (Minister of Mines and Technical Surveys)


Hon. George Prudham (Minister of Mines and Technical Surveys):

Mr. Speaker, I had not intended to take part in this debate. However, as the department with which I am associated is very closely connected with the development of the natural resources of the country I think it is in order for me to state briefly what we think would be an orderly development of the natural gas resources in Canada.
As we all know, the natural resources belong to the provinces. Until Alberta declared it had a surplus of gas for export, this government had no gas to deal with. However, as soon as Alberta declared it had a surplus of gas for export, or that it would have a surplus at an early date, it became the responsibility of the federal government. My department has for years advocated that an orderly pattern of development of natural gas in Canada would involve the development of Peace river gas for the Pacific coast, and central and southern Alberta gas for Alberta; and, if and when there was a surplus, that it should come to eastern Canada.
We are very pleased that this pattern is taking shape now. Alberta has declared a surplus. In my opinion, they have been perhaps a little too conservative up until the present moment with respect to their reserves of gas. As a matter of fact, right now in the production of oil about 25 billion cubic feet of gas is being flared every year. This does not mean all that gas would be available for pipe lines. Some of it would originate in isolated places and it would not be economical to gather it, but a large portion of that gas now going to waste could be used by Canadians. The quantity now being flared in the production of oil just about equals the peak of the Turner valley waste, which Albertans especially and Canadians generally are not very happy to recall.
Several proposals have been before parliament and before the public as to how Alberta's surplus gas should be disposed of. Many rival companies, most of them United States companies, have proposed to take gas to different regions of the United States. Recently at the request of the Alberta government, the Minister of Trade and Commerce (Mr. Howe) assisted in bringing two of the major companies together for the purpose of building a trans-Canada line. The federal policy in respect to export of gas from Alberta was clearly stated by the Minister of Trade and Commerce in this house on March 13, 1953, as reported at page 2929 of Hansard, when he said:
Therefore the policy of the government of Canada is to refuse permits for moving natural gas by
Niagara Gas Transmission Limited pipe line across an international boundary until such time as we are convinced that there can be no economic use, present or future, for that natural gas, within Canada.
That is still the policy of this government, in spite of what many promoters and others seem to believe. Many of them still think permission will be given to send gas to Minneapolis and the inland empire south of Alberta, as they call the central western states, but the policy is as stated by the minister, and it still stands.
The Trans-Canada Pipe Line company has been incorporated. I believe an amendment to their charter is before the other house at the present time and will be coming here shortly. The amalgamation was brought about for the purpose of piping gas to eastern Canada. The Minister of Trade and Commerce went on to say, and I quote his words:
As I have said, the proposal is to follow this policy, within reason. To date one exception has been made. It was made in response to a request from the director of defence mobilization of the United States that Canada supply a defence production requirement for gas in order to maintain the production of copper at Anaconda's smelter in Montana. The requirement was small.
It was made originally to aid our common defence effort. The other exception was when we gave permission to export gas to the northwestern states through Vancouver. That was necessary in order to assure that British Columbia and the Vancouver area would get gas; otherwise the pipe line through that area would not have been economically possible.
As far as the bill before the house is concerned, I am not sure that it is at all necessary to bring gas in via the Niagara peninsula as the bill proposes. In the western part of Ontario we fortunately have quite a large reserve of natural gas. I am not exactly sure of the reserve, but I think it is in the order of 168 billion cubic feet. We are indeed fortunate that we have that gas storage basin at this end of the line. That gas is available for the early build-up of the market in Ontario.
In conversations we have had with the Ontario government we have been informed that they are quite willing to help facilitate the release of all that gas for the build-up period, but the latest information our department has is that there will not be quite enough gas in reserve in that storage basin in Ontario to meet the peak loads of the build-up period. In other words, they need a comparatively small quantity of gas at times. If they use that gas for the build-up they will need a small additional quantity at times of peak loads that will develop.
It may be that this proposed gas line will serve that purpose. There is, however, an

alternate proposal that the additional requirements of gas be brought in via the present international pipe line at Windsor. I do not know which proposal has more merit, but I presume the board of transport commissioners will weigh those factors very carefully, and when this bill goes to the committee and subsequently to the board of transport commissioners for study, we shall have all the facts.
That storage basin in Ontario will be vital. It will be important to the efficient operation of the Trans-Canada line and the operation of the gas line through the periods when there is a high peak of demand; and then probably during the night or hot weather there will be periods when the demand is low. If that storage basin in western Ontario is depleted in the building up of the initial market, in preparation for the flow that will come through the Trans-Canada line when it is built, the cushion will be there to absorb the off-peak loads and that will contribute to the efficient operation of the Trans-Canada line.
I do not know that I should like to say anything more at this time. I believe that the complete output of the Trans-Canada line can be used in central Canada, and I believe it will be needed there. The hon. member for Peace River (Mr. Low) mentioned that the building of this pipe line will probably interfere with the markets for coal from the maritimes. In my department I am between two fires, between coal and gas. I try to assess the merits of each and see how they both fit into the national energy picture.
There is a need now, and I believe there will be a continuing need, for coal in our energy picture in Canada. But I do know, and I think we all realize, that there will have to be adjustments. The coal industry is facing a crisis now. It seems that they have been in a crisis ever since I took over the responsibility of the coal board two years ago, and I cannot see anything but continuing -I was going to say "trouble", but at least continuing concern about the future of the industry for some years to come.
Maritime coal has never been a very big factor in the Ontario market. I believe it enjoys quite a large share of the Montreal and Quebec markets. If and when gas reaches Montreal it will probably mean that some of the maritime coal will be replaced. However, this country is not standing still. The population of the province of Ontario is increasing at the rate of 270,000 people a year, which is the population of a good-sized city. I think the gas will compete more with electricity and oil than it will with coal.

With our expanding economy we are going to need all forms of energy that may be available. During the adjustment period the coal industry is going to have to change its methods. There will have to be more research done by the industry as well as by governments. But I do believe that within a few years after natural gas reaches this market and the coal industry has had a chance to readjust itself to changing conditions there will be a place for both.
Probably I am getting a little away from the bill before us, and I do not think I shall digress any further. I wish to restate what I said before, that I think perhaps this proposed pipe line will fit into the picture. I am not sure that it will be absolutely essential, but I see no harm in passing it on to a committee and to the board of transport commissioners for study.

Full View