Rep: OEB Doc: 12WVX Rev: 0 ONTARIO ENERGY BOARD Volume: 3 8 OCTOBER 2003 BEFORE: P. SOMMERVILLE PRESIDING MEMBER A. BIRCHENOUGH MEMBER 1 RP-2003-0063 2 IN THE MATTER OF the Ontario Energy Board Act, 1998, S.O. 1998, c.15 (Sched. B); AND IN THE MATTER OF an Application by Union Gas Limited for an Order or Orders approving or fixing just and reasonable rates and other charges for the sale, distribution, storage, and transmission of gas for the period commencing January 1, 2004. 3 RP-2003-0063 4 8 OCTOBER 2003 5 HEARING HELD AT TORONTO, ONTARIO 6 APPEARANCES 7 PAT MORAN Board Counsel MARTIN DAVIES Board Staff JAMES WIGHTMAN Board Staff MICHAEL PENNY Union Gas Limited TOM BRETT Ontario Association of School Business Officials MICHAEL JANIGAN Vulnerable Energy Consumers' Coalition ROBERT WARREN Consumers Association of Canada ALICK RYDER City of Kitchener GEORGE VEGH CEED, OESC, Superior Energy Management, Union Energy JAY SHEPHERD Ontario Public School Boards Association MIMI SINGH CME RANDY AIKEN London Property Management Association, Wholesale Gas Service Purchasers Group SCOTT STOLL Northern Cross Energy TIBOR HAYNAL TransCanada PipeLines ROBERT ROWE Enbridge Gas Distribution Inc. PETER THOMPSON Industrial Gas Users Association BRIAN DINGWALL Energy Probe, HVAC Coalition, Distributed Energy Association DERECK FRANCIS Energy Objective VALERIE YOUNG Ontario Association of Physical Plant Administrators PETER SCULLY City of Timmins, City of Sudbury, FNOM JOHN RATTRAY Ontario Power Generation 8 TABLE OF CONTENTS 9 PRELIMINARY MATTERS: [18] UNION GAS LIMITED - PANEL 2; RESUMED; WEAVER, FOGWILL, ROOT [27] CROSS-EXAMINATION BY MR. AIKEN: [31] CROSS-EXAMINATION BY MR. RYDER: [379] CROSS-EXAMINATION BY MR. THOMPSON: [691] PRELIMINARY MATTERS: [894] UNION GAS LIMITED - PANEL 2; RESUMED; WEAVER, FOGWILL, ROOT [920] CROSS-EXAMINATION BY MR. THOMPSON: [924] CROSS-EXAMINATION BY MR. MORAN: [1053] RE-EXAMINATION BY MR. PENNY: [1159] UNION GAS LIMITED - PANEL 3; GARDINER, POREDOS, ROGERS [1282] EXAMINATION BY MR. PENNY: [1286] CROSS-EXAMINATION BY MR. WARREN: [1355] 10 EXHIBITS 11 EXHIBIT NO. M.3.1: LPMA/WGSPG CROSS-EXAMINATION MATERIALS 1 [37] EXHIBIT NO. M.3.2: RESPONSE OF BOTH UNION AND ENBRIDGE TO QUESTION 46 FROM THE CONSUMERS' ASSOCIATION OF CANADA, IGUA AND VECC IN THE ROE CASE [969] EXHIBIT NO. M.3.3: CLIMATE OF 2002 ANNUAL REVIEW, U.S. SUMMARY, NATIONAL CLIMATIC DATA CENTRE, JANUARY 23, 2002 [1183] 12 UNDERTAKINGS 13 UNDERTAKING NO. N.3.1: UNDERTAKING BY MR. ROOT TO PROVIDE HIS MOST RECENT FORECAST FOR TORONTO HEATING DEGREE DAYS FOR 2003 AND 2004 [217] UNDERTAKING NO. N.3.2: TO PROVIDE THE ACTUAL EQUATION FILED WITH THE COEFFICIENTS, THE VARIOUS REGRESSION STATISTICS, ALONG WITH ALL THE REGRESSION STATISTICS: T STATS, F VALUE, DURBAN-WATSON, R SQUARED [240] UNDERTAKING NO. N.3.3: UNION TO UNDERTAKE TO CONFIRM THAT THE DURBAN-WATSON STATISTIC IS A TEST FOR AUTOCORRELATION, AND TO PROVIDE THE SIGNIFICANCE BOUNDARIES OF THAT TEST, IF POSSIBLE [312] UNDERTAKING NO. N.3.4: UNION GAS UNDERTAKES TO PERFORM THE CHOW TEST, ON A BEST-EFFORTS BASIS [354] UNDERTAKING NO. N.3.5: TO PROVIDE THE REGRESSION CALCULATIONS FOR THE 20-YEAR TREND DATA IN MR. FOGWILL'S EVIDENCE [374] UNDERTAKING NO. N.3.6: TO PROVIDE CORRELATION DATA BETWEEN PEARSON AND OTHER WEATHER STATIONS AND STATISTICAL TESTS USED [460] UNDERTAKING NO. N.3.7: TO PRODUCE DOCUMENTS RELATING TO A REVIEW OF WEATHER NORMALIZATION IN 1988 [950] 14 --- Upon commencing at 9:35 a.m. 15 MR. SOMMERVILLE: Please be seated. Thank you. 16 Are there any preliminary matters to be dealt with? 17 MR. PENNY: Just a couple, Mr. Chairman. 18 PRELIMINARY MATTERS: 19 MR. PENNY: There are a number of items that have been distributed and will be sent out to those not present. The first is there's an undertaking response N.2.1 to Mr. Janigan which has been prepared and made available. Then there is a short evidence update in the yellow pages which updates for a small reduction in revenue deficiency as a result of a decrease in capital expenditures, a reduction in property tax, and then an increase of the DSM expenditures as a result of the ADR agreement, and so the text of the evidence explains that, and then the schedules are updated to reflect those three changes. 20 MR. SOMMERVILLE: Thank you. 21 MR. PENNY: And then there is an update to an interrogatory response 7.1 which simply reflects the changes that are in that yellow page evidence update. And then, we discovered that in an answer to a supplemental interrogatory from the City of Kitchener, the first version that was circulated, there were two lines dropped in the printing of it for some reason, so this simply corrects that printing error. 22 MR. SOMMERVILLE: Thank you. 23 MR. PENNY: Those are all the preliminary matters I have. Other than, I can say that Mr. Moran distributed this morning a schedule of updated cross-examination and a tentative witness panel. I understand the intent is that parties will look that, it will be discussed at the break, and then subject to any further suggestion, it would then be finalized and distributed and made available to the Board. 24 MR. SOMMERVILLE: Thank you, Mr. Penny. 25 Preliminary matters from any other party. 26 Welcome back, panel. Nice to see you this morning. Mr. Aiken, I believe we left off with you. Please proceed. 27 UNION GAS LIMITED - PANEL 2; RESUMED; WEAVER, FOGWILL, ROOT 28 A.WEAVER; Previously sworn. 29 A.FOGWILL; Previously sworn. 30 S.ROOT; Previously sworn. 31 CROSS-EXAMINATION BY MR. AIKEN: 32 MR. AIKEN: Good morning, panel. My name is Randy Aiken. I'm consultant to two intervenors in this case; the London Property Management Association, which is an association that represents residential property managers and owners, and the Wholesale Gas Services Purchasers Group, which are small gas utilities that take a wholesale service off the Union system. 33 First, I guess we need to have this material marked as an exhibit. I believe the Board has that. It's labeled "LPMA/WGSPG Cross-examination Materials 1." 34 MR. SOMMERVILLE: I now have it. Thank you. 35 MR. MORAN: Mr. Chair, this would become Exhibit M.3.1, document entitled "LPMA/WGSPG Cross-examination Materials 1." 36 MR. SOMMERVILLE: Thank you, Mr. Moran. 37 EXHIBIT NO. M.3.1: LPMA/WGSPG CROSS-EXAMINATION MATERIALS 1 38 MR. AIKEN: I'd like to start with you this morning, Dr. Weaver. 39 Could you turn to tab 1 of this book of materials. There you'll find a newspaper article from the Philadelphia Inquirer dated December 8th, 2002. I've marked a number of paragraphs and I just want to get your comments on some of these statements. At the top of the page, and I'll read this into the record so that it's clear: 40 "Scientists have been warning that the earth is slowly heating up, that the recent run of gentle winters in the United States is no fluke, but the warm-up to the big meltdown. Now, however, comes the chilling prediction from some of the same experts. Before the climate gets balmier, they say, it could take a sudden turn toward the frigid and stay that way for decades, if not centuries." 41 What is your overall comment on that statement? 42 DR. WEAVER: It's media sensationalism. 43 MR. AIKEN: If you go to the next marked paragraph that starts: "If the build up continues..." 44 Can you explain this gulf-stream phenomena that they describe? 45 DR. WEAVER: Yes, I know this article very well. I was actually interviewed as part of this article. I was quoted once at the end and other words attributed to me were also assigned in this article. 46 This article is systematic of the problem of scientists dealing with the media, is that the media is charged with selling papers to readers, and hence, like to attract readers to the particular stories. Science that is not sensational tend not to make it into the media. Scientific statements that are tend to make it front and center. 47 Now, if I could explain, the issue here goes back -- this is an area that I work on, I've been working on since at least the 1990s. This is an area that I co-chair the international committee that is responsible for looking at this. This is the WCRP Clivar/Pages Intersection Panel. 48 What it's talking about when it says the gulf stream is really a component of the gulf stream known as the thermohaline circulation that the people are referring to. That is a component that is a global phenomenon, and it's associated with the conversion in high North Atlantic latitudes of surface waters to deep waters; that is, as these waters, some of which come from the gulf stream, flow northwards, as they cool they become heavier and as they become heavier, they sink. 49 The process by which water is moving northward is brining heat northward. So that if one compares the temperatures of the North Atlantic Ocean with similar temperatures of the North Pacific, you find that the North Atlantic is warmer because this process known as deep-water formation occurs in the North Atlantic and not in the North Pacific. 50 So what has come about here is people have looked in the archival records, the proxy records, the paleoclimate records and there is a lot of evidence that in the North Atlantic there have been what are known as abrupt climate changes; that is, rapid change in the intensity of the process of formation of deep waters, that is, the conversion of surface waters to deep waters, on the time scale of decades. 51 Now, some who are not working in the area of climate physics tend to then suggest that this is also a possibility as a consequence of global warming. The difference, first of all, a climate dynamicist would point out, that you cannot make statements about climate variability in a climate which is fundamentally different from another climate; that is, the mechanism for the abrupt climate change that existed in glacial times is associated with an interaction between the ice sheets that surrounded the North Atlantic and the North Atlantic Ocean. There are no ice sheets surrounding the North Atlantic now so that same mechanism cannot apply at present. 52 What people have tried to argue, and I can give you the history of this because I think it's very important, people have argued that under a global warming scenario, it is possible and it is likely that high latitude precipitation will increase. Then the train of thought goes that this high latitude precipitation will increase run-off into the North Atlantic, which will then make the surface waters of the North Atlantic fresher; and when fresh water is lighter than salt water, it won't sink as much, and hence, the catastrophic predictions that the media love of this of this climate change. 53 Now, problem number 1, every single climate model in the world, that's even the outliers, none of them show a collapse of the overturning this century, not one. 54 Number 2 problem with this, even those models where you induce a collapse, that is, you artificially dump a huge amount of fresh water into the North Atlantic such as the fresh water that would be associated with an armada of icebergs coming in glacial times, even when you do that, it still warms, and the reason why it still warms is because you're increasing the radiative forcing associated with increasing greenhouse gases. 55 Now, where this newspaper article came about from, it's very important, and again, I have publicly gone on record in public seminars, I actually address this because I have been misquoted perhaps a dozen times on this particular issue with reporters who have a story to write, and in writing a story they take a selected number of quotes hither and wither and put together the story. This issue of global warming causing an ice age dates back to a New Scientist article in 1997 entitled "Ice Cold in Paris." At that time, it got very little media sensationalism. 56 However, in 1998, in the Atlantic Monthly, which is a popular magazine on the east coast of the U.S., a fellow, not a scientist working in the area, named William Calvin wrote a piece called "The Great Climate Flip-flop." In this piece, which had enormous media coverage, he argued that global warm will give you ice cold conditions. 57 Now, the media loved this. It appeared everywhere. In fact, the scientists working in the area called this a virus. How do you contain this? This is not coming from the scientific community, it's coming from William Calvin, who my understanding is a neuroscientist, not a climate scientist. 58 I was asked to provide comments on earlier drafts of this document, as were a number of other scientists. I said in my review of his document, which is not reviewed formally, just informally, You cannot say this. I was thanked in the acknowledgments for my comments but my comments were ignored. 59 So then this went away as an issue until April 2002, when The New York Times published opinion editorial piece by Terry Joyce entitled "The Heat Before the Cold." Now, the first thing I would like to mention is science is not conducted through the opinion editorial pages of a newspaper. It is just not done that way, and I don't think many -- well, some might like to do it that way, but that's not how science is done. 60 This article in April 2002, this opinion editorial in The New York Times was picked up by the Discover magazine where a staff reporter wrote an article called "A New Ice Age." It's getting carried away now because now the national newspapers, like the National Post in Canada, in October 2002, published an article called "Rumble of a Coming Ice Age," and then the Vancouver Province and local newspapers picked up on that. 61 So what happens is it's like a virus that gets out of containment, one ophead in the New York Times, not reviewed, gets picked up by a popular magazine like Discover, then the National Post and other newspapers pick up the article from a popular magazine, and then the local newspapers pick up the article from the national newspapers and then everyone suddenly starts thinking that global warming can cause an ice age. It is utter, unadulterated nonsense, and I'll leave it there. 62 MR. AIKEN: Are you familiar with the Woods Hole Oceanographic Institution that's mentioned in the second paragraph down? 63 DR. WEAVER: Very well. 64 MR. AIKEN: What is your opinion of their research work? 65 DR. WEAVER: There's an outstanding group of scientists in the Woods Hole. They are world-leading oceanographers, yes. 66 MR. AIKEN: On the last page this is where you're quoted or not quoted -- 67 DR. WEAVER: I'm not quoted. 68 MR. AIKEN: Do you believe the gulf stream is slowing down? And if so, does it have any impact? 69 DR. WEAVER: I would have never said that the gulf stream is slowing down because that is scientifically inaccurate. What I would have said is that there is some evidence from in-situ observations, that means observations conducted in sight is that the amount of water flowing through Denmark Strait has reduced a little bit. There are some studies that have suggested that there is a slight weakening in terms of the strength, yes, of the overturning or the thermal hayline circulation component of the gulf stream, not the gulf stream per se. The gulf stream is a phenomena that's occurring at a latitude of Cape Hateris and Halifax. It's not what's happening in the North Atlantic. 70 I would have never said anything about the gulf stream. It would have been about what's observed in and around Denmark Strait and Norway. 71 MR. AIKEN: On the second page, page 2 of 3, third last paragraph that starts with the paragraph, "Large, abrupt and widespread climate changes," my question there is can you briefly summarize the National Research Council's committee on abrupt climate change. 72 DR. WEAVER: Yes, I was a reviewer of that document and I was on the committee that actually put the people together that wrote the document. I know that document very well. 73 That document was assessing basically the -- what we know about abrupt climate change. I've also written articles in this area. Most of that was discussing the abrupt climate change in the past; that is, again, going back to my earlier testimony, that is a time when ice sheets were around the North Atlantic. It's a fascinating issue but it's an issue that, you know, is not particularly relevant to what's going on right now. 74 MR. AIKEN: Okay. Now, if I could take you to tab 2, which is an article by this Terrence Joyce I think that you referenced earlier. 75 DR. WEAVER: Yes. 76 MR. AIKEN: Again from the Woods Hole Oceanographic Institution. 77 DR. WEAVER: Yes. 78 MR. AIKEN: Bottom of page 1, top of page 2, I won't bother reading it at all -- well, actually I will. It says: 79 "Evidence has mounted that global warming began in the last century and that humans may be in part responsible. Both the Intergovernmental Panel on Climate Change (IPCC) and the US National Academy of Sciences concur. Computer models are being used to predict climate change under different scenarios of greenhouse forcing and the Kyoto Protocol advocates active measures to reduce CO2 emissions which contribute to warming. Thinking is centered around slow changes to our climate and how they," which contribute to warming, "and how they will affect humans and the habitability of our plant. Yet the thinking is flawed: It ignores the well-established fact that Earth's climate has changed rapidly in the past and could change rapidly in the future. The issue centers around the paradox that global warming could instigate a new Little Ice Age in the northern hemisphere." 80 I take it from your earlier comments that you would disagree with this. 81 DR. WEAVER: This is not a scientific article, I would like that on record. This is words or an article appearing on a web site. It's very different. A scientific article requires that it goes through peer review. This is like an extended opinion editorial piece. It is the opinion of an individual and it would not be viewed as -- going through the normal scientific rigorous process. 82 As soon as I see the words "Kyoto protocol" in a piece like this, I begin to think political agenda. I don't know why scientists would feel that they would need to make reference to the Kyoto protocol in a piece discussing climate change unless they have made an opinion about that particular protocol. 83 The actual scientific statements, as I point out, are irrelevant, that is, abrupt climate change in glacial times is not applicable to what's happening today. 84 MR. AIKEN: And that's your opinion? 85 DR. WEAVER: That's more than my opinion. That's the opinion, I would suggest, would be a widespread opinion of the scientific community. 86 I have been asked by many people and many other people have similar concerns about trying to stop this virus which is spreading by the media in terms of global warming creating an ice age. It is nothing more than media-driven hysteria fed by a few individuals with particular opinions on particular issues. 87 MR. AIKEN: If you go to the last page of that article, page 8 of 8, and about halfway down the last paragraph, the statement is -- 88 MR. PENNY: Sorry, this is in the paragraph that starts, "Researchers are always telling you that more research funding is needed and we're not any different." 89 MR. AIKEN: That's correct. 90 MR. PENNY: Thank you. 91 MR. AIKEN: My understanding is the Woods Hole Institute is an independently-funded research institute; is that correct? 92 DR. WEAVER: That's -- well it's correct and incorrect. They rely on government funding to do their oceanographic research, in particular, organizations like the NSF, National Science Foundation, The Office of Naval Research, NOAA which is National Oceanic and Atmospheric Administration, and so on and so forth. They would be like -- it's a different system from Canada. They rely 100 percent on what is called soft money; that is, they have to bring in their own salaries through writing research grant proposals to do the research that they want to do. 93 In Canada, in academic institutions, our salaries are typically paid for by the governments, provincial governments, with federal funding, and with student fees, and research grant funding pays to do the research we wish to do directly, but not our salaries. In the U.S. you must also bring in your salaries, in institutions like Woods Hole. 94 MR. AIKEN: Six lines down that paragraph, the sentence starts: 95 "It is that global climate is moving in a direction that makes abrupt climate change more probable, that these dynamics lie beyond the capability of many of the models used in IPCC reports, and the consequences of ignoring this may be large." 96 What's your comment on that? 97 DR. WEAVER: My comment on that is, first of all, all those models whose results are assessed in the IPCC reports can give you abrupt climate change. This is an incorrect statement. Climate models give you abrupt climate change if you force them with the appropriate forcing; that is, if you dump fresh water from ice sheets into the North Atlantic, you cause abrupt climate change. The fact that it doesn't agree with their preconception here that global warming will give you abrupt climate change is something that's not mentioned; that is, the same model will give you abrupt climate change in the past but doesn't give you it in the future. So this, I would argue, is unsupported speculation and it may be the opinion of the author or authors of this report. 98 MR. AIKEN: Moving on to tab 3, this is probably the article you referred to from Discover magazine entitled "The New Ice Age." At the bottom of page 1 and top of page 2 specifically, it talks about that: 99 "The next cooling trend could drop average temperatures 5 degrees Fahrenheit over much of the United States and 10 degrees in the Northeast, Northern Europe, Northern Asia." And this "could happen in 10 years." 100 Again, this is a quote from Terrence Joyce from Woods Hole. 101 Again, I would take it you would disagree with this? This is his opinion only. 102 DR. WEAVER: First of all, Terrence Joyce is only quoted as saying "It could happen in 10 years." I don't see Terrence Joyce is quoted on the others. That's paraphrased. He's not quoted -- he doesn't say that, the staff writer says that. Let me just say that it is unadulterated nonsense. 103 At the risk of being repetitive, I have already testified earlier that we are talking about a 2 degree warming in this century, and all of these previous variabilities that have occurred in the last 10,000 years have only contributed maximally to .5 degree, half a degree globally. So even if you get the kind of changes that they're advocating, as you can show quantitatively, and as I have shown when I give talks on climate change, this process of changing the thermohaline circulation in the North Atlantic, all it does is make the warming not as much as it would otherwise be if the thermohaline circulation does not change as the climate warms. 104 I mean, it has catastrophic effects on the ecology of the North Atlantic Ocean, but it will not cause a new ice age. 105 MR. AIKEN: Is your opinion that what they're saying in these articles is, in fact, a new ice age, not just a cooling period? 106 DR. WEAVER: The title of the article is "The New Ice Age." 107 MR. AIKEN: Does that mean that the article is about a new ice age or, as you state in your opinion about newspaper articles, it's -- 108 MR. PENNY: Sorry, with respect, Mr. Chairman, the article says what it says. What's the point of using up our time sparring about it? I mean, we can all read it. Dr. Weaver has expressed his opinion on the statement. 109 MR. AIKEN: That's fine. I'll move on to page 4. 110 MR. SOMMERVILLE: Thank you, Mr. Aiken. 111 MR. AIKEN: The third paragraph down starts with a quote: 112 "You have all this fresh water sitting at high latitudes..." 113 This is a direct quote from Mr. Joyce and here there's a quantification: 114 "So while the globe as a whole gets warmer by tiny fractions of 1 degree Fahrenheit annually, the North Atlantic region could, in a decade, get up to 10 degrees colder. What worries researchers at Woods Hole is that history is on the side of rapid shutdown. They know it has happened before." 115 Again, I'm assuming this is on the ice age, this is a hundred thousand years ago or more. 116 DR. WEAVER: Right, it occurred a hundred thousand years ago when the North Atlantic was surrounded by ice. It hasn't occurred in the last 10,000 years. The only time that we can actually make a comparable comparison with today -- it's irrelevant to talk about what happened 100,000 years ago when the earth is surrounded by ice. 117 I feel I'm being repetitive, and I apologize, but the same question has been asked approximately a dozen times. 118 MR. PENNY: I think that is a fair comment, Mr. Chairman. I'm not sure that it's assisting the process for Mr. Aiken to just keep putting basically the same propositions to the witness and ask him to comment on it. 119 MR. SOMMERVILLE: Proceed, Mr. Aiken. It does seem as though Dr. Weaver has presented a fairly vivid opinion with respect to the points of view expressed in this series of articles. I don't want to unduly restrain you, but I think the difference in the points of view expressed in the articles and Dr. Weaver have been fairly clearly drawn. 120 MR. AIKEN: Thank you, Mr. Chairman. 121 If I could go on to tab 4, then. This relates to your comment yesterday about the difference in regional temperatures versus the global warming. 122 Page 2 of 11, at the top there's a statement that says that "even as the earth as a whole continues to warm gradually, large regions may experience a precipitous and disruptive shift into colder climates." 123 Do you agree that that's possible? 124 DR. WEAVER: First of all, this article is written by the president of Woods Hole, entitled "Abrupt Climate Change." Again, it is not a scientific article. I think it's important that that distinction be made. It has not gone through the peer-review process. I would have felt far more comfortable discussing publications that appear in scientific journals, rather than pieces on web sites and newspaper articles. 125 Again, I have said, again many times, of course I disagree with that. This is going back to the erroneous comparison of what happened in the ice age times with what's happening in the present. It's more of the same question. 126 "Even as the earth continues to warm gradually large regions may experience a precipitous and disruptive shift in colder climates." 127 It's the same thing as before. 128 MR. AIKEN: But isn't that something that you agreed to yesterday on a regional basis, that there's a possibility that for any given region, the change may be different than the global average? 129 DR. WEAVER: Yes, but I did not say "experience precipitous and disruptive shifts." I would never have used such words. 130 MR. AIKEN: Okay, I accept that. 131 DR. WEAVER: I have said that regional climate changes can be different from the global average, yes. 132 MR. AIKEN: Okay. Finally, then, on page 5 of 11, at the third paragraph, there's reference made to computer models. Are you familiar with these models? 133 DR. WEAVER: Yes. I've developed them myself and run them myself. 134 MR. AIKEN: And do you agree with the 3- to 5-degree range that they list there? 135 DR. WEAVER: I'd like to read the whole paragraph before I make a statement. 136 MR. AIKEN: Sure. 137 DR. WEAVER: Okay. What statement I will agree with is that directly above the region of North Atlantic deep-water formation; that is, directly over the ocean in and around Iceland, you could get cooling of 3 to 5 degrees, assuming that you do nothing to greenhouse gases and assuming you instantaneously shut down the overturning. The rest of that program is nonsense about Eastern United States worst winters on records and all that sort of stuff. 138 I have conducted these experiments. If I had my computer here, which I don't, I could give a seminar on this and could show you the results of doing precisely the experiment that is done here. What happens -- and I could summarize briefly. 139 If you take the present day and you do all other things being equal and you dump an enormous amount of fresh water, which is not possible to do given there's no ice sheets around the Atlantic, but suppose you do it anyway and you shut down the overturning, then you get a cooling relative to today immediately over the area of where the deep water forms and downstream, that's important, not upstream, you're not getting cold going over North America, it's downstream over the western flanks of Europe. But the reality of the situation is twofold: One, there is no fresh water that can cause that to occur instantly; two, you're increasing the greenhouse gases so you are increasing the radiative forcing such that at the year 2100, if we were to shut down the conveyor through the exact same experiment, it would still be warmer in Europe but not as warm as it would be if you didn't shut down the conveyor. That is the bottom line the radiative forcing associated with greenhouse gases warms the planet, and the shutdown of the conveyor in the North Atlantic acts as a local feedback to suppress the amount of warming over the ocean in the North Atlantic and downstream over Europe. End of story. 140 MR. AIKEN: You'll be happy to know I'm finished with these articles now. 141 DR. WEAVER: I am. 142 MR. AIKEN: A couple more questions for you, Dr. Weaver. 143 First of all, do you believe that the weather, in addition to gradually warming on a global basis, is becoming more volatile, more variable? 144 DR. WEAVER: That's a loaded question. Loaded in -- I don't mean that. It's a question I get asked a lot and it's a question that it is very difficult to respond to. 145 Now, what can I tell you scientifically? I can tell you that the data record over much of Canada, not over the prairies, is such that there has been more extreme precipitation events occurring this century. That data is supported. It is not -- there are not long enough data records to talk about frequency of occurrence of droughts because you need great long records to actually do this. I'm not going to give you an opinion that weather is more variable than before simply because I could not back that up scientifically. I could with respect to extreme precipitation over Canada, but I can't in terms of storms, tornados, thunderstorms, hurricanes or anything like that. 146 MR. ROOT: Mr. Aiken, I might suggest from my background and my experience, not looking at climate but looking at weather which is entirely different in terms of time scales, from my experience, because of these things such as global warming, in the most recent events, say the last 20 years, I am seeing in my frame of reference across North America a greater tendency to observe extreme weather events, whether that be in temperature or precipitation or severe weather. In my opinion, we are seeing weather events on a short time scale that are more extreme. 147 MR. AIKEN: So I take it, then, that we'd be more likely to see extremes with respect to temperatures in particular, in other words, you could have a very cold winter followed by a very warm winter or vice versa 148 DR. WEAVER: No. I would agree with -- I mean my gut feeling is what Mr. Root said, but I couldn't back that up because I don't look all these events like Mr. Root does. But I can say scientifically that that statement that you made is incorrect. In a warming trend, what you get is -- there's more likelihood of extreme warm periods and less likelihood of extreme cool periods. So, yes, more extreme events, but that's on the warm side, not on the cold side. The increased likelihood of extreme events is on the warm side and a decreased likelihood of cold side. 149 If you take a -- I mean, if you can bear with me, you have a probability distribution function. What that means is you have a likelihood of occurrence of a particular event. So out on the tails you're very unlikely; in the middle it's very likely. What you do under climate change is you shift that warmer, that is, you have increased likelihood of the extreme warmth, and now it's even warmer, and you still have -- you still have this unlikely probability, which is the extreme cold event, but that extreme cold event is now much warmer than it was in the past. You're shifting this distribution to a warmer mean. So increased likelihood of warmth, decreased likelihood of cold. 150 MR. ROOT: I might also add that we're talking about time scales that are much shorter in terms when we talk about weather. I'm talking about daily events or two or three days and not necessarily -- certainly not the entire winter season. 151 MR. AIKEN: I guess to both you, Mr. Root and Dr. Weaver, do you believe that any natural gas rate-setting methodology that's approved by this Board needs to recognize not only the increase in the average temperature but also the increase in the volatility or the variability that that may be accompanied by? Or if that's outside your area of expertise -- 152 DR. WEAVER: Well, I can comment on -- I don't want to comment on the rate-setting because that's not my area and I don't feel comfortable talking about how you set rates and that for gas. Frankly, I don't know and I don't care. What I do care about is what is the best way of representing what will happen in terms of temperature. 153 If you were to make -- I mean what we do know with a very high degree of confidence is that the temperatures are warming, because we know why. So if you're going to try to fit a line through existing data and you want to use that line in future data to look at temperature, the best thing to do would be to use a trend. I mean, that is very, very simple -- a simple technique, very simple. However, if there's an increased likelihood of extreme events on the warm side and decreased likelihood of extreme on the cold side, I would have thought that the trend would capture that because what you're able to say with a good degree of confidence in is how the mean of that probability distribution shifts. Where we have much more difficulty is saying how the tail ex -- of that distribution expands or contracts. 154 Therefore, it's very difficult to make a scientific statement as to how the shape of the distribution will change, but it's much easier to say how the distribution would shift in itself. Therefore, as a first order best estimate, I would be trying to approximate how the distribution is moving, i.e., looking at the trend. 155 MR. ROOT: I, as well, feel uncomfortable in talking about financial matters. At my house, I leave that to my wife. 156 MR. AIKEN: Smart man. 157 MR. ROOT: I'm sorry? 158 MR. AIKEN: Smart man. 159 MR. ROOT: I know for a fact from my experience that because of the events that we're seeing today that there is an increase in the likelihood of extreme weather events, and I have found successes in my application, in my business, in recognizing those events and responding accordingly. As a result, as you compare a 30-year average to a 20-year trend, the 20-year trend has a greater likelihood of recognizing certain events and allowing you to mitigate the volatility or the risk that may be associated with those changes. And that would be my testimony, is to consider the ability of a program to recognize extreme events and quick changes, and react accordingly. 160 MR. AIKEN: Thank you. I'm now moving on to probably Mr. Fogwill. 161 I'm looking at the first appendix in the evidence, which I guess is -- the evidence dated June 25th, 2002, appendix -- sorry, page 4 of 31, paragraph 14. And I'll also be referring to appendix C in just a moment. 162 Do you have that, Mr. Fogwill? 163 MR. FOGWILL: Yes, I do. 164 MR. AIKEN: There's a reference made there in paragraph 14 to "Consistently overestimating the heating demand by 7.6 percent". Is this the same 7.6 percent mean error that's shown in appendix C for the 30-year average? Is that where that number was derived from? 165 MR. FOGWILL: Yes. Yes, it is. 166 MR. AIKEN: So, in effect, you're assuming an elasticity of 1, a 1 percent error in heating degree days translates into 1 percent error in the volumes. 167 MR. FOGWILL: Yes, in this case that's correct. 168 MR. AIKEN: Then if you could turn up Exhibit C.1, tab 1, appendix A, page 2, and starting at line 10 on that page, it says that: 169 "A 10 percent change in the number of heating degree days will change residential consumption by approximately 7 percent, commercial consumption by 7 to 8 percent, and industrial consumption by approximately 1 percent." 170 I'm assuming this refers only to the general service volumes, as did your comment in the previous paragraph. So what is the difference between these elasticities and the elasticity of the one you just gave me. 171 MR. FOGWILL: Well, you have to keep in mind that the two pieces of evidence that are here are separated by a couple of years of information. The original piece was produced over a year and a half ago, and we were using a rule of thumb to actually develop that estimate. What we have in the forecast piece is a more rigorous assessment of what the impact is. 172 MR. AIKEN: Going back to D.1, tab 4, appendix A, and this would be the bottom of page 7, top of page 8, the evidence states that: 173 "The revenue factor of a 1 percent variance in the heating degree days is a change of approximately $3.5 million in annual delivery revenue." 174 Given your comment, would I be correct in assuming that number is actually lower now -- 175 MR. FOGWILL: That's correct. 176 MR. AIKEN: -- based on -- 177 Could you provide what would that number would be under your current economic scenario and forecast? 178 MR. FOGWILL: It's probably closer to the $3 million. And the forecasting panel would be able to go into that in more detail, but it's around, I would say, $3 million. 179 MR. AIKEN: And that's pretax, not after the tax. 180 MR. FOGWILL: That's delivery revenues. 181 MR. AIKEN: So that's pretax, okay. Maybe I need to pursue this with the forecasting panel, but even at a $3 million level, what assumptions were made in terms of the monthly fixed charge? When this evidence would have been originally done, I think your fixed charge would have been $7.50 a month, it's currently $10, and your proposal is to change that to $14. That would have a significant impact, a reduction, I would think, on the variability of that revenue. 182 MR. FOGWILL: I think you're correct in wanting to address that to the forecasting panel. 183 MR. AIKEN: Okay. I want to ask a couple of brief questions on table 1 on page 8 and the response found in Exhibit J.26-35. I'm assuming that these actual heating degree days are for Pearson Airport? 184 MR. FOGWILL: Yes, they are. 185 MR. AIKEN: These actual figures, and I'm just looking at the actual columns in both cases, are different between table 1 and in J.26-35, in 1985 through 2001. These differences are relatively small, two or three degree days. Can you explain what the reason for this is? 186 MR. FOGWILL: It would be more updated information. Sometimes we get corrections in the information that we receive from Environment Canada. 187 MR. AIKEN: Even back to 1985? 188 MR. FOGWILL: That's my understanding, yes. 189 MR. AIKEN: And then these corrections would also -- these updates would also reflect the larger differences found in the 2000 and 2001 data. The changes there are, I believe, 24 and 34 heating degree days. 190 MR. FOGWILL: That's correct. That's correct. 191 MR. AIKEN: Okay. 192 Mr. Root, this is probably for you. The WeatherBank forecast that is in appendix B, dated, I believe, June 2002, contained a forecast of heating degree days for Toronto of 3,393 for 2003 and 2,875 for 2004. Can you provide your most recent forecast for these two years, including actuals, of course, for 2003? 193 MR. ROOT: Can you tell me what page you're referring to? 194 MR. AIKEN: I believe it was page 12, but I'll check. Yes, page 12 of 22. 195 MR. ROOT: I'm looking at the bottom of page 12, and I'm assuming that you're discussing the forecast that we made for annual heating degree days; is that correct? 196 MR. AIKEN: Yes. It's the little table there that has a year, an annual HDD, and a description. 197 MR. ROOT: Yes. 198 MR. AIKEN: Yes. 199 MR. ROOT: Can you repeat the question now. 200 MR. AIKEN: Yes. Can you provide an update to the 2003 and 2004 heating degree day forecast? 201 MR. ROOT: I don't know if I can at this time. Our forecasting technology is constantly changing and I would imagine I could go back and hindcast a situation. Is that what you're asking me to do? 202 MR. AIKEN: No. I'm asking you to find out what your most recent forecast is. 203 MR. ROOT: My most recent forecast would not be for any year not today. 204 MR. AIKEN: So you haven't done a forecast for Toronto heating degree days after June of 2002? 205 MR. ROOT: No, I have -- 206 MR. AIKEN: Sorry, I'm asking for your most recent forecast that you've done. I'm not asking you to do a forecast today. 207 MR. ROOT: Okay. Let me see if I understand what you're asking for. Assuming that I did continue to make forecasts for Toronto, and I did, what would those updated forecasts be? 208 MR. AIKEN: Yes. What is the most recent forecast that you've done? 209 MR. ROOT: I'd have to go back and compile that data. I do have it, but I don't have it with me today. 210 MR. AIKEN: Would that be difficult to do? 211 MR. ROOT: No. 212 MR. AIKEN: Mr. Chairman, could I have that as an undertaking, please? 213 MR. SOMMERVILLE: Yes. 214 MR. MORAN: Mr. Chair, that will become Undertaking N.3.1, undertaking by Mr. Root to provide his most recent forecast for Toronto heating degree days. 215 MR. SOMMERVILLE: For 2003 and 2004; is that right, Mr. Aiken? 216 MR. AIKEN: Yes. 217 UNDERTAKING NO. N.3.1: UNDERTAKING BY MR. ROOT TO PROVIDE HIS MOST RECENT FORECAST FOR TORONTO HEATING DEGREE DAYS FOR 2003 AND 2004 218 MR. ROOT: Let me clarify at what point, since we're still obviously in 2003, at what point would you like the forecast for the balance of 2003, the last one? 219 MR. AIKEN: Yes, the last one. Just identify how many months of actuals that would include. 220 MR. ROOT: I'll do so. 221 MR. SOMMERVILLE: Just so that I'm clear about this, you're not asking the witness to perform a new forecast. As I understand it, Mr. Aiken, you're asking the witness to produce his most recent forecast respecting Toronto heating degree days 2003, 2004. 222 MR. AIKEN: That's correct. I just want an update to his evidence, yes. 223 MR. SOMMERVILLE: But not by way of a new forecast, by way of an existing forecast that he's already done. 224 MR. AIKEN: That's correct, yes. 225 MR. ROOT: By way of further clarification, those forecasts are updated monthly. Essentially you're going to be getting a forecast that was updated about the last week of September, roughly two weeks ago. 226 MR. AIKEN: That's fine. 227 MR. ROOT: Okay. 228 MR. SOMMERVILLE: Thank you, Mr. Root. 229 MR. AIKEN: Mr. Fogwill, if you could turn to Exhibit J.18.79. This is an interrogatory for the LPMA. 230 MR. SOMMERVILLE: 18 point? 231 MR. AIKEN: 79. 232 MR. SOMMERVILLE: Thank you. 233 MR. FOGWILL: I've got it. 234 MR. AIKEN: In part A, the interrogatory asks for the most recent equation that were updated for the 2002 actual weather information for each of the seven methodologies. The answer specific to the trend equations provided a formula, linear regression of X1 to X whatever. My question is: Why was not the actual equation filed with the coefficients, the various regression statistics? 235 MR. FOGWILL: Well, it was just my understanding of what the question was asking for. 236 MR. AIKEN: Would you undertake to file that actual equation? 237 MR. FOGWILL: Yes. That's not a problem. 238 MR. AIKEN: Along with all the regression statistics, T stats, F value, Durban-Watson, R squared. 239 MR. MORAN: Mr. Chair, that becomes Undertaking N.3.2. 240 UNDERTAKING NO. N.3.2: TO PROVIDE THE ACTUAL EQUATION FILED WITH THE COEFFICIENTS, THE VARIOUS REGRESSION STATISTICS, ALONG WITH ALL THE REGRESSION STATISTICS: T STATS, F VALUE, DURBAN-WATSON, R SQUARED 241 MR. PENNY: Mr. Chair, we're going to need simultaneous translation. 242 MR. AIKEN: Mr. Chair, we'll be delving into that shortly. 243 In the absence of having the actual 20-year equations to look at, I've attempted to replicate it and I've used the heating degree days data from Exhibit J.26.35 that we just talked about a moment ago. And this is found at tab 9 of my cross-examination material, at the top of that page. Do you have that? 244 MR. FOGWILL: I have that. 245 MR. AIKEN: Is my attempt close to what your equation was? 246 MR. FOGWILL: I don't recall all the elements of the equation so I can't really confirm at this point whether that's correct or not. But it looks reasonable. 247 MR. AIKEN: And about a third of the way down that page you'll see it says, "series" right under that 2004, and there's a number to the right of that of 3,602. 248 MR. FOGWILL: Yes, I do. 249 MR. AIKEN: And that forecast was made by that equation and that's chose to your forecast, which I believe is 3,606 heating degree days. That is from J.18.79, page 2. 250 MR. FOGWILL: Yes. 251 MR. AIKEN: I'd like to review some of the statistics from this equation with the caveat, of course, that this is my equation, not yours. But I just wanted to get some of your comments on the various statistics on the record. 252 The T statistic, and this is the number in brackets, it's in brackets, 2.65351, and then following that, 2.85296. Sorry, it's not labeled T stat, it's just in the brackets, below the coefficient stats. 253 MR. FOGWILL: Yes. 254 MR. AIKEN: Can you explain to me what those T statistics represent? 255 MR. FOGWILL: In general terms, they would represent the significance of the variables in the equation. But it's an area I haven't dealt with in any particular detail. I think it would probably be more instructive to look at it on an overall basis. 256 Considering that you've got an equation there in terms of what you would define the alternative method, it does appear to be more statistically significant or afit to the data that's in existence. But the key here is that what we're looking at is how the methods fit over time, and it actually goes to a point that we were discussing yesterday, which is the predictability of the