Evidence of meeting #25 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was propane.
A recording is available from Parliament.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I'm sorry; it's $5,500. That would be the cost at the home. Then there is the cost of converting a vehicle. I know you stated it earlier.
Can you repeat that again?
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
It can be between $8,000 and $12,000, depending on the tank you choose.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Then the barrier right now is that we're looking at about a $13,000 investment for someone to have the ability to fill up at home.
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
That's correct.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
What is the price differential between a brand new vehicle operating on natural gas versus one that operates on traditional gasoline?
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
For the Honda Civic in the U.S. it's about a $3,000 difference.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
Therefore, if you were to buy that Honda Civic, you would pay a $3,000 premium, plus $5,500 to install a fill-up capacity at home. You're looking at an $8,000 investment.
Earlier you said it would take about three years to pay off the investment of purchasing a natural gas vehicle, but I don't think you were including the cost of the home fill-up.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
If you did add that home fill-up, you're probably looking at maybe seven or eight years for it to pay for itself.
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
I think the economics would probably say between three and five years.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
That's a very reasonable timeframe to expect recovery on investment.
This is probably a question for the retailers. I know a lot of the retailer natural gas companies offer what your business would refer to as something like a futures contract. They'll say, “We'll only charge you x cents per unit of energy for the next three years if you buy in at this rate, as opposed to paying the fluctuating cost.”
Do you think it's possible for those kinds of contracts to be made very long term for the consumer, so they would have predictability about the cost of investing in a unit to fill up at home?
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
What would you consider long term?
10:15 a.m.
Conservative
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
That's a possibility.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
I'm a consumer sitting down with my calculator, and I'm saying, “If I'm going to spend $5,000 to have this system put in at my home and $3,000 more to buy the natural gas Civic as opposed to the gasoline one, then I'm going to want to know the price of natural gas over the long run so I can calculate the savings and determine my pay-back period.” You'd want to be able to say to Enbridge, Direct Energy, whomever, that you want certainty from here until 2018 on the price.
Do you think that's something one could realistically ask of a natural gas retailer?
10:15 a.m.
Vice-President, Natural Gas Policy Development, Encana Corporation
I would think so. In fact, the retailers are now starting to do long-term contracts with Encana.
We did a long-term deal with Northwest utilities in Oregon to make sure we closed in on a pricing that they could pass along to their customers. You're starting to see that throughout the U.S., given the natural gas prices.
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
You said that propane does not have the kind of infrastructure to reach households at the moment. Is that correct?
10:15 a.m.
President and Chief Executive Officer, Canadian Propane Association
It does not currently exist in many places in Canada. There are a couple of examples—British Columbia has a couple—but you don't see a lot of it. Typically, you see—
10:15 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
So the home-fill thing would not be an option right now?
10:15 a.m.
President and Chief Executive Officer, Canadian Propane Association
Well, sure it would. If you've got a propane tank at your house, you could fill from the existing infrastructure.
10:20 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
But you'd have to get a tank at your house and fill up that tank separately. It wouldn't be piped into your—
10:20 a.m.
Conservative
The Chair Conservative Merv Tweed
I have a question on propane.
It has been around a long time. I can remember our fleets being switched to propane in, I think, 1975. Has it been government policy or regulation that's held it back? I can't understand why we're almost at the same point we were 35 years ago.
10:20 a.m.
President and Chief Executive Officer, Canadian Propane Association
I guess history has a way of repeating itself.
It's many different things. Part of it is that the technology back then was not as good as it is today. That technology led some people away from propane. Once you lose a customer, it's hard to bring that customer back.
We're now at a point where technology has advanced so much that you literally can drive your fleet or pickup truck and not have to hit a switch anymore; it's all done. There's no loss of distance and that kind of stuff. It requires a re-education on the industry's part to bring it all back.
However, you're right, Mr. Chairman: the first propane-powered vehicle was introduced in the 1920s, so it's been around for quite some time.