Open Letter to Energy Ministers – The True Cost of Electrification for Canadians

Dear Ministers:

Across Canada you are all involved in discussions on how to reduce emissions from energy use. Much of the discussion focuses on the idea of finding a single solution, and the one most often proposed is electrification. The proposal begs the question “what are the implications of electrification for our economy, for our energy reliability and environmental performance, and for the affordability of energy for Canadians?” We at the Canadian Gas Association have some initial thoughts.

Electrification will require a massive build out of new infrastructure. With only 20 per cent of current energy needs met by electricity, an effort to meet the remaining 80 per cent or some portion of it with new electric generation, transmission and distribution will represent a massive logistical challenge, this at a time when building any new infrastructure is already a daunting task. Hundreds of nuclear reactors or hundreds of hydro dams, tens of thousands of large wind turbines, or millions of solar panels do not come about easily or quickly, nor do the wires to get the electrons to end-users.

Electrification would be enormously costly. The current electric system represents in the order of 150 GW of energy; building out multiples of it to replace the gaseous and liquid fuel systems we have likely represents a sum in the trillions of dollars. These are costs that will be borne by ratepayers and taxpayers – Canadian families in their homes and businesses. It would represent thousands and thousands of dollars per family per year. At a time when Canadian families are said to be within a few hundred dollars per month of making ends meet, this would be a punishing expense, not to mention the burden it represents for our competitiveness.

Electrification will not necessarily deliver on emission reduction targets. Electricity is a technology dependent on fuelling electric generation. In many instances hydrocarbons are essential for that generation – either directly as with gas-fired generators or indirectly as backup for renewable power. Putting all of our eggs in one technology basket doesn’t equate to dramatic emission reductions.

Electrification poses a serious threat to energy system resiliency. Bad weather events often bring down electric systems, so more dependence on electric systems exposes us to more risk of losing energy access. Nova Scotia recently saw this first hand, where the electric system was severely damaged by Hurricane Dorian, and the gas distribution system was not. Why would we deepen our dependence on one system that is already very vulnerable to severe weather events, at a time when many claim there will be worse weather events coming?

Electrification would eliminate the enormous opportunity to deliver environmental benefits over other energy systems, like the gas distribution system. The emerging opportunity for hydrogen, the significant renewable natural gas resource available in Canada, the significant innovation under way with carbon capture technology in gaseous systems – these are just three examples of very exciting developments on another energy system, a system that is already more affordable and more reliable. Electrification would mean we miss these opportunities.

I write this letter as President of the Canadian Gas Association, so of course I have a particular interest. But that interest has a proud performance record. Gas utilities save Canadian families as much as $2,000 per year compared to other options, offer the best reliability for energy delivery, and have consistently improved their environmental performance year over year. How could it be prudent to take these things away from Canadians? Yet talk of electrification threatens to do just that.

At a time when the discussion around the environmental implications of energy is at an all-time emotional high, when public figures are feeling compelled to issue commitments to dramatic targets, we ask you to take a deep breath and reflect on what is really at stake. Reliable, affordable energy delivery, with continuous environmental improvement, is being threatened.

The Canadian Gas Association encourages you to:

  1. Work to rebalance the Canadian energy policy discussion to include a focus on the role of natural gas and the associated infrastructure in delivering affordable low-emission energy to Canadians. This includes researching, understanding and communicating innovative natural gas emission reduction pathways such as the blending of renewable natural gas and hydrogen supplies into our current natural gas supply, methane reductions, carbon capture storage and use (CCUS), switching marine and on-road vehicles to run on natural gas, investing in deep energy efficiency retrofits for Canadian buildings, hybrid heating, and exploring new gas technologies from wellhead to burner tip.
  2. Broaden Canadian energy funding programs and research and development (R&D) beyond their current focus on renewable electricity production/use, electric vehicles, and batteries, to recognize the sizeable and growing contribution of natural gas to the Canadian energy system. As such, Canadian energy R&D should be allocated in proportions that better reflect the contribution of fuels/technologies to the energy system.
  3. Work with industry to inform Canadians on the pathways to and costs of emission reductions from a range of scenarios.

Decision makers need to be transparent with Canadians on the costs and implications of energy policy choices and the plans to achieve them. The natural gas industry recognizes that electricity is fundamental to our well-being – many of our companies are significant players in the electricity market as well – but meeting all our energy needs exclusively on an electric system will not ensure that well-being. We need to be clear about that, and use the many resources and energy delivery systems we have in Canada responsibly.

Sincerely,

Timothy M Egan
President and CEO
Canadian Gas Association

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