Ontario Gas Expansion Wasteful, Counterproductive: Critics
Climate advocates and alternative energy suppliers are pointing to contradictions between Ontario Premier Kathleen Wynne’s ambitious climate plan and a year-old provincial initiative to expand natural gas distribution to previously unserved communities.
The criticism comes as the Ontario Energy Board (OEB) considers a request by Alberta-based Enbridge Gas Distribution to raise its charges to existing clients to finance an expansion of its gas distribution network in the province to 18,000 potential new customers in 30 small communities and First Nations reserves.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
(Earlier this month, a court in Massachusetts struck down a similar proposal from a New England regional utility that proposed to raise rates on its existing electricity subscribers to pay for a gas pipeline extension in the state).
In May, Wynne’s government announced plans to spend $7 billion over the next four years to put the province on track to reducing its greenhouse emissions by 15% below 1990 levels by the end of this decade, and 80% by the middle of the century. A year earlier, however, it committed $230 million to finance expansion of natural gas distribution networks in the province.
“The goal was to help unserved communities attract industry, create jobs, and lower costs for businesses and homeowners,” energy specialist Tyler Hamilton reports on TV Ontario (TVO).
“Communities that don’t have natural gas service want it for one overarching reason: it’s cheap,” Hamilton adds. Indeed, gas prices in the province have dropped over the last several years while electricity prices rose—most recently this month. “In the case of households using electric baseboard heating, monthly bills can be three to four times larger than an equivalent natural gas bill.”
But critics have taken advantage of Enbridge’s OEB application to point out the obvious contradictions between the government’s two initiatives—and to suggest alternatives.
Deborah de Lange, who teaches sustainable business strategies at Ryerson University, noted that natural gas provides about 75% of the energy used for space and water heating in the province, contributing 19% of its greenhouse gas emissions. “So why on earth would you extend the natural gas system?” she asked.
Meanwhile the Ontario Geothermal Association is arguing that its members’ products can avoid the emissions associated with natural gas, both from transmission leaks and combustion, for no more than the average of $25,625 per home that Enbridge revealed to the OEB it would cost to deliver natural gas to communities like Fenelon Falls, in Ontario’s Kawartha Lakes region. That doesn’t include “the expense of installing a furnace, water heater and, if necessary, a forced-air duct system,” TVO reports.
By comparison, the Geothermal Association claims a residential geothermal system “that provides both heating in the winter and cooling in the summer ranges in cost from $21,000 to $26,000, depending on the type of installation.”
With such options available, Ryerson’s de Lange suggests Ontario’s gas distribution subsidy will be a waste of money: “We’re going to be left with incredible amounts of stranded assets,” de Lange predicted. Her concern was echoed by other interveners, including Environmental Defence, the Consumers’ Council of Canada, and the Federation of Rental-Housing Providers of Ontario.