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Senate Standing Committee on Energy, the Environment and Natural Resources Michael Cleland, President, Canadian Gas Association June, 2003.

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Presentation on theme: "Senate Standing Committee on Energy, the Environment and Natural Resources Michael Cleland, President, Canadian Gas Association June, 2003."— Presentation transcript:

1 Senate Standing Committee on Energy, the Environment and Natural Resources Michael Cleland, President, Canadian Gas Association June, 2003

2 2 Overview Natural gas in perspective Natural gas and climate change Developing an industry/government partnership

3 3 Natural Gas Industry at a Glance Approx. 5 million metering points of exchange Downstream sector: Transmission Distribution Utilization Meets 1/3 of Canadas total energy demand 50,000 employed Transmission Distribution LDC Residential Consumers Industrial & Institutional Consumers Food Mart Small Business commercial customers Gas Plant Points of Measurement or Custody Transfer Midstream Processing Gas Marketers ( 565 BCF) (389 BCF) (812 BCF) Contracts Export Markets (3,603 BCF) Exploration & Production

4 4 Natural Gas Transmission in Canada 180 billion m3 natural gas shipped annually for: Export Domestic use Production is: 90% / 10% Western / Eastern off-shore 80,000 km of transmission pipeline GAZODUCTQM TransCanadaPipelines ATCOPipelines TRANSGAS Duke

5 5 Natural Gas Distribution in Canada 345,000 km of distribution pipeline Serves over 5 million customers in most regions Terasen Gas V.I TerasenGas Enbridge Gas Distribution Union Gas Gaz Métropolitain ManitobaHydro SaskEnergy ATCO Gas Gazifère Alta Gas Utilities PacificNorthernGas Enbridge Gas NewBrunswick AlbtCo-ops

6 6 Demand for Canadian Natural Gas 56% export 16% industrial & power generation 13% institutional 6% commercial 9% residential 9% 6% 13% 16% 56%

7 7 Natural gas and climate change Three key perspectives: Natural gas is part of the solution The natural gas industry is doing its part Consumption is the key

8 8 Natural gas is part of the solution Natural gas is the least carbon intensive fossil fuel – and contribution to other air emissions is less than other fuels In the near and the long run further use of natural gas in applications such as power generation, industrial use and transportation could bring important benefits But needs to be looked at as part of an overall solution involving many fuels and technologies And we need to ensure adequate supplies if we want to realize the full scope of the environmental and economic benefits

9 9 The natural gas industry is doing its part The downstream (LDC) sector contributes a very small part to Canadas GHG emissions 2000 distribution emissions from all sources such as combustion venting and fugitives total 1.1 MT CO 2 e or.28 % of the LIE (381 MT CO 2 e) and.15 % of the entire economy (726 MT CO 2 e) Majority of emissions.89 MT are fugitive (unintentional leaks from piping and equipment) that are difficult to measure and have large uncertainty But we have stepped up as one of the leaders in voluntary reductions: More efficient use of electricity in operations Reduction in fugitive emissions through infrastructure replacement Utilize engineering and operational controls to minimize GHG emissions And we are working with the federal government to find a cost-effective approach to ensure that these efforts are enhanced

10 10 Consumption is the key Natural gas provides about 3000 BCF/year (NEB, 2001) towards Canadas annual energy consumption or represents about 31% of total annual primary energy consumption (Stats Canada, 2001) Over 2/3 of emissions associated with natural gas use are at the burner tip Consumers need to play a key role and government and the natural gas industry need to provide support Canadas natural gas distribution industry has extensive experience in demand side management (DSM) programs We are the interface with over 5 million customers

11 11 Example: Enbridge Demand Side Management Success Total Spent - $65 million Total CO 2 Saved - 2.5 million tonnes Enbridge annual DSM emission reductions are more than double their own emissions. Total Gas Saved - 46 BCF Energy Cost Savings > $200 million Enough gas saved to heat over 540,000 homes for 1 year

12 12 Developing an industry/government partnership Objective: To significantly accelerate efforts to reduce consumer GHG emissions Framework: A joint industry/government partnership Scope and approach: Start with focus on DSM and build toward longer term investments

13 13 Objectives Achieve synergies from industry and government cooperation to deliver accelerated GHG reductions that go beyond current programs Address regulatory barriers Assist consumers to make smart, efficient decisions

14 14 Framework Joint Industry/government - NRCan and CGA - commitment and governance, effective coordination, sharing of best practices and higher profile communications to deliver CO2 reductions across different regions Defined objectives and targets Auditable, flexible and transparent process

15 15 Scope and Approach Secure federal funding to extend scope of current industry DSM programs Work with regulators to ensure appropriate incentives for DSM efforts Consider extending joint industry/government efforts to encompass NGV, innovation and promotion of new market applications

16 16 Benefits of CGA/NRCan Partnership Government Of Canada Increased reach for government programs – aim to reach all 5 million gas customers Improve effectiveness of programs by drawing on industry experience Demonstration of leadership by creating programs that assist Canadians to meet 1 tonne target Canadian Gas Industry Flexibility in meeting environmental objectives Access to federal funding to enhance GHG objectives Improved customer service

17 17 Concluding Remarks Government needs to take a comprehensive approach in dealing with industries to reduce GHG emissions – need to maximize cost-effective opportunities Treat natural gas as a key part of a clean future – both short and long term Look to industry to reduce own emissions But biggest gains can be made by accelerating energy efficiency efforts and by supporting longer term innovation and technology development

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