Canadian Gas Association open response to TVO Piece by John Michael McGrath “Infrastructure Outlives Us All”

John Michael McGrath suggests the recent decision by Berkeley City Council to ban new natural gas connections echoes the wisdom of great planners of the past. I strongly disagree. The Berkeley decision is not about building infrastructure for the ages. It is a short-sighted action with very negative implications for the well-being of many today and in the future.

First, some context on natural gas distribution. It is itself ancient. The Chinese tapped natural methane supplies for lighting in their imperial city over 1,000 years ago. Methane (CH4) is the principal ingredient in what we call natural gas, and it has four hydrogen atoms for every carbon atom. This means it is a remarkably simple but energy-intensive molecule: one that has delivered to date, and promises more, extraordinary benefit. It is a source for energy needs both direct and indirect – for heating and cooling, hot water, cooking, transport, electricity – and it is a key input for manufacturing, industry, and critical sectors like fertilizer for agriculture. It is widely available: at current consumption levels, Canada’s resources can provide natural gas to Canadians for 200 years. It is affordable – in almost every application much more affordable than electricity. Natural gas use for space and water heating represents a saving for the average Canadian homeowner of as much as $2,000 per year over alternatives. At a time when families are said to be within a few hundred dollars of breaking even in Canada, this is a very, very significant advantage. In addition, natural gas infrastructure is incredibly reliable – and usually more resilient in severe weather than electric systems.

Given the benefits, it is no surprise that we have steadily increased our customer base for natural gas in Canada over decades. At present it represents roughly 35 per cent of Canadian energy end use, with the National Energy Board predicting this will grow to almost 40 per cent within two decades. This is significantly more than electricity which has become the favoured energy source in most conversations, Mr. McGrath’s included.

Given the value proposition of natural gas, is it really any wonder that governments left and right have responded to public demands for more access? The use of abundant, affordable, reliable energy is key to our economic well-being and it makes us the envy of many in the world who wish they had the same. Canadians appreciate it, and need it to continue.

But then we come to climate change. The current public discourse suggests the best way to reduce emissions and address climate change is to electrify everything. Electricity at present meets a little over 19 per cent of Ontario’s energy needs. Electrifying everything would mean meeting the other almost 81 per cent (natural gas for heating, all the liquid transportation fuels like gasoline and diesel, etc.) with electricity, and that wouldn’t be a one-for-one exchange. For example, a back of envelope calculation suggests that having enough electricity to meet the heating load natural gas provides would require building an estimated 90,000 megawatts (MW) of additional power generation–we currently have about 27,000 MW. In other words, we would need to build three more electric generation systems the size of our current one, or about 90 new 1,000 MW nuclear reactors, and all the transmission it would require, just to meet natural gas heating needs. Nuclear reactors don’t come cheap – no big electricity infrastructure does. And renewable generation like wind and solar – often described as cheap, requires oft-forgotten but expensive transmission buildouts and generation back-up (to address intermittency). The cheapest power generation technology, still expensive by comparison to direct natural gas use, is natural gas power generation.

Electrification is a simple thing to suggest as a policy alternative, but a very, very complex and costly option to pursue and, very often, still requires natural gas! Not to mention the reliability
threat that total electrification would represent. Smart societies have a measure of resiliency built into their core systems. In the case of energy, that means being able to get energy to people in
as many ways as possible. Why would you eliminate a reliable delivery system like a pipeline and put more pressure on wires? Wouldn’t that increase your vulnerability?

Mr. McGrath suggests this is necessary no matter what because “climate change is coming for us”. Irrespective of the ominous tone, our starting point should be to ask: is there a way to use
our existing infrastructure better, to help us meet emission reduction targets? If extreme weather events are the potential problem, how is less, and often less reliable, infrastructure delivering
essential services a smart solution? Do we have to completely toss out what we have, as Berkeley seems intent on doing?

In the natural gas industry we think there are many other things that can be done. Here are a few we have under way.

We are driving emissions down by encouraging efficiency. The majority of natural gas furnace in Ontario operates at over 90 per cent efficiency today, versus 60 per cent a few decades ago. This
represents a big reduction in emissions and in costs for end users.

We are driving emissions down by introducing new, more efficient technologies. We are currently investing in various combined heat and power (CHP) technology applications that offer the
potential for a single unit in your home to meet natural gas and power needs, promising a reduction in household energy consumption (and therefore cost) for current needs and improving
reliability (the system can help reduce the electric load without taking you off the electric grid).

We are driving emissions down by serving as the key partner for renewable electric technologies like wind and solar, that need a reliable partner for when the wind doesn’t blow and the sun doesn’t shine. Natural gas generation is the partner that enables wind and solar on the power grid.

We offer the biggest single battery anywhere in natural gas storage. Today we have the capacity in Canada to store approximately 30 per cent of our annual usage of gas. Apart from being an incredibly reliability advantage, this is storage capacity that can be used to support peak energy demand, thereby helping keep energy affordable.

We are investing in renewable fuels that offer significant emission reductions – fuels like renewable natural gas (RNG), produced from waste disposal facilities, from agricultural waste,
wastewater treatment, or biomass. More affordable in almost all applications than wind and solar, RNG is interchangeable with conventional gas, and can simply be added to the existing gas
distribution system.

We are investing in new fuel technologies like hydrogen that can be injected into the gas distribution system, increasing the heat content and potentially lowering emissions.

We are investing in emission capture technologies that can recover CO2 post-combustion.

We are constantly improving our delivery systems. The methane leaks referred to from municipal systems across the U.S. are often the result of old cast iron pipe infrastructure – all of which have
been phased out in Canada.

And we are making every effort to reduce emissions when producing our fuel, by developing improved recovery technologies. Were the rest of the world to produce conventional and unconventional natural gas and oil as we do in Canada, estimates are that there would be an immediate 23 per cent reduction in GHG emissions.

In sum, the gas industry is doing a lot to reduce emissions – and it is doing so cost-effectively and sustainably. Shutting it down won’t solve the problems mentioned by Mr. McGrath, it will only
create more issues.

Decision makers should reflect on the fact that their policies and the language they use around electrification comes across as weirdly ideological, and is out of touch with what is doable, and
often ignorant of the many very good things being done. Berkeley’s actions aren’t one of those good things.

No Mr. McGrath, governments don’t need to start restricting the sale of gas-fired homes and appliances: doing so will raise the cost of living for millions (and overwhelmingly that means
working families with modest incomes) and also undermine the many actions underway to reduce emissions in ways that maintain that cost of living for those families.

You say the path we’re on is like putting a gun to our own head. Actually, it is nothing of the sort – just some prudent management of extraordinarily reliable and cost-effective infrastructure – the
kind of wisdom we want future ages to note about us.

Timothy M. Egan
President and CEO
Canadian Gas Association


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