Thank you, Mr. Chairman and members of the committee, for the opportunity to appear today.
As mentioned, my name is Timothy Egan. I'm president and CEO of the Canadian Gas Association.
CGA is the voice of Canada's natural gas delivery industry. As the map in your handout shows, our members include the natural gas distribution and transmission companies that deliver energy solutions to more than six million homes, businesses, and institutions in communities from coast to coast to coast. What this really means is that well over half of the Canadian population rely on natural gas in homes, apartments, buildings, hospitals, and schools.
Let me also note what isn't shown on the map, which is that we also represent over 50 equipment manufacturers and service providers who are part of our organization.
Today I would like to address three key topics that are relevant to the committee's work on innovation: the role that natural gas as an affordable and efficient energy choice has in supporting current productivity; how the natural gas distribution industry has an important and unique role in driving energy innovation; and finally, two very specific initiatives that we are working on around the innovation theme.
First, on the role of natural gas in support of productivity, what most people don't know is that today natural gas already has a central place in Canada's energy mix, meeting over 30% of the country's energy needs. The majority of our customers are homes, but the greater volume of natural gas is delivered to non-residential customers, such as businesses, institutions, and large industry, for heat and industrial processes.
If you look again at the map, you can appreciate how today extensive pipeline infrastructure and storage facilities have facilitated the bringing of natural gas across the country, and indeed across the continent. In fact, the natural gas distribution sector has invested about $14 billion in this extensive network, and continues to invest about $2 billion each year to ensure the safe, secure operation and maintenance of the natural gas delivery system.
Looking to the future, we think there is significant opportunity for natural gas to affordably and efficiently meet even more of Canada's residential, institutional, and industrial energy needs. These efficiency gains and energy cost savings drive productivity and attract investment to Canada.
Natural gas has always been an affordable energy option, but as Statistics Canada data shows, the cost of using natural gas to heat homes has fallen by about 19% in just five years, improving its energy affordability even more for the end-user.
By comparison, the cost of electricity during the same time has increased by over 12%, and the cost of fuel oil and other refined petroleum products has increased over 46%. While household energy spending, as a whole, is increasing, natural gas continues to be very affordable.
Beyond the benefits to the individual homeowner, this is also of great value to commercial and industrial customers. For schools, hospitals, small businesses, or large industry, any reduction in operating costs while maintaining the same level of client service or production output means that savings can be redirected to other uses or to help maintain and strengthen our competitiveness.
Of course, an added advantage of natural gas is that it is an efficient, clean-burning energy choice, very flexible in its applications, and compatible with many other technologies. Further, natural gas technology applications are highly efficient.
This brings me to how the natural gas distribution industry has an important and unique role to play in driving energy innovation, the subject of your discussions. Distribution companies have a long history of investing in the people and communities where they operate. That means they are experienced in bringing new technologies to customers; they're well financed and stable, and therefore well-positioned to initiate projects and help mitigate risk; they have a skilled workforce to operate natural gas systems; through cooperative joint efforts, they can bring new energy end-use technologies into operation quickly; and they have a history of designing and operating innovative and cost-effective programs.
With this expertise and history, natural gas distribution companies are uniquely positioned to work with a range of stakeholders to help technological innovation move into the implementation and commercialization phase.
To illustrate some of the specific things we're doing on innovation, let me highlight two initiatives currently under development.
The first is called ETIC, or Energy Technology Innovation Canada. It was created in 2011 by the natural gas distribution industry to stimulate the application of new—and improvements to existing—natural gas end-use technologies. We have four specific areas of focus: industrial use, transportation, integrated community energy systems, and renewable natural gas. These are areas where we think there is opportunity for greater use of innovative and efficient natural gas technology solutions.
ETIC works to establish relationships with other interested private or public bodies to leverage support for its innovation agenda and for specific projects. We have worked with CANMET; the Gas Technology Institute in the United States; the European Gas Research Group; and we're discussing potential collaboration opportunities right now with Canada's National Research Council and Sustainable Development Technology Canada.
On the latter, let me note particularly our current discussions around a targeted cooperative funding mechanism to drive innovation in applications of natural gas. We believe that together CGA and SDTC can advance some significant project opportunities to the benefit of Canadians.
To date through ETIC, 20 projects with a total value of approximately $9.5 million have been moved under way.
The second slide in your package highlights some of the specific ETIC projects that have come forward, including examples of the partners involved and some of the dollars contributed by partners.
We think ETIC offers a unique forum for projects with interested partners where technology and innovation lessons are shared and dollars can be leveraged. We want to build a closer relationship with government here wherever possible. I note the hot water heater project as an example of where we have worked closely with NRCan and leveraged significantly on public investment on a project that delivers real benefits in terms of energy efficiency savings to customers.
A second effort I want to raise with the committee is one around the opportunity for natural gas in what we call off-pipe communities, including across Canada's north. If you look at the map I gave you and referenced earlier, you can see that today's natural gas distribution network serves customers in and near urban centres. We believe there is an opportunity to expand the system to deliver more affordable, cleaner, and more efficient energy services to customers, communities, and industry located off the existing distribution system and in more remote areas.
We're having discussions with technology providers like General Electric and large end-users like Canada's mining industry through our counterparts at the Mining Association of Canada to share ideas about finding a natural gas solution to northern community energy needs.
Many of these communities are currently dependent on diesel energy. Looking at cleaner and more affordable energy solutions for the customers in these communities can serve a number of national priorities. I'll note several of them: driving economic growth and enhancing productivity; fostering economic development in Canada's north; identifying new markets for Canadian products like natural gas; advancing environmental objectives; supporting an innovation agenda; and offering northern communities more cost-effective use of energy dollars, often public energy dollars; and better performance of energy services.
At this time we're in the process of investigating LNG, or liquid natural gas, technology options across the off-pipe market. We're investigating the logistics and economics related to delivering LNG by truck, barge, or rail in a reliable way to these customers. We're developing a robust map of the opportunities as a visual aid for all decision-makers to understand the scope and scale of it. And we're investigating the possibility of pilot projects in select locations across the north.
As we look to answer all of these information points, we'll be looking at opportunities to engage with officials at Natural Resources Canada and Aboriginal Affairs and Northern Development.
Mr. Chair, thank you for the opportunity to present to the committee today. I think I'll stop here. I look forward to questions from committee members.