New technology, not "punitive measures," is the best way to help oil and gas companies in Canada reduce pollution, an Alberta oil executive told a special legislative committee on Tuesday.

Gordon Lambert, vice-president, sustainable development for Suncor Energy Inc., said the federal government should set up a new technology fund to help oil and gas companies develop innovative ways to reduce emissions of greenhouse gases.

"We do have a significant dilemma before us," he told a special legislative committee studying Bill C-30, Canada's Clean Air Act, in Ottawa.

"On the one hand, we want abundant clean energy. On the other other, we want to protect the environment. The only way to square that circle is through new technology.

"We are looking for all kinds of policies and partnerships with government to enable us to get there. What's going to work is not punitive measures, but collaborative efforts."

He said new technology includes what is known as carbon capture, in which carbon dioxide is taken out of emissions and stored instead of being released into the atmosphere.

It also includes geological sequestration, in which the carbon dioxide is injected directly into underground geological formations.

Lambert, a witness who appeared before the committee, said the danger with regulations, especially if steep targets are imposed without much notice, is that they would erode confidence, prompting investors to "exit the industry" and take their capital elsewhere.

Lambert told the committee that it costs $20 to $30 to produce a barrel of oil in Alberta, whereas it costs $2 to $3 to produce a barrel of oil in Saudi Arabia.

Francis Scarpaleggia, a Quebec Liberal MP on the committee, said that he was lukewarm to the idea of a technology fund and that there is real need for immediate targets instead of more consultation with industry groups. He said the previous Liberal government consulted the industry already.

"I get the sense that we are into avoidance," he said. "The message I hear from a lot of industry sectors is leave us alone. It's like we can't do anything unless we are giving you money to develop new technology."

Matthew Bramley, director of climate change for the Pembina Institute, told the committee that the government needs a "climate change plan," not a single bill to address the huge problem of greenhouse gas emissions.

"I'm certainly troubled that the federal government does not have a comprehensive plan," he said. "A climate change plan would have to be simply more than a bill."

Targets needed to force emissions cuts: Bramley

Bramley said strict regulations in the form of targets are needed to force industry into cutting emissions of greenhouse gases and aggressively pursuing new technology to comply with the law.

He said Bill C-30 is a "series of technical amendments" to a number of laws, not an overall plan.

"We need targets that are easily understandable by anyone. If we set absolute targets, it should be clear that what those are and what those mean," he said.

The proposed legislation, designed to deal with greenhouse gas emissions and air pollutants, sets absolute targets for reduction of greenhouse gas emissions at between 45 and 65 per cent lower than 2003 levels by 2050.

The bill passed first reading in the House of Commons on Oct. 19, 2006. The committee is studying the bill and hearing from witnesses before it reworks it.

Michael Cleland, president of the Canadian Gas Association, told the committee that the government needs to develop policy that would push the industry "in the right direction in a steady gradual way" to avoid a "sharp shock" to investors.

The government also needs to look at the demand side of oil and gas production, Cleland said. It should try to reduce demand by bringing in policies to transform Canadian communities over the next 50 years to make them more energy efficient, he said.

Nathan Cullen, an NDP MP from B.C. on the committee, said: "When I hear the testimony today, it sounds like we have the luxury of time."