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 vehicle.

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

9:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

My understanding is that all the dealers have a contract with corporate. They would have to have in their dealer agreement that they're able to sell the vehicle, and they would have to staff up to be able to maintain them in parts, etc. There's a whole suite of things, but they have to have that contract with corporate.

9:35 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

Is that an issue internal to Honda, or are there regulatory obstacles that render it so?

9:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

It's strictly a commercial issue with Honda.

9:35 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

All right.

Are you aware of any hybrid gasoline-to-natural-gas vehicles that the major car companies are contemplating, other than the two trucks, the GM and Chrysler trucks? Are they hybrid?

9:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

No, they're not.

9:35 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

They are strictly natural gas?

9:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

Yes. They are bi-fuel. They will start on gasoline, switch over when the engine reaches the right temperature, and then operate on natural gas.

9:35 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

Can they run exclusively on gasoline?

9:35 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

Yes, they can. That's where maybe it wasn't clear. The Honda Civic, being dedicated, can operate only on natural gas. Typically, bi-fuel is the way you go.

9:35 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

This is the problem. If I want to install a home refuelling system and run my vehicle principally on natural gas, in the existing Canadian distribution environment I can do that as long as I have the option to switch over to gasoline when necessary.

For example, in an average week I could fuel my car with natural gas at my home, drive myself to work and back and wherever else, and always be able to refuel at home without the necessity of relying on a public filling station. But if I decide I'm going to drive to Saskatchewan to visit family, I cannot guarantee I'm going to find natural gas stations all along the way. As a consumer, I would need to have the possibility to run on gasoline as a bridge fuel until the infrastructure for the distribution of natural gas is broadly in place.

Why don't you see that happening? Why aren't the OEMs recognizing the need to bridge between gasoline and natural gas by offering a hybrid product?

9:40 a.m.

President, Canadian Natural Gas Vehicle Alliance

Alicia Milner

I think they're starting to get there, now that we see availability from GM and Chrysler. Ford is also working with Westport to offer a product. I think it's coming, but for them it's strictly about cost: x amount to engineer the product, yamount to manufacture it, and they've got to make sure they're going to sell enough units to make that worth their while.

Now that they are seeing interest in the producer community around North America, I think they are starting to see sufficient interest. But the other thing is that these guys work in thousands of vehicles manufactured per month. They don't want to talk about hundreds. This is the other challenge with the automakers: getting to that zone where, to them, the numbers make sense.

9:40 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

Economies of scale.

Mr. Sanford, I have a question for you. Would it make sense for your company to approach the OEMs and discuss a package for the consumer that would include a natural-gas-powered vehicle and an installed home refuelling station, at an all-in-one price? Potentially, it would be financed over a defined period, and perhaps include the natural gas retailers in a fixed-price contract that would survive over the duration of the financing, so that the consumer could really price in the cost of a natural gas vehicle, the home refuelling station, and have a constant price over a five- or ten-year-period to show the financial benefit, guaranteed.

9:40 a.m.

Director of Sales, Compression Technology Corporation

Tim Sanford

It's an excellent point, and we've been addressing that with a couple of the gas utilities, and potentially approaching Chrysler, for example, GM or Ford—the OEMs—on that specific topic.

It's funny, I go back to our success in the forklift market. We have roughly 3,000 or 4,000 forklifts operating in the greater Toronto area. What we've done there is to work with the forklift dealers to convert forklifts to operate on natural gas, and supply the refueling stations through a financing package. It makes the economic case very, very strong. Workers benefit from the health and safety benefits in emissions, and the company benefits as well from an economic savings that is very substantial.

In this case, we're looking at approaching the OEMs to ask for their assistance through their financing mechanism. So when you purchase your vehicle, in the trunk, for example, would be the fill. You simply take that home and any local HVAC contractor could install that; it's a simple installation. But by having that rolled into the financing package with the vehicle, now you're looking at something that may be much more affordable because it's done through a monthly payment.

On the fixed rate for natural gas, that is something the homeowner could look into with a gas marketer or the utility, to lock in the rate for a length of time so they're guaranteed a price over three to five years, say.

May 17th, 2012 / 9:40 a.m.

Conservative

Pierre Poilievre Nepean—Carleton, ON

I think they need to have that price predictability, because the average consumer is not a commodity economist. You might tell them that natural gas prices are lower and there are 100-year supplies and so on, but that doesn't really mean a lot to someone who sees natural gas as having a mercurial price behaviour, as they see their gas bills differ from year to year, etc. The simpler you make this for people, the better it is. If you're asking them to go to their natural gas retailer and negotiate a contract, it's just not going to happen.

Now, imagine this: I walk into my Honda dealer and the dealer sits me down and says, “Listen, we have this whole package for you, it's all on one sheet, one piece of paper. Here's the cost of your natural-gas-capable vehicle, here's the cost of your home-installed filling station, for which we will arrange installation, here is the agreed price over a five or ten-year period with Enbridge for your natural gas, and we roll it all into one price. You sign on the bottom line, you buy your vehicle, and when you have this vehicle at home we will have your filling station installed, your price set, everything is finished, you just have to drive the car.” That is the kind of simplicity that would compel a motorist to take the risk of early adoption.

9:45 a.m.

Director of Sales, Compression Technology Corporation

Tim Sanford

I agree fully with that. I previously experienced this with a fuelmaker myself, in California, when I was working with Honda dealers. We had a program in place through the U.S. in some specific states, California being one, where the actual Honda dealer would provide the turnkey service, just as you've stated there.