Thank you very much.
I'll try to step through this reasonably quickly, because I'm aware of the time.
On page 2, there are a couple of points worth noting.
I want to start by congratulating the committee on your choice of this subject. There's been a lot of time spent in the last year or so looking at the energy production system and industrial energy use and what we do about greenhouse gases in particular. That's important work that needs to be done.
There's another half of the important work that needs to be done, and that's looking at energy in our communities. There are some very good reasons for doing that. One is that it really amounts to about 50% of the energy we use. If we are looking to the kind of fundamental transformation implied by a 60% or 80% reduction in greenhouse gases, one of the things we are going to have to do is completely restructure the way we use energy in those communities, as well as the way we produce it and the way we use it in our industry sector.
The other side of that coin, though, is that there are some very quick gains to be had. The kinds of things we can do in our communities through energy efficiency and other choices can be achieved relatively quickly with a lot of small investments and things we can get on with right now.
Finally, through self-generation--in other words, by improving the energy autonomy of our communities--we can also make very big environmental gains and improve the reliability of the system.
On page 3 I'm talking about some of the things the gas industry has done directly. This, per se, does not relate to electricity, because what we're talking about here is reducing natural gas used directly for hot water and heat, primarily. Like the electricity industry, we have been investing in these sorts of programs, working with our regulators, and indeed, working with Natural Resources Canada as well, and we've made some pretty good progress--about one million tonnes of greenhouse gas equivalent through about $100 million in investment since 1995. That's ramping up steadily, and I think what we're going to see as we move into the future is a significant increase in those numbers. But it's a start.
As Mr. Konow said, one of the things that is important here is the role of the utility as the connection to the customer. We know our customers. We work with them directly, we understand their needs, and we are, if you will, the retail end of energy efficiency programming. Natural Resources Canada is the wholesale end, and we work closely together.
On the next page, “Beyond DSM”--demand side management--“The Integrated Energy System”, there are a couple of points to make. One is that energy forms are not all created equal. Electricity is the highest and most valuable form of energy. We should be using it wisely, and we should be using it where it makes the most sense. Mr. Bevington, I believe you spoke earlier about whether there are places where we're using electricity where we could find other ways of getting those same energy services. I think the answer to that is yes, because electricity demand is going to grow for those high-end applications.
The other three points are simply arguments for why we need to have a more integrated perspective. Energy forms do compete, and they're going to compete more and more in the future, whether that's gas, electric, or on-site renewables. They complement each other. Increasingly, we're going to see hybrids--hybrid electric renewable, hybrid gas renewable--as ways of improving efficiency, improving environmental performance, and improving reliability.
Finally, there is the interconnect, and the most obvious one is the role of natural gas, again, in distributed power generation in combined heat and power applications. For those reasons, it's important to see the whole puzzle in one picture.
The next page, very briefly, highlights residential use. You can see how much is used for space heat and for water. Over half of that space and water heat energy is from electricity. There is an argument that you could significantly improve your energy efficiency simply by using the right fuel in the right place at the right time. That could be natural gas, but over time it will increasingly be on-site-generated renewable.
My point here is that there is a quick win to be had that will take us through the next couple of decades by making the most effective use of our natural gas system in conjunction with the electricity system. One estimate in Ontario is that we could get about three million tonnes of greenhouse gas reductions at the end of five years. By comparison, that's three times as much as the million tonnes that we've achieved over the past 10 years. So there's lots to do.
Moving to commercial and institutional, I think the big story on commercial and institutional is the potential for combined heat and power systems. That's also true at the residential scale. I think you're going to see those starting to roll out in the near future. But commercial and institutional is better because they're bigger systems, and you have energy managers and so on who can make sure it's working properly. There's a lot to be achieved in terms of improved energy efficiency simply by the way we deliver energy in our buildings as well as in how we actually use it.
We have some suggestions for what we call a “framework for greening”, with three strategies. One is energy productivity. Call it energy efficiency; call it energy conservation. It is productivity, and it's something we can do a lot to improve. We need to make sure we're getting the same or better energy services, but doing it with less energy--in other words, not asking people to sacrifice, just being smarter in the way we go about it. And look at the integrated energy system, in other words, the community level, which includes not only the buildings but also the energy systems that are used to deliver that energy.
The second is renewables. Here I'm talking about on-site renewables--in other words, not the grid renewables such as wind or hydro, but rather ground source and solar. In partnering with the utilities, partnering with electricity and natural gas, there are a lot of opportunities to improve, again, the efficiency of the energy system overall and to significantly improve its environmental performance, largely through hybrids, basically using the existing grid as a basis on which we start to move more renewables into the picture.
Finally, there's energy technology. That's where there's a role for government to invest in demonstration, for the most part, of new energy technologies.
Mr. Chairman, I'll just wrap this up. On page 8 we have the same three strategies, but the fundamental point I want to make here is that these are all areas where both gas and electricity utilities are partners with government, partners with local government, and partners with consumers in trying to put these strategies in place.
I'll leave it there and turn it back to you.