April 28, 2006 - Part 2 of 2

Gilbert : "Well, you've raised many issues, but let me just deal with the one about drilling. And if I could get my laptop out I could show you a beautiful graph of this. The best place for oil companies like Exxon to drill is in the United States . It's much better for them to drill there than in Saudia Arabia. It's closer to where the consumption is. It's not subject to whimsical political control. And the production in the United States , peaked, in the 48 states, peaked in 1970 or 1971. And at first there was no belief that this actually happened. And especially when the oil prices went up in the late 1970s and early 1980s, there was massive drilling exercise going on and the companies were pushed mainly be economists. The geologists said don't bother, but the economists were saying, you know, if we put enough money into it we will get that oil out. And there was a spectacular amount of drilling and it produced almost nothing. And when the oil prices have started going up again in the last couple of years, the response of the oil companies, especially Exxon, has been to essentially do nothing. They have not ramped up their drilling and if you give me time I'll fire up some data and charts that show you exactly that. Yes there are opportunities elsewhere. These have been taken into account in that Uppsalla University projection. There's nobody saying that we're right down at the bottom of the barrel so to speak in terms of discoveries and in terms of more production. But the real question is can we keep up with demand. This is the real question. And when we will exactly not be able to do that is a matter for dispute, but even Cambridge Research Associates whom you quoted there, Cambridge Energy Research Associates are conceding that, yeah we'll do okay in the shorter term than other people are saying, but 2030 we're going to have problems as well. I forgot your last question." Whitehead : "Yeah, um." Gilbert : "Oh, about the collusion. Yes."

Whitehead : "In the context of Enron and in the context that there have been multinational companies - and I know because I worked for one of them - that was charged with collusion and jacking up the price of uranium." Gilbert : "I'm out of my depth here again, but I'll just say one thing about oil and US securities exchange commission. And that is that they have rules and the rules are recognized as the toughest in the industry. The rules go back right to the Standard Oil scandals of the turn of the century. Oil has a really strong industry in the US of monopolies forming, monopolies being broken, and I know that there are controls on oil unlike any other industry, even including natural gas. What happened in the case of Enron in terms of oversight, I don't know, and I'm not familiar with the uranium matter, but what I do know is there have been something in the order of 30-40 investigations in the United States by state and federal officials in the matter of price collusion by oil companies. And to my best knowledge, not one of them has found any evidence for it. Again I'm in the uncomfortable position of having to defend these companies. I don't really want to do that. I think Exxon in particular is not being very helpful about the oil futures. Chevron is doing better, and Shell and BP are doing better. But to say that the current price and situation is nothing more than an artifact of their dishonesty and malfeasance I think is sliding by the point."

Whitehead : ". about governments. You don't really talk about what potentially could impact. I mean if there's going to be a shortage of oil and there's real demand in prices happening in countries, can you see actual countries becoming more protective of their resources and looking inward - I mean we've already seen what's happening with softwood lumber with respect to NAFTA . do you see that skewing your report with respect to politics?" Gilbert : "Well the problem with oil is that it is very concentrated in a very few places, and chiefly the middle east and North Africa , and to a degree Russia , and to a small degree Canada . It's going to be difficult for Germany , or Japan , or Australia , or indeed most of the countries, to close their borders because they don't have any oil to speak of. Canada , as I mentioned, is in a little bit different situation, but we're not. - and we do have enough oil to supply all of our needs for the foreseeable future - but we have gotten into the mode, both in terms of politics and trade deals and infrastructure, of sharing this with the US. So it's essentially not available to more than half the population of Canada . And as we said, we import 58% of the oil that we use, because that's the way it's evolved. So even in that crass way we're vulnerable to what's happening in the rest of the world."

Whitehead : "Yeah, I understand that. I think I was asking is it possible that the, in your report, in your projections, that in fact say for Canada we're going to say, look - I mean Venezuala my understanding is the price of gas in Venezula is very cheap" Gilbert : "Yes." Whitehead : "But not in Canada , because we're caught more up in the global, certainly NAFTA. My understanding is its more of NAFTA that impacts on our self sufficiency than any other agreement. Would that be true?" Gilbert : "Absolutely. And there are special provisions in NAFTA. We can't reduce the amount of oil we send to the US . We can get out of NAFTA but that would have other consequences. We're not able to subsidize oil in Canada in certain ways, that's another condition of NAFTA. And I don't think subsidy of things makes a lot of sense anyway. I think one of the most foolish things the government could do, whether it's Canada or Ontario , is provide subsidies for oil. They would be hugely expensive and there are many many more things you could do with that money as a government." Whitehead: "In your presentation you talked about hydrogen. And you talked about how inefficient it is with respect to delivery. I think the example you used was wind turbines with electrolysis to create hydrogen fuel. And I've been reading reports in the context of nuclear energy. Have you thought of hydrogen in those contexts?" Gilbert: "Yes, and you could certainly use nuclear energy to generate electricity which would then produce hydrogen by electrolysis. But exactly the same considerations apply. If you were to use that electricity directly, rather than make it into hydrogen and make the hydrogen into electricity again, in a fuel cell, you would lose only 10% of that energy on average, whereas you're going to be losing 75-80% if you go through all those conversions. So assuming that you're not going to have unlimited amounts of energy to play around with, it makes more sense to use the energy directly and not to produce hydrogen. One of the things you'll find in my report is that currently 97% of hydrogen is made from natural gas. It's not made by electrolysis which is quite an expensive way of doing it. And we have a natural gas problem that I really didn't touch on it - it's touched on in the report but not in the presentation - which may be a more serious problem than the oil problem."

Whitehead : "I'm just reading a comment here. The Atomic Energy Council of Canada states that building one CANDU reactor each year for 20 years would provide enough clean electricity to power 13 million hydrogen-powered vehicles. They claim that this would reduce emissions by up to 120 million metric tonnes per year. So you're saying it's not efficient, but at the end of the day you're still having energy that's being created, and you're still having less reliance on oil as a result of that energy being created." Gilbert : "I think if you were to build - in the incredible situation - was it one a year or one a day, I forget?" Whitehead : "One a year." Gilbert : "Even at the rate of one a year you would have better uses for that electricity than throwing three quarters of it away in driving vehicles around . even if that fuel cell model works for other reasons. . People who want nuclear reactors are having a great deal of difficulty getting even one a year accepted now. And I showed you a graph very briefly of Ontario 's current electricity shortfall, and none of that is going to the production of hydrogen. It would be an added use to a problem we already have." [ 1:29:33 ]

DiIanni : "Councillor Braden. Just so that people know, I've got Braden, Jackson, McHattie. I've got myself in there, and then I'll take others if interested."

Braden : Thanks Merulla for "requesting this study in the first place. . In the past - I don't know how long you've been working on this - but let's say it's six months. In the past six months during your investigation, has the energy situation basically stayed the same, gotten a little bit better, gotten a bit worse - worse meaning shorter supply?" Gilbert : "The indications are that its gotten worse. I mean the price is higher. It depends on which point that you take. We know that the peak was reached a few days ago when it was $75 for the first time, a barrel of crude. But I think the significant news in the last few months, while this report has been going on, was that little snippet that I said about Saudia Arabia. It's been suspected, and Matthew Simmons has a whole book about it, that Saudia Arabia, far from being able to ramp up its production, is struggling to even keep it at its current level, which is about 9.5, 10 billion barrels a day. . In this month, Saudia Arabia issued a report saying that - its not a precisely worded report, but a report suggesting that indeed this is the case - that their wells are suffering an 8% per year decline in production and they're only able to offset six of those percentage points. In other words there's already now a net decline in Saudia Arabia's net production. I think that's the most significant news and it is certainly news for the worse rather than for the better in terms of what we're talking about."

Braden : ".Councillor Collins asked . about the cost of public transit and to convert it. Can I ask you to comment at the other end - not necessarily in dollar terms but in terms of significance - could you talk about what the cost would be for this city, knowing what we now know, of delay?" Gilbert : "That's even harder to estimate than the cost of action. . The people who say, they almost say it couldn't happen because it was so bad, but people who say that this is really going to have an impact, that our whole civilization floats on relatively low cost fossil fuels, are, and therefore it will be clamatatious in terms of high prices. There is a point there, and there's a risk to communities that do not take some preventive action. I'm not now talking about getting ahead of the wave, but just protecting themselves - will suffer some pretty severe consequences. Not being able to import food. Not being able to move around. Not being able to heat their buildings, even, or do other things. And how you cost these, I mean, people attach numbers to New Orleans , but you really wonder about them. But really, doing nothing, and just being protective, and what I'm proposing for Hamilton , which is getting ahead of the wave and exploiting this. And there the cost benefit equation becomes a very different thing. There, yes there will be costs, and some of them have been potentially identified. But the benefits are enormous. It means a city that works - not only a city that works, but a city that relatively prospers when others are having difficulty. It's hard to attach numbers to this."

Braden : ".this idea that we would have a . business development focus - its an intelligent industry as I can see it. In the past I associated that before with the Intel guys, the Silicon Valley . Can you comment on, if there is a place, if we can generalize about where does that kind of an industry want to be. Does it want to be out farming with me in the boonies? Does it want to be floating on a raft? Can you talk about from your experience, is there a place? Can it go anywhere, or does it really belong somewhere?" Gilbert : "I think this is a wide-ranging business. It's a business to do with energy production and energy consumption. Some parts of it need space. You know if you're testing out some solar arrays, different photovoltaic cells, you need space .. Some parts of it are very much lab work - measuring insulation techniques and so on. So it's hard to say. I think" DiIanni : "Can we have some order please [referring to other councillors chatting]". Gilbert : "The point I would make is not so much what are the space requirements which are rather variable, but what are the cultural requirements of the people who are likely to be working in this leading edge sort of industries. And what we know is that knowledge workers and the kind of relative young people that get into this, and the people who like being in this kind of business, want to be in a place that's exciting, that is challenging, has lots of after-hour opportunities - they like to be in concnetrations of activity, and so on. So that's an equally important point. . The kind of employment I'm talking about here is - a lot of its not place related. It is out there in the community putting up the solar panels, digging up the ground for a geo-exchange, putting up your, doing the insulation, hugely labour intensive, putting up your wind turbines and so on. Others needs to be in a place . what about Hamilton becoming a centre for trolley bus production. I mean that needs to be somewhere, and you need a certain kind of factory to do that."

Braden : "I notice in the report, I think it's intentional - the report is not a doom and gloom thing at all. It's a here's a challenge and you've got a choice. It's quite uplifting and challenging. But there are also some fairly hard and crude, there's some casulties coming. In your experience, presumably you've done similar things before, is it better not to talk about those casualties so that we can go ahead with less worry? Because the casualties are out there. About change, I think you're saying that change is not going to be gentle, and slightly incremental. It might at worse come with a hell of a band. Are you as a consultant, if you were doing the next job, would you want to spell out for us what this crude picture looks like? Cause that might be the last job you ever did. So I'm just asking you through your experience, how you deal with this. This is radical change." Gilbert : "Since I've been consulting for 15 years and relative to my childhood and my growing up nothing much has changed in the world in the 15 years in terms of the kind of thing that we're talking about. But I know from remembering from my childhood - I was brought up in wartime London and where we had almost nothing, and for years after the war - I know that huge changes can take place in people's lives. And that you can move from one thing to another thing, and it can happen, that changes are possible. And people live through them, and yes there is turmoil and dislocation - the house that I was living in was bombed twice in the war. But you can do it. You can change. No matter how bad the situation. And the situation can be bad if you don't prepare for it. So I'm an optimistic person about the human condition and the human ability to overcome dramatic changes in the environment, because I've seen them in my life. That doesn't mean to say that we should deliberately expose ourselves to this. . the whole point of my report is to make it easy for the people in the city of Hamilton to deal with something that is inevitable. There's a question about the timing, but I think it's inevitable. And I think we will move toward what in some ways will be a better condition; a condition that is more sustainable; a condition that is less reliant on unpredictable outside interests; a condition that in many ways could be as productive, and as prosperous, and as congenial as what we have now, but more solid because it's sustainable. I see this as a very good challenge, a possible challenge, and not so much from my consulting experience but from my life experience, something that entirely could be done." [ 1:40:54 ]

Jackson : ".appreciate the presentation, Dr Gilbert, its been very informative. Four questions . You talk about Hamilton as an electrical city, so is there any concern about the current rise in electrical costs versus fossil fuel costs, or do you think there's less disadvantages? Strictly from the price standpoint." Gilbert : "You're absolutely right. Even though both costs are risiing, the electrical costs in Ontario because of the very particular situation, the shortfall between production and demand, the electricity prices are actually rising in Ontario - they're not generally - than fossil fuel costs. And this, although I didn't say it directly in the report, I said it indirectly, it's the fragility of the situation around Hamilton that partly impels me to recommend that Hamilton produces all of its own electricity. And I believe that properly done - not that Hamilton would be an island, you know, it would still be connected to the grid and there would still be exchanges - but that it sends out as much as it gets back - it produces enough for its own needs. I think that's entirely feasible. I think it's the way to go. There's a technical name for it. It's called distributative generation. And yes there can be some expenses parts to it . and I'm not pretending that electricity will not also rise. But it will be a more secure fuel, a more practible fuel and one that gives Hamilton more opportunity. You know Hamilton has no oil wells. Maybe it has one. It used to have one but maybe it's producing nothing now. . It has a myriad of opportunities to generate electricity. Every building, not every building, most buildings in Hamilton can produce, at the site, more than half the electricity that they use now. That's where I think you should go."

Jackson : "Dr Gilbert are you saying then in essence with no aerotropolis and with what you've presented today, we can as a city reverse that jobs deficit?" Gilbert : "I think you can as a city reverse the jobs deficit. Whether you need the aerotropolis. I answered this before. I really can't answer that. All I'm saying is don't tie those lands to air freight, and if you're going to use them, and I haven't looked at alternatives, then focus on energy. And it's really the same answer as I gave earlier." Jackson : "Okay, and thirdly, what are some of the legal challenges you're talking about that we would have?" Gilbert : "Well I looked into those. There's a long footnote in my report . and I was really surprised. I didn't put it in the main part of my report because it would be incredibly boring. But there's almost a page long on what the legal ability of the city of Hamilton is in this area. And I was really quite surprised because I hadn't actually looked at it before. And in common with other muncipalities Hamilton actually has quite a lot of opportunities to engage in energy-related things. . I was actually surprised. I'm not a lawyer and you'll have to get a legal opinion on this. But it's actually quite good."

Jackson : ".you're saying the chance of prices rising in the next 25 years are better than even, so the dire warnings of the Trudeaus and Carters of the 1970s, this is a new version 30 years later of that type of dire warning, or slightly different, that's the message you're giving us here today? I remember that 30 years ago when I was in university and 30 years later I've never seen more Mercedes, SUVs and Grand Cherokees on the roads that I do now. So I'm just trying to understand, is this another dire warning or is it truly realistic or is it like it was 30 years ago possibly?" Gilbert : "Well 30 years ago, a little bit more initially, 1973 was when it all started, was very much a politically fabricated crisis. And then the second crisis a few years later. It was to do with OPEC trying to, got together just before that time and asserting its power. And a good question was asked earlier is what we have now the same crisis. And the answer is that it could be because we are sufficiently in the dark where 3/4 of the oil is, but what we know from much improved geological understanding, from an ability to do things like satellite exploration . and just gradual accumulation of information over that period that would have happened anyway, suggests that we are approaching the point where production cannot keep up with supply. That it's not some people holding back oil; it is that the oil ain't there. In fact we have the strongest evidence of this in the 1970s and we didn't know it, because people did not realize that the United States had reached a peak in its oil production until quite a few years after it happened. And that was the first indication of what the shapes of the curves are, and what the dynamics are. And now we've had 59 countries go through oil production peaks - the most recent big one being the North Sea - and we now know how it works. And you put these all together and you can figure out what's happening to the world." [ 1:48:07 ]

Robichaud : "Just one other point just to reiterate. I think it's important. You have to also look at uncoupling supply versus price considerations because we do have to look at the situation in Canada with the Alberta oil sands where to meet domestic need alone there are 250 years of oil supply in Alberta . And that's a proven resource. If you look at it as a continental resource, there's approximately 100 years of supply in Alberta to meet North American needs. Venezula announced yesterday - Venezula also has oil sands situations, and yesterday they're actually now starting to get into asking expressions of interest to start developing their resource. And one of the things that's happening in the world situation, is that you're starting to see these sort of strategic alliances for long term stable secure supplies. China 's coupling with Nigeria in terms of doing work there. The US is looking to our oil sands for those sort of secure supply situations. Russia , you know who they're going to provide. And that's the way the oil market is sort of into alliances, the way it's going. The big issue that we have is, will world energy prices go up. Yes. Then what becomes a multi-pronged strategy to respond to that. And I think that's sort of what Mr Gilbert was getting at, that you move towards electricity generation where it makes sense, you encourage passive solar energy situations or alternatives like windmills, those sort of situations, where it makes sense in those contexts. There's other situation where oil will still need to be consumed. There's a suggestion for emergency service vehicles, they would also need to have access to oil and diesel fuel to make their operations. So what is being suggesting is not one single action that the municipality or the provincial government would take, but it would be a combination of a variety of actions that would form a strategy that minimizes your risk by minimizing your exposure to any one particular area where you may have an up or down side in the next 25-30 years. Sorry for interrupting." [ 1:50:02 ].

Jackson : "I appreciate that Steven. I'm just trying to interpret, understand and react to the potentially dire warnings."

McHattie : "First off I want to thank Dr Gilbert for the report. It was incredibly informative, thought-provoking. You've seen that in the last couple of hours. Lots of really interesting ideas and Mr Mayor later on I've got a motion that I'll bring forward that seeks to action a number of the thoughts and ideas and take it further so we can better understand the context within the city of Hamilton . I'd like to just spend just a moment in my five minutes on the aerotropolis in part, but more on economic development and jobs. I think that Dr Gilbert indicated that's really what this is all about. It started off - it was the second slide - about the lack of jobs in Hamilton and that being the item. And I would agree entirely. That's a clear priority for the city, if not the top priority for the city. So what I'm trying to understand though is that there may be a number of different ways of serving that priority. The GRIDS options that we've been given so far, each one of those GRIDS options has the aerotropolis as part of it, so we don't have any alternatives. The alternative's already been chosen by city council. And that's one of the challenges that people like me have, is that we're not being presented with the alternatives that we need to consider to actually make informed choices on what the top priority might be. We know that the Glanbrook Business Park , Mr Mayor you've got the servicing in place for that, the province involved in that. So that's a business park, a good sized business park that will go ahead. So that's part of our economic development arsenal. But as we decide how this satisfies the number of jobs that GRIDS asks for, the provincial policy statement, Greenbelt, that the Places to Grow asks for the province, it seems to me that we have to look at those alternatives and what are the best, most sustainable choices for an economic development strategy. And I'm just trying to understand your comments around the aerotropolis. I've heard what you said, and we need to stay away from the reliance on the air side of that. But we also you talked about the downtown and the port area as an economic node. And we have a number of brownfields down there. Councillor Collins talked about brownfields. Just trying to understand the types of jobs we should be going after. It seems to me - we need more than this, but just take 1000 jobs. You get 1000 jobs in one place, or maybe two places. You need a lot of land for 1000 jobs, 500 jobs. But what about the option where you've got 50 jobs in 200 places, all those places being much smaller of course. And you mentioned the idea that some of these are not place related, some of the jobs that may be available there. And we know that the issue of air and truck freight and air and water through the port all factor into this. To my knowledge, so far - we've asked the question but we don't have a response yet - we don't have a rail connection from the port to the Glanbrook Business Park or more importantly perhaps to the airport lands. So we know that's a bit of a tough spot for us now. We don't have that and we don't know that's going to be available or not. So given that kind of scenario, I don't think it's a question of not doing the aerotropolis, doing the aerotropolis, it's - and I know I've heard your comments that you didn't do an analysis of the business parks or the alternatives, but just in general principles approach what should we be looking at as we seek those alternatives? Not an analsyis of specific alternatives - not your job - but what sort of criteria should we be looking at to look at those different alternatives. Cause assuming that's what we need to do in the context in this case of the oil peak, the energy challenges that we anticipate."

Gilbert : "Well I think that there are different levels of analysis and commitment. I think that the first thing that you need to do, and not yet, if you agree, commit yourselves to this energy based strategy, and all that it implies - changes in transportation, changes in how buildings use energy, and energy production. There are three elements there. And then the second thing is this is a very big field. Where are your focuses going to be? And in terms of job creation? And there are many opportunities. It could be that you really want to focus on building insulation. You figure out that this is the biggest bang for the buck. It may be that you want to focus on the geo-exchange, you know, getting the pipes in the ground. It maybe - I could go on. I gave a list, a whole slide of these. First of all focus on energy if that's what you do. Secondly which part of the pie, and what are the relative emphases? And only at that point do you then get to what kind of resources do you need to do this. And part of those resources involve the land available to do this. And it seems to me that part of the thinking that I've seen - and I have not read all the city reports on this because I didn't see it as being my brief - but there is a certain amount of thinking of putting the land first and then wondering how to fill the land with jobs. And what I'm proposing is an alternative way of going about it, which is figuring out what you want to do and then after you've defined it a bit, what the lands are for that particular thing. So I can't answer your question directly because you have to go through those first two stages first."

McHattie : "Thanks very much for that answer, and I think Mr Mayor that's what I'm struggling with - jumping right to the aerotropolis. It may be where we end up. I don't think we've had that debate, to talk about not just the land first, but what are the types of jobs that we need. What are our options? How do we relate to the rail and port issues that we don't currently have on the airport lands? We haven't had that debate. I know on May 18 will have further discussion on the GRIDS process and strategy, and I'd really like to carve out some way we can have this debate somehow around this table. So I would just offer that as a thought." Interrupted by DiIanni : "Well do that, but just for the sake of Richard hasn't had a chance to see all the reports. Some around this table have said that we've had that debate for the last 10 years and beyond in terms of some of the work that needs to be done in that areas. And staff have prepared lots of reports that will be made available. But that is a discussion we're going to have in a" interrupted by McHattie . "I'd like to see them. I've been here and I haven't seen that kind of analysis." Interrupted by DiIanni . "Let's ask Steve for some of that." [ 1:57:52 ]

Robichaud : "Well the GRIDS has sort of been building on the work, a lot of the other work that has already been done and been referred to the GRIDS process - the economic development strategy - Mr Everson could confirm the dates. There was an original economic development strategy that was done and there was the update that was done. That was referred to the GRIDS process in terms of the cluster based approach with specific recommendations with regard to the airport. The airport master plan was presented to the committee and that was referred to the GRIDS process. Some of the other initiatives, the social development strategy, that was referred to the GRIDS process. The work that the province has been doing in terms of the growth forecast, in terms of Places to Grow, we've addressed that through the GRIDS process. So it has been sort of building, in all those added information feeding into the GRIDS process. There's other work that's being done in terms of the infrastructure master plans and how they all have been referred back into the GRIDS process for consideration. And so it's become an integrated decision making process as opposed to a specific one issue here or there, and then making the basis for those decisions. What's important to remember is that since the planning changes that have occurred in Ontario in the past two years have really re-emphasized the provincial role on a go forward basis, and a much stronger provincial role, in terms of that coming out of the Places to Grow initiative and the background report that Hemson you know the population forecast talked about the nature of the Ontario economy, what proportion of that Ontario economy would be in manufacturing versus other uses and the recognition that Ontario's a very strongly based manufacturing economy, which was reflected in those growth forecasts then being assigned to Hamilton. The province has made it very clear that those growth forecasts that are contained in Places to Grow are the growth forecasts that all the municipalities within the greater golden horseshoe are going to have to use for their growth planning purposes. They are not to use larger numbers or smaller numbers. There are communities outside of Hamilton that would like to grow more than those growth numbers allocate and they're being told, no you can't do that. I know our neighbours to the east in Durham , they're not very happy with their employment forecasts, which are much lower than Hamilton , because they." Interrupted by DiIanni : "Steve, I'm just going to interrupt you because I want to reserve that for the GRIDS. My whole point in answer to your direct question was that there is lots of information that maybe Dr Gilbert hasn't seen and we will have to debate." McHattie : "One last point if I can. I would like to ask for a copy of the report that forecasts the number of jobs available in the port and the downtown and the brownfields lands. That's a report I'm sure we have somewhere and I haven't seen that. I may have missed that. And I'd like to see a report, which we've asked for before, that shows us how we're going to get the rail link to the airport as well. So those are just two examples, Mr Mayor. I'd like to see also a third report that speaks to the types of jobs and whether given the energy scenario that we've heard about, whether we can fit the types of jobs to the port and the downtown as an example and Glanbrook - areas that we already know are available as well. If those reports have been done and I've missed them I apologize Mr Mayor." [ 2:00:52 ]

DiIanni : "Some of those very specific ones may not have been brought before this council this term and I don't know what's available and we'll make that available for sure. If you're done, I've got a few questions as well. And then we'll see who else. Let me preface by saying first of all and echoing what my council colleagues have said that this was a thought-provoking and thoughtful report. Given the fact that its not the most expensive consultant's report that we've done, you've taken some time to understand our situation and not only to provide us with some of the alarming information, as one of the councillors pointed out, but also a way of dealing with it, and that's very positive, and I think. And I think that's the way, I hope, that's the spirit that council will receive that information, not dogma, not bible, not anything that we want to use for any ideological reason to deal with, you know, other land uses, but simply as a state of the world, and we're part of that, and how do we go forward and deal with that in an intelligent way. So that's certainly the spirit that I would receive this report. I do have a few questions, and since the airport has been mentioned let me just start there perhaps. And let me say also that I believe that we're in a peak oil, you know, diminishing resources. It's a finite resource. And whether there's a science that says, you know, 250 years domestically or 100 years in terms of continentally, or maybe 20 years in terms of world wide, the fact of the matter is, whereever point we're at, we're diminishing that resource. It's not renewable. We all know that. That's not a surprise. And the councillor mentioned the energy crisis in the 1970s. I remember 73 very well because I'd just bought a house a month before OPEC pulled the trigger. And I was driving to Mississauga at the time, and I thought oh my god the world is collapsing around me. I'd just made this major investment. And it was a shock. I mean there was fear, . a young person not making a lot of money and having commitments and having made a huge commitment we were worried about what the nature of that commitment was. And of course things settled down. And then six years later we had another shock, but things settled down. I would maintain, maybe even comment on this first before we get to the airport, but almost now, if you factor the inflation, that we're probably paying less for fuel now than we were in the initial shock of 73, inflation factor. I don't know whether you've done that stat or not." Gilbert : "We're paying more than 73 but actually still a little bit less than the next shock when the prices actually went up higher." DiIanni : "And my point in that is there is probably room in the market - not that people want to hear this, I certainly don't .for price increase. And it will adjust. Even if we go 4 times increase, I mean, many of the European countries are there already, and they're getting on with life and in fact probably the fact that the Japanese car took such a foothold here in North America was a direct result of the fact that they're smaller cars and more fuel efficient, and they came here and sold lots, because that's what people were looking for. And then we forgot, we got lazy and we got greedier in terms of cars and then went to the bigger vehicle." Gilbert : "With respect Mr Mayor, no European country is four times what we are. There are some that are just above two times and . I think that an essential point that I make is you can probably go up to 2.5 times and it won't make much difference. I mean we'll adjust. But four times, you have to think about structural changes. How things will really work."

DiIanni : "And I believe that strongly. In fact even two times at times will scare us and hopefully into making the right changes. [ 2:05:16 ] One of our councillors here has been telling us for some time now that you know that the point will come that will force these radical changes and we need to be aware of that. In terms of the airport, I don't know what will happen in the future of course, but my guess is that airplanes will still be flying 100 years from now. Are you not of that opinion?" Gilbert : "Difficult to figure out what they're going to be flying on, but yes, I think you're probably right. They will still be flying. You can fly planes on ethanol and you can fly planes on hydrogen. And you will be able to make ethanol from crops, and you will be able to make hydrogen. But you will not be able to make it anywhere near the quantities that we are used to using for aviation. And it really comes down to quantities. It's a matter always of supply and demand. I mean Steve Robichaud is absolutely right that if you take the current production from the oil sands there are hundreds of years left of production there. But you can't squeeze more out of the oil sands than a certain amount in a year. Currently there's a couple of million barrels a day coming out, and nobody is saying its going to be above five. And US uses 20 a day. So you have to put that in context. It's a matter of production limits, and they are the key thing." DiIanni : "And so on that point, and given that you want us to reach out into the future and anticipate and prepare ourselves for that now, so what have you considered the role of innovation in that?" Gilbert : "A lot, and yes things could be invented that we don't know about. It is very hard to predict the future. And you know I partly showed that image of Hamilton in 2003, created in 1903, to show that things don't turn out as you expect them. And I can put that slide up again. It's a very interesting one, it's from the Hamilton Spectator. We don't know how the future is going to unfold, and I much prefer to attach a probability to these things, and that's why I said, don't try and predict what the price will be but only what are the chances that it will be above a certain level. And that's a more reasonable thing to do in my view. I don't know where it is between 50 and 100%. I would be inclined to say that it's nearer a 100%, but you can't be certain. And even if it's near 50%, say it's a 55% chance that oil will be, that gasoline will be four times higher. That means it's more likely than not to happen, and planning is about taking into account probabilities of currents and risks of actions and inaction."

DiIanni : "And not that you wrote on this in your report, but again - and then I'll leave the airport theme. We'll have lots of discussion on this when we debate GRIDS I'm sure. But I'm sure that even though you didn't write about this in your report, and weren't asked to examine this, I'm sure you're hearing, living in Toronto , about the Pickering option for the airport in Pickering . Any thoughts on that?" Gilbert : "Well I think it's a ludicrous idea that there would be another airport in Toronto when the most expensive infrastructure in Canada has just produced an airport that has more than twice the current capacity, the current usage, sorry, the capacity more than twice the current usage. And current projections don't offer a lot of opportunity to fill that. Why you would then want to even consider another airport is a mystery to me. And that's even without the energy constraints. . It's difficult to know exactly the price of crude oil - and jet kerosene is very tied to the price of crude oil - where the airlines start giving up. But I would guess that it's around $100 a barrel. So the question then is when do you think it's going to be $100 a barrel. Well I would guess that's probably going to happen next year. It could happen this year. So I think the beginning of the end - not the end - of the aviation industry is quite close upon us. And maybe they'll figure out a way of running planes that can survive on that price of jet fuel but nobody's come up with it yet."

DiIanni : "I think some of the airport experts will tell you about some of the fuel efficient planes that are on the market today, but just haven't been bought because people don't have the money. And that's what consolidation in the airline industry is all about. That's a discussion for some other time. Let me leave that. I'm glad to hear your answer on Pickering . I think everyone around this table would certainly agree with you on that. Energy from waste, and Hamilton as the electric city, and councillor Jackson asked you a question you know those prices are going up even higher and how do we deal with it and you answered well produce your own. So I want to ask you a couple of questions about that. But the first question is - and I heard what you said very carefully, and we are working with Niagara as you might know and exploring some alternatives for us and we'll see what those studies will bring us. But one of your answers was you know there are communities willing to send you energy, or at least the waste that will produce that energy, and I have spoken to some of those mayors who've said, you know, you guys go in this direction and we'll be your customers. But think about the image of Hamilton , and you know, because of our manufacturing of which we are proud, but you know some people think that's all we are. Think about the image of Hamilton . What would that do to it if we became .?" Gilbert : "Yea. If it's not handled right it could be not good for Hamilton 's image. But if it's handled right. I mean what comes with this? First thing is, it's an energy focus. It's not a waste disposal focus. Hamilton is not doing this because it wants to dispose of other people's waste. Hamilton is doing this because it wants to generate it's own electricity and use the waste heat. . it's attaching these really really stringent conditions. I visited energy from waste plants in several countries - Japan, Germany, Sweden, Denmark and others - and every single site that I've been to, the biggest problem - and some of them are actually in neighbourhoods, especially in Japan. The biggest problem is the truck traffic. Every place that I've been you ask people what's the problem with this facility. It's the truck traffic. And one key thing that is proposed here is that if we start taking other people's waste it does not come by truck. That's the first thing. The second thing is - and I've checked this out but I haven't done it in a systematic way - the technology is available know so that these plants, and there would actually be four of them but all in the same place, this facility would be acting as an air cleaner most of the time. I mean people are also worried about what comes out of the stack. Any energy from waste plant now acts as an air cleaner some days of the year. In other words what's coming out of the stack is better than the air around it. But the technology's available not to happen every day of the year, because sometimes the air's so clean you couldn't improve on it, but to make it happen more than half the time. And that would be part of the image. Hamilton is actually making its own energy and cleaning its air, and if you present it that way I think it's a much different story." DiIanni : "I'm sure we'll have lots of debates on that issue, although we are certainly exploring it and there are some councillors who are taking the lead on that." Gilbert : "But I want to stress what I'm proposing is a much larger scale than the Hamilton-Niagara proposal." DiIanni : "I understand that. Councillor Merulla, you want to ask him? Go ahead."

Merulla : "I was just wondering how incineration can produce emitting, or any type of emissions, that that emission emission actually better than the air quality emitting it to." Gilbert : "It simply would be a question of what comes off the furnace . there are days when there are measurable levels of pollution in the air and if you were to take that air and put it through a filter, the air would be better. And that's essentially what happens ." Merulla: "In a perfect world I guess if the temperature is right, and the buffers are acting correctly, but how does one monitor that so that those conditions are perfect every single moment of the day." Gilbert: "Well what happens in Sweden . which incinerates most of its waste, where I think this is done in the most systematic way, is there are all over the plant there are remote sensors that are picking things up, that go directly to the monitoring authority, which is usually the county, it's usually an office within the county in the way Sweden is organized. And according to the violation, if there is, there is a steep fine level. There is an order to instantly close the plant down. And this is done. But on the other hand, the plants are very very reliable. Things do happen occasionally, but the plants are very very reliable. The technology is well proven and basically the thing works, never perfectly, but more or less without incident. So the combination of the improved technology at the plant . gives you something you can have confidence in. You don't have to go Sweden to do this. Everything is done better there than anywhere else, but you can go to the plant that I showed in Florida on the slide - the left hand one, the right hand one is in Burnaby BC. But the left hand one is the largest plant in the world, and there they have an equally sophisticated but not quite so systematically method of government control over what is in that plant." Merulla : "Have you ever worked in that industry, or for that company?" Gilbert : "Which company?" Merulla : "The company in BC? The one you just showed the picture of?" Gilbert : "I have done work in the past for the company that built the plant, but not the one that is operating the plant." Merulla : "Okay ." [ 2:17:38 ]

DiIanni : "You took up the last three minutes of my five minutes. I was going to ask about how you . on rail and I think you've answered that anyways in terms of the waste possibly coming."

Pearson : "Thank you Mr Mayor, well you've said pretty much what I was going to say very concisely. I'm really pleased with the presentation today - not all doom and gloom. We do have challenges ahead, and yes history seems to repeat itself. And for better or worse we seem to come out of crisis situations with improvements in technology. And on the note Mr Mayor, it's funny when I started getting emails with regards to the peak oil report coming in and Hamilton being the electric city, I kept looking over, and I just showed you this this afternoon. This is a portrait that I had mounted about two years ago when I got elected in Hamilton [shows large photo]. And this is Hamilton in 1913 and it shows the electric city [moves away from microphone to show it to Gilbert]. DiIanni: "Councillor Jackson rode those trolleys [laughter] or councillor Bratina." Pearson: "It was a sad day when the trolleys were removed in Hamilton because I think they were very efficient and it will be interesting to see how we will get them back." [ 2:19:01 ]

DiIanni : "Those are the questions. Thank you very much for answering them and I understand that we do have, I know we do have a staff recommendation, and councillor McHattie you've got some further recommendations as well. So let's turn our attention to that as well. Councillor Whitehead?"

Whitehead : "In the presentation it included that a more comprehensive report might be considered. And I'm really interested in at least pursuing what the terms of reference would look like." DiIanni : "I thinkcouncilor McHattie has drafted some things. I think staff needs to look at this, weigh in, and give us some parameters as to what things might look like so that then we can make a decision. So we're too premature in saying that's where we are going. I think what we're saying is let staff look at it, give us some implications and costs and so on and then we'll make a decision." Whitehead : "Again, just on that, I'm more curious about what the terms of reference would be. If its coming back to council with regards to cost implications, then that's fine, but the other piece is if in fact they would develop what the terms of reference might look like. Cause you need to have that to determine the costs, right?" DiIanni : "Sure, and I would hope that with the direction from council staff will draft some things for us to approve. Councillor McHattie?"

McHattie : "Thanks Mr Mayor, and it's moved by myself and seconded by councillor Merulla - and I just want to say in the beginning that this is in the spirit of trying to take some of the items in the report and pulling them out and asking for more information in the Hamilton context and the city context. [He goes on to review the resolution - see below].

Bratina: Can I suggest that staff report back on possible federal or provincial infrastructure monies that may be applied to possible peak oil initiatives. I know that there's federal money out there." DiIanni: "Yes, for projects though." Bratina: "Well the councillor talked about putting up trolley wires." DiIanni: "I'm just trying to help with the wording, alright?" Bratina : "I see." DiIanni: "So projects that may emanate from or flow from any of the action that we might take, is where you want to go?" Bratina: "Do you see any value in having some money applied to this?" DiIanni : "Yeah, there's value in getting money from different levels of government, for sure. [to staff] Do you get the flavour of the recommendation? [to McHattie] Are you okay with that? The only question I have of staff, has staff had a chance to look at these? I'm wondering if we're adding a work program that hasn't been budgetted for, or planned for. Can staff give us an indication of that, or would they need some time?" Peace : "I'd like the opportunity to pull together a group of staff and just have a quick review, and then I'll respond back to councillors with an email as soon as possible and if I need further direction, I'll seek that, and ensure that we can meet the timelines, if that's okay with Committee of the Whole." DiIanni: "Is that okay councillor, did you hear that?" McHattie: "Mr Mayor if I can just ask to be part of that discussion with Glen Peace as well." DiIanni: "Well why don't you speak with the city manager and work out the logistics." McHattie: "I'd like to work with him on that, rather than just having staff go ahead and do it. I'd like to work with him on that." DiIanni: "Why don't you speak with Mr Peace and arrange that. Okay, any other comments or questions? Been duly moved and seconded. All in favour? Against? That's carried. And the staff recommendations are piggy-backing on this? Councillor Pearson? Seconded by councillor Samson. All in favour? That's carried. Thank you very much. I wonder, can I ask someone to come and take the chair for the rest of the meeting? Councillor Whitehead would you mind taking the chair for the balance of the meeting? I'll try to be back." [Whitehead assumes the chair]. [ 2:26:08 ]

McHattie's motion (seconded by Merulla ):

1. That the "Peak Oil" report be referred to the following staff for a report to the PWIE Committee:
   1. The Manager of Energy Initiatives for a report on the feasibility of recommendations on reducing energy use by two-thirds by 2018, as well as ideas on producing energy, and to specifically investigate feasibility of applying energy conservation measures currently being employed by HES corporation-wide
   2. HSR staff to investigate the feasibility of using electricity (i.e. trolley buses) to fuel transit, specifically on the east-west and north-south Bus Rapid Transit (BTR) routes
2. That staff report to the Planning and Economic Development Committee on the following:
   1. A policy to encourage LEED (Leadership in Energy and Environmental Design) certification for all new buildings to be constructed in Hamilton
   2. Working with Hamilton Utilities Corporation / Horizon Utilities Corporation to investigate feasibility of establishing an Energy Cluster as part of the City of Hamilton Economic Development Strategy
   3. A joint investigation by Planning and Public Works Departments on the feasibility of preparing the Glanbrook Business Park as an Eco-Park, involving possible use of a district energy system, re-use of waste materials amongst industries, etc.
3. That the Peak Oil report be forwarded to HUC and Horizon Boards for their consideration;
4. That staff consider a terms of reference and costs for a follow-up report and report back at the GRIDS COW meeting
5. [added section on investigating the availability of federal or provincial monies for these issues]

Carried.

DISCUSSION

5.1 Audit Operational Review - Implementation Plans
Mayor DiIanni asked councillor Whitehead to assume the chair and left the meeting. There was a brief presentation by staff after which Braden indicated that he would like to defer the item because he wasn't prepared to discuss what he saw as a significant decision. Other councillors agreed and also decided to defer item 5.2.

5.2 Finance&Administration Organization Review - Implementation Plan (CM05031(a))(City Wide)
Deferred.

Councillor Jackson asked for a standing recorded vote on the motion to adjourn the meeting. The motion was passed unanimously, but by asking for the vote a formal record was generated of who was still at the meeting (and who had left or not shown up in the first place). [ 2:30:43 ]

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