Appendix 2 natural gas: Our Place in Canada s Sustainable Energy Future Natural Gas: Our Place in Canada s Sustainable Energy Future / 1

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6 Appendix 2 natural gas: Our Place in Canada s Sustainable Energy Future Natural Gas: Our Place in Canada s Sustainable Energy Future / 1

7 Heating and powering homes, apartments, factories and offices across the country, natural gas is Canada s number-one source of energy in the residential, commercial, institutional and industrial sectors. Clean and affordable, it provides safe and reliable fuel to over six million Canadians. 2 / Canadian Gas Association Sustainability Report

8 natural gas is smart energy It heats homes and powers businesses. It can fuel vehicles and feed the electric grid. It is abundant, affordable, safe, clean and reliable. As Canada s energy mix continues to diversify, so will the role of natural gas within it both as a primary energy source and the enabler of innovative alternatives. P Canada s natural gas infrastructure is extensive encompassing more than 480,000 kilometres of natural gas pipeline. Natural Gas: Our Place in Canada s Sustainable Energy Future / 1

9 Versatile. Reliable. Ready. Natural gas occupies a central place in Canada s energy mix. Clean and affordable, it s the number-one source of energy in the residential, commercial, institutional and industrial sectors. Well over six million Canadian customers rely on it for heat and power in homes, apartment buildings, and business, institutional and industrial facilities. Through a variety of technologies, natural gas meets approximately 30 percent of the country s energy needs. C Natural gas technologies are up to 98% efficient in home appliances and up to 80% efficient when used in electrical generation. Going forward, natural gas will continue to play a key role as Canada seeks to ensure the sustainability and environmental responsibility of its energy supply, reduce energy-related costs, and reap the benefits of greater efficiency. The exceptional versatility of natural gas with uses ranging from industry to transportation, from single buildings to the community-wide energy grid makes it a truly foundational fuel. Wherever the need arises In buildings, throughout communities and on the road, natural gas is poised to deliver unique advantages to Canadians. In homes and businesses it can provide efficient, affordable heat and power directly to consumers using a variety of technologies, from ground source heat pumps to combined heat and power generators. 2 / Canadian Gas Association Sustainability Report

10 In Canada s power grid, natural gas is an ideal, quick-firing partner for intermittent renewable energy sources such as solar and wind. And the country s natural gas infrastructure can be used to distribute biomethane a natural, entirely renewable energy source. On the road, natural gas either in liquefied (LNG) or compressed (CNG) form can provide a host of benefits to fleets anywhere in the country, particularly heavy-duty and return-to-base vehicles. Reduced emissions, increased efficiency and lower costs will make natural gas the fuel of choice for forward-thinking fleet operators. Smart energy. Green future. Whether serving as a main source of heat and power or as a reliable, consistent partner to emerging renewable options, natural gas delivers the environmental benefits of no ash content, negligible sulfur dioxides, minimal particulates and low nitrogen oxides. It also has low greenhouse gas (GHG) emissions. u At current levels of consumption, North America s natural gas supply will last for more than a century. And innovation promises to unlock even more from unconventional, renewable and other sources. Canada is the world s third-largest producer of natural gas. Our country has an abundant marketable supply and shares with the United States the largest and most advanced natural gas infrastructure in the world. All of this means we are especially well positioned to take advantage of the benefits of this valuable and versatile resource. Natural Gas: Our Place in Canada s Sustainable Energy Future / 3

11 In commercial buildings across Canada from restaurants to offices natural gas is helping businesses go greener while reducing energy costs.

12 WITHIN BUILDINGS In Canada s energy future, natural gas will remain an efficient option for meeting the needs of residential, commercial and institutional buildings working in conjunction with technologies like solar and ground source energy. p In homes and buildings, natural gas has an increasingly important part to play, as innovations in technology help keep consumers costs down while reducing environmental impact. Natural Gas: Our Place in Canada s Sustainable Energy Future / 5

13 Supporting the economy Natural gas is an important part of Canada s economy, providing thousands of jobs and significant revenue for the provincial and federal governments. As well, Canada is the world s third-largest exporter of natural gas, generating between $20 and $30 billion dollars annually in export revenues. Natural gas in homes and businesses Natural gas will continue to be an important part of Canada s energy future over the coming years, directly meeting energy needs in homes, businesses and institutions. For direct heating including space and water heating, cooking and drying natural gas is the most energy-efficient choice available, with both environmental and economic benefits. Natural gas helps reduce emissions and because of its abundance and the promise that innovation will unlock unconventional, renewable and other sources is also likely to remain highly affordable. Proving the potential Inspired by one company s interest in energy efficiency, SaskEnergy is partnering with SaskPower, Natural Resources Canada and Advanced Engine Technology Ltd. of Ottawa on a prototype combined heat and power (CHP) system that promises to reduce energy costs and environmental emissions, while providing emergency power in the event of an outage. The 6kW CHP system installed at Inland Metal, a Regina-based sheet metal fabricator, integrates technologies that enable it to be extremely efficient, maximizing use of the provincial electrical grid and natural gas distribution systems. CHP is more efficient and produces less environmental emissions than conventional electrical power generation and natural gas systems as waste heat is captured and used to heat water or space and as there are no transmission line losses. Other utilities are undertaking similar projects. Ontario s Union Gas is installing innovative natural gas technologies in three of its new buildings including natural gas-fired combined heat and power (CHP) at one Burlington location. There, two 65kw natural gas micro-turbines generate electricity and their formerly wasted heat is stored in a water-filled thermal storage tank for release as needed by the building. Natural gas at home Residential buildings also stand to benefit from natural gas. In Ontario, Enbridge Gas Distribution has installed a handful of micro-chp units and is monitoring their performance over a year. A small appliance roughly the size of a dishwasher teams ups with the premise s furnace and hot water heater to produce heat and electricity efficiently while reducing strain on the grid. Natural gas in action By supporting projects like this, says James Gates, a Senior Engineer at SaskEnergy, we re showing that CHP technology offers emissions, efficiency and reliability benefits. Large-scale capacity To show that larger installations can also benefit from natural gas technology tied into ground loops, ATCO Gas has constructed an operation centre in north Edmonton that uses natural gas heat pumps. Extracting solar energy stored in the ground, ATCO aims to achieve 125 percent system efficiency producing 1.25 units of useful heat for every unit of natural gas consumed. The ATCO North Edmonton operation centre uses natural gas heat pumps. The Union Gas Burlington office uses innovative natural gas technologies like combined heat and power (CHP). 6 / Canadian Gas Association Sustainability Report

14 a closer look Within Buildings legend Gas distribution lines Heat distribution lines Hot water lines GAS APPLIANCES HOT WATER USE Space heating and cooling Solar heat panels Solar electrical panels MICRO COGENERATOR AND SOLAR ELECTRICITY EXCHANGE TO GRID BUILDING ELECTRICITY ELECTRICITY CONTROLS SPACE HEATING AND COOLING HEATING AND COOLING PUMPS AND CONTROLS Diagram for illustrative purposes only GAS-FIRED MICRO COGENERATOR THERMAL STORAGE TANK NATURAL GAS GRID GAS BOILER GROUND SOURCE HEAT PUMP GROUND SOURCE ENERGY BOREHOLES A low-emission, inexpensive energy source for ambient and water heating, cooking and drying, natural gas is key to making energy efficient buildings a reality. Used in combination with solar and ground source energy, it provides reliable, affordable and clean energy to houses and buildings. And new technologies are allowing natural gas to become an efficient fuel for on-site electricity generation. Natural Gas: Our Place in Canada s Sustainable Energy Future / 7

15 In homes and apartments, Canada s natural gas infrastructure allows communities to establish local district energy systems featuring high efficiency and reliability.

16 IN THE COMMUNITY Canada s extensive natural gas delivery infrastructure will allow communities to establish energy systems that integrate locally available energy sources in the most efficient ways with natural gas as a reliable, fundamental component in the mix. iii The potential exists for natural gas to become an even larger part of Canada s energy mix providing reliable, affordable energy and acting as a partner to alternative energy sources. Natural Gas: Our Place in Canada s Sustainable Energy Future / 9

17 Exploring innovation Canada s natural gas supply continues to expand as new sources of gas are explored. Some of these include: Biogas a renewable resource generated from biological material Pore gas extracted using reservoir stimulation from the pores in sedimentary rock Coal bed methane found trapped and bound to solid hydrocarbons molecules in coal seams Natural gas in the smart energy grid As Canadian communities evolve their energy systems to incorporate multiple sources municipal waste, biomass, solar, wind and others the reliability and flexibility of natural gas will make it an essential and efficient contributor to the smart energy grid. Already, Canada has a reliable and extensive natural gas delivery system in place. That infrastructure helps enable the efficient use of locally available energy for example by allowing natural gas to contribute to distributed power generation and district energy and also puts natural gas forward as an alternative energy option on its own. Contributing through co-generation Natural gas can be the key to highly efficient power generation, especially in co-generation systems that complement intermittent renewable energy sources. According to Rob Fennell, Director of Green Energy at Enbridge Gas Distribution: Natural Gas provides a scalable, flexible and affordable way to bolster renewable energy sources like solar and wind that don t necessarily provide power when and where it is needed. Natural gas can provide critical reliability support for such sources and is especially helpful because it activates rapidly. Smart energy is not only about what you use. It s how you use it, says Fennell. Commission to work with Catalyst Power Inc. to upgrade biogas captured from agricultural waste. When upgraded to biomethane, the gas would be injected into Terasen s distribution system providing a complete renewable energy source. In Dockside Green, Victoria a planned community striving to be GHG-neutral Terasen is a partner in a hot water district heating system that uses Nexterra technology to convert waste wood into thermal energy for space heating and water heating, with natural gas providing back-up and any peak load needs. Natural gas in action Capturing energy right out of the pipeline Enbridge is currently working on an energy solution for wide-scale deployment in urban areas. As gas moves from its source to power plants and homes, it travels through pipelines of increasingly smaller size releasing pressure at transition points. Through small turbines installed at city gate stations where gas moves from the transmission grid to the distribution grid, Enbridge is transforming this waste energy into a consistent, stable and efficient energy source. Since natural gas pipelines already run through most urban areas, the solution is ideally suited for major cities. 2. The Enbridge gate station hydrogen fuel cell project captures wasted energy. Terasen Gas is a partner in a hot water district energy system in Dockside Green, Victoria. Transporting renewable natural gas Canada s natural gas infrastructure can also be used to transport biomethane a renewable natural gas produced from a number of sources including sewer sludge and municipal solid waste. In British Columbia, Terasen Gas has applied to the British Columbia Utilities The Terasen Gas renewable natural gas project upgrades biogas captured from agricultural waste and injects it in their distribution system. 10 / Canadian Gas Association Sustainability Report

18 a closer look In the Community LANDFILL GAS COLLECTION legend LANDFILL GAS PROCESSING PLANT Gas distribution lines Unprocesses biogas Heat distribution lines Electrical grid LANDFILL SITE Solar heat panels Diagram for illustrative purposes only CLEANING STATION ANAEROBIC DIGESTOR TANKS ENERGY CENTRE SEASONAL THERMAL STORAGE COMBINED HEAT AND POWER GENERATION Through co-generation with local renewables like solar, biomass and ground source energy, natural gas can be an efficient source of electricity for hospitals, offices, businesses, industrial facilities and houses. District energy systems can provide communities with affordable, reliable and clean heating, and the natural gas network can distribute zero GHG biomethane produced from municipal, agricultural, industrial or forestry waste. Natural Gas: Our Place in Canada s Sustainable Energy Future / 11

19 Natural gas has the potential to make Canada s transportation industry greener, as fleets switch to low-emission and inexpensive Liquefied Natural Gas (LNG). Clean and reliable, LNG can reduce fuel costs by up to 30% in the right sized fleet.

20 ON THE ROAD Canada s transportation industry particularly the heavy-duty trucks and return-to-base fleets sectors will greatly benefit from natural gas as a practical and low emission energy source. a Natural gas can help municipalities meet their transportation emissions reduction goals while keeping down operating expenses. The adoption of biogas can further improve the environmental benefits and help propel Canada to a greener, more sustainable future. Natural Gas: Our Place in Canada s Sustainable Energy Future / 13

21 Sustainable transportation Transportation sources accounted for 30% of Canada s GHG emissions in 2008, with heavy-duty trucks responsible for a growing proportion of that total. Abundant and cost-effective, natural gas can provide an estimated 15 to 25% well-to-wheels or lifecycle reduction in GHGs for heavy-duty fleets. The use of biogas increases the lifecycle benefit dramatically upwards of 85%. Natural gas in transportation Transportation is an emissions-intensive sector within the Canadian economy. Heavy diesel trucks in particular contribute significantly to Canada s carbon footprint; although they account for just four percent of vehicles, they emit 30 percent of the transportation-related GHGs released from the on-road vehicle population in Canada. Heavy trucks are used in a variety of work applications, ranging from long-haul highway trucking to local delivery and specialized applications such as cement mixing, port drayage and refuse collection. Because of their heavy loads and high horsepower requirements, these vehicles have high energy demands which, to date, have best been met by fossil fuels. Gaz Métro itself is looking at transportation applications for natural gas. The company has plans to soon begin fuelling heavy-duty trucks with liquefied natural gas (LNG) helping achieve GHG reductions of up to 25 percent while lowering fuel costs and offering, according to any short-terms financial forecasts, greater price stability than diesel. The LNG which is condensed and cooled to below -160 C will be produced at an existing LNG plant in Montréal. With its volume reduced by a factor of 600, the fuel can easily be transported to specific refuelling stations along busy highways. Fleet use of natural gas For municipal fleets, heavy-duty highway trucking and return-to-base shippers, Canadian technology exists to switch to clean, reliable compressed natural gas (CNG) or liquefied natural gas (LNG) reducing costs, emissions and dependence on imported energy. In the right sized fleet, natural gas can reduce fuel costs by 15 to 30 percent. And with a North American supply expected to last more than 100 years, natural gas is expected to remain affordable. Canada is served by an extensive gas distribution infrastructure that ensures safe and affordable natural gas supply throughout the country. Natural gas vehicle technologies are mature, proven and certified to the most stringent emissions standards. Medium and heavy natural gas vehicles are produced by more than 15 truck and bus manufacturers across the continent, and many North American municipal fleets particularly refuse collection and transit have already adopted natural gas as a fuel. The Blue Road project We can say that natural gas is the fuel of the future, says Sébastien Lajoie of Québec s Gaz Métro. Environmentally speaking, since bio-gas will have to be valorized sooner or later, a switch to natural gas equipments becomes inevitable. This is even more consistent with very efficient technology options like new gas heat pumps installed in Montreal s Benny Farm housing project. And there has been a lot of technological growth in the transportation field. Natural gas in action Clean, reliable natural gas reduces costs and emissions for municipal fleets, heavy-duty trucking and return to base shippers. 14 / Canadian Gas Association Sustainability Report

22 a closer look On the Road legend Gas distribution lines Unprocesses biogas LANDFILL GAS COLLECTION UNPROCESSED LANDFILL GAS IN LANDFILL GAS PROCESSING PLANT Heat distribution lines Electrical grid Solar heat panels Diagram for illustrative purposes only LANDFILL SITE ON-SITE FUELING STATION PROCESSED BIO-METHANE OUT PUBLIC TRANSIT NATURAL GAS REFUELING STATION NATURAL GAS POWERED WASTE SERVICE VEHICLES For medium- and heavy-duty vehicles in local delivery, refuse and public transit fleets, natural gas can reduce operating costs and reduce GHG emissions especially when biomethane is included in the fuel mix. It provides an efficient option for long-haul trucking in major transportation corridors. Natural Gas: Our Place in Canada s Sustainable Energy Future / 15

23 Canadian gas association Activity Report Committed to Energy EfficienCY Natural gas distribution companies have a strong history of helping customers make smart energy use decisions. For more than a decade, many utilities have been delivering energy conservation and efficiency programs to customers across Canada. Over the years, the range and scope of these demand-side management (DSM) programs have expanded. All companies have increased their budgets, in some cases significantly. Some have directed their efforts toward a focused set of programs, while others have developed a comprehensive suite of cost-effective programs for all sectors and consumers. The study commissioned by the Canadian Gas Association and conducted by IndEco Strategic Consulting Inc. offers perspective on the results and benefits of DSM programs since Some of the key findings are presented here. The complete report, including a list of participating companies, is available at What is Demand Side Management? Demand-Side Management (DSM) refers to efforts by utilities and consumers to reduce energy consumption, particularly during periods of peak demand. More efficient systems and appliances, alternative and renewable fuels, and overall energy conservation all factor into the DSM mix. 16 / Canadian Gas Association Sustainability Report

24 Key findings Eliminating waste As a direct result of DMS programs, more than 16 million tonnes of CO2e have been eliminated from the atmosphere since A strong performance In 2009, emissions were reduced by 3.3 million tonnes of CO 2 eq the equivalent of removing roughly 430,000 passenger and freight light trucks from the road for one year. Investing in energy efficiency From 2000 through 2009, natural gas utilities in Canada invested more than $459 million in DSM/energy conservation and energy efficiency. The investment is growing Total 2009 DSM investments were $92.2 million almost six times the total spent in 2000 saving 244 million m 3 of natural gas. Reduction in Greenhouse Gas Emissions as a result of DSM activities (estimated) thousands of tonnes Nationwide natural gas savings as a result of DSM activities (estimated) millions of cubic meters 3, Between 2000 and 2009, energy savings from gas utility DSM programs have steadily reduced greenhouse gas emissions. Since DSM programs offer long-lived measures, these reductions will persist from year to year. 92 Since 2000, cumulative nationwide natural gas end-use savings from DSM programs exceeded 1794 million M Natural Gas: Our Place in Canada s Sustainable Energy Future / 17

25 Glossary Biogas: Gas that is generated through the anaerobic digestion or gasification of biological matter; a renewable resource. Biomass: Biological material that is consumed to create energy. Bio-methane: Biogas that has been upgraded to pipeline quality gas. Combined heat and power (CHP): A power generation system that creates both electricity and heat. Compressed natural gas: Natural gas that has been compressed to less than 1% of the volume it normally occupies at standard atmospheric pressure. Demand-side management (DSM): Energy conservation and efficiency measures intended to control and reduce energy consumption. Distributed energy: A system in which energy is generated on-site or in close proximity to where it will be used, reducing energy lost in transmission. District energy: A system using a network of water or steam pipes to distribute thermal energy to several buildings in a community. Energy conservation: A measurement of GHGs that takes into account fuel production and transportation as well as end-use emissions. Energy efficiency: A measurement of GHGs that takes into account fuel production and transportation as well as end-use emissions. Greenhouse gasses (GHGs): Emissions that contribute to global warming Ground source heat pump: A heating and cooling system that uses the earth as a heat source in the winter extracting solar energy stored in the ground and a heat sink in the summer. Liquefied natural gas (LNG): Natural gas that has been cooled to -160 C and taken on a liquid state. Unconventional natural gas: Gas found in sources and reservoirs not traditionally exploited. Wells-to-wheel: A measurement of GHGs that takes into account fuel production and transportation as well as end-use emissions in transportation applications. Canadian Gas Association 350 Sparks Street, Suite 809 Ottawa, ON K1R 7S8 Telephone: (613) ext info@cga.ca Website: 18 / Canadian Gas Association Sustainability Report