Evidence of meeting #38 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 gas.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Timothy Egan  President and Chief Executive Officer, Canadian Gas Association
  • Alicia Milner  President, Canadian Natural Gas Vehicle Alliance
  • Tim Sanford  Director of Sales, Compression Technology Corporation

10:25 a.m.

NDP

Mike Sullivan York South—Weston, ON

We do.

I just wanted to confirm.... One of the topics we've had, one of the items of discussion, has been the regulatory framework. Essentially, because of what goes on in the middle of the ocean, the default is as dirty a fuel as they can get. Without environmental regulations, we'd all be driving bunker C cars. Am I right? The fuel that's easiest on the pocketbook is not always the best for the environment.

So is it correct to suggest that regulation plays a large part, not just in the price of fuel...? The price of fuel is also controlled by the amount of tax on it, as you've just described with Europe, so regulation and taxation are a large part of what drives people, corporations, and fleet owners to look at natural gas.

10:25 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

I wouldn't say that's entirely true. I think in the marine sector, yes, we're seeing that happening, but on the on-road, not so much. What we've seen with increasingly stringent emissions standards is that the OEMs have designed their products to have lower tailpipe emissions.

Now that we're going to have carbon-based emission standards—we already do for light duty and they're coming for heavy—that will actually create some space for natural gas, because the lower carbon benefit will be recognized. The challenge with it is that it's going to be at the manufacturer level, so they'll have to comply on a full portfolio basis with the standard.

But up to now carbon has not been a regulated emission for vehicles, and on tailpipe emissions, where natural gas always had a huge advantage, on the diesel side now, of course, that has been closed. In the last two rounds of emission standards, diesel has basically gotten more complicated to comply.... Natural gas still has some inherent simplicity, which is an advantage, but yes, I think regulation is a very important driver generally for a lot of societal reasons.

Is it going to assist in a big way in terms of this fuel coming into the market? I don't see it too much. It's going to help. It will be an assist. But there have to be other things. It has to have the economics. It needs to have the other pieces to make that work, I think, on the on-road side of it, for it to be significant.

10:25 a.m.

Conservative

The Chair Merv Tweed

Mr. Egan.

10:25 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

Yes, I could respond to that one.

If there's a regulatory framework in place, the natural gas industry is going to comply with it. So in that regard, yes, you respond to the regulatory framework. But the fundamental affordability of natural gas is not driven by regulation. It's driven by the adaptability of the product.

It goes to my earlier point about right fuel, right place, right time. Certain fuels are particularly well suited for certain applications. Natural gas is one option we have in Canada that as a fuel and a technology is very well suited for a variety of applications. That's what drives its use.

10:30 a.m.

Conservative

The Chair Merv Tweed

Monsieur Aubin.

10:30 a.m.

NDP

Robert Aubin Trois-Rivières, QC

Thank you.

I have two quick questions in conclusion.

First, I am looking at the pamphlet on home refuelling facilities, and refuelling seems to be especially fun, based on the faces of the lady and the gentleman. Actually, I think they may be two men; it's not clear, but it doesn't matter. After 25 years in education, I have already received a few pizzas, but that was not a very serious reprisal.

Are there any safety measures for this appliance? I see that the fuelling hose is outside and could very well be cut during the night. A 12-hour fuelling period is fairly significant. Someone could inadvertently damage the appliance by backing up instead of going forward. It seems to me that there are some safety issues involved.

Second, to wrap things up, have the major gas companies thought about providing clients with incentives in order to lower the cost of this conversion?

10:30 a.m.

Director of Sales, Compression Technology Corporation

Tim Sanford

I'll take the safety question, if I may.

It's an excellent point. It's classified as an appliance. Your question is if someone were to come and damage the hose in the night. The electronics are based, with safety precautions, within that. There is a sensor that notices a pressure drop. So if at any point there were a cut in the hose, for example, the electronics would sense it and shut the compressor off. An inherent property of natural gas is that it's lighter than air, so it rises and dissipates if there is a leak. Unlike gasoline, it does not sit low and collect.

All the safety features have been built in to allow for both outside and inside refueling of the vehicle.

10:30 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

If I can add on the safety question, these appliances are CSA-approved. There may be supplemental provisions from province to province on the appliances. The utilities themselves are in the business of putting products that have safety implications into the home for use in furnaces, water heaters, cooking, barbecues, and a whole host of applications. Safety is the first priority, and they're not going to put one of these things on the end of their system unless it meets the safety standards they set.

Your second question was on whether utilities would consider participating in such financing arrangements. I think Mr. Sanford noted that Enbridge is doing that right now. The short answer is yes. There may be implications utility by utility as to whether it is permissible under their regulatory framework. Of course all utilities are regulated by a provincial utilities board because they are monopoly utilities in their franchised areas. But there are many programs in place to assist consumers with appliances in which utilities are involved. In fact we're looking at a whole host of other applications to this in order to make it as simple as possible.

As the chairman noted, for the consumer simplicity is key. That's something the utilities are driving at all the time.

10:30 a.m.

Conservative

The Chair Merv Tweed

Thank you.

Mr. Coderre, go ahead.

May 17th, 2012 / 10:30 a.m.

Liberal

Denis Coderre Bourassa, QC

Thank you, Mr. Chair.

I must admit that I am increasingly becoming converted to this new approach. The advantage, both for consumers and decision-makers, is having a range of methods that help improve consumption and have a better environment. However, there are some downsides to this. I will throw you a bit of a curveball. If this approach is as successful as projected, the number of vehicles will necessarily increase. Once it becomes less expensive, people will refuel even more. So there will be more vehicles on the road.

Do you project that this could lead to a rise in vehicle activity and traffic jam issues, at best? We are living in an increasingly urban world. No one needs to tell you that, nowadays, there is an ongoing procession not only of student protests, but also of orange cones. Will the increase in the number of vehicles not create another problem? That's a nice problem for you to have, since you sell cars anyway. But is it a problem you must consider in your discussions with your future allies, such as municipal federations?

Ms. Milner, I see you would like to answer that. Both of you may go ahead.

10:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

I thought you were going to throw a different curve ball at us, around what this will do to the price of fuel.

10:35 a.m.

Liberal

Denis Coderre Bourassa, QC

So did I. That's the second one.

10:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

That's coming.

10:35 a.m.

President and Chief Executive Officer, Canadian Gas Association

Timothy Egan

I think you speak to a bigger question, which is about the increasing urbanization of society and the challenges posed around it. That's something we're engaged in, in a host of ways. That's why one thing we focus our work on is integrated community energy systems to deliver energy more efficiently overall.

District energy systems, for instance, can be an incredibly efficient way to delivery energy in dense urban areas. Natural gas can be a partner in that. It may actually reduce the consumption of natural gas, which we understand, but it's still part of the picture. The change in the market that is occurring as our society changes and as we become increasingly urbanized has both positive and negative effects on the use of natural gas.

It's a market we're playing in, and we're going to respond to those changes. Fundamentally, we're energy service companies. As consumers have choice and make energy service choices, we're in the business of making sure we can deliver on those choices. We're trying to anticipate the kinds of changes you are talking about and respond accordingly.

My member companies don't make money on the price of gas. That's a flow-through on the bill. They make money on the energy service provision they are providing, so they are constantly looking at how to better do that. I will point out that one of the things we haven't talked about here but that I think is relevant is that there's an increasing integration of energy services—gas and electric—which is part of the response to the challenge you are speaking to. I think that's positive for our society overall.

10:35 a.m.

Liberal

Denis Coderre Bourassa, QC

Of course, we have Gaz Métro in Quebec. There has been a cultural shift. In addition to the fact that our electrical network has been nationalized and that electric vehicles have become a trend, there is an increasing number of cultural changes taking place, especially when it comes to home consumption. We are basically headed toward your converter—when it comes to the home—new types of vehicles and cultural change.

Are we at the crossroads? Who is your worst enemy? Is it the people who want to stick to oil, or...? How is the lobby?