Evidence of meeting #23 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cost.
A recording is available from Parliament.
2:10 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
Am I wrong in saying that, without a clear framework that puts a value on these low-carbon molecules, it's hard to develop a market that is moving in that direction? Does that mean we will have to just be content with exporting these products?
2:15 p.m.
Chief Executive Officer, Enerkem
You're absolutely right. If you compare the cost of producing green hydrogen to the cost of producing hydrogen through steam methane reforming, there's at least a $2 difference per kilogram. Therefore, it's impossible to compete in the same market.
2:15 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
I have a quick question for Ms. Trudeau.
Ms. Trudeau, in your presentation, you said that we already have a supply of renewable natural gas.
In your view, what's stopping us from using that supply? What would it take for us to do so?
2:15 p.m.
Executive Vice-President, Quebec, Énergir
Actually, we've been working on it for 10 years. About twenty projects are in development or under construction. We have one that is operational, but it's not yet producing enough to meet the demand.
At the moment, we're required under Quebec legislation to deliver 1% RNG. In a year, it will be 2%, and by 2030, it will be 5%, and we will meet those targets. When you start a brand new project, you need approvals and construction time to get to the point where demand and supply intersect. We believe this will not be an issue. The supply is growing. It just takes time. It's the same with hydrogen. If you want to have that operational by 2030 or 2040, you need to start now.
I don't want to take up any more of your time, Mr. Simard, but if the Chair will allow me, I would like to say something about the price.
May I, Mr. Chair?
2:15 p.m.
Executive Vice-President, Quebec, Énergir
I will be brief.
Decarbonization comes at a cost, unless we're talking about energy efficiency. The important thing is to do it at a lower cost. Along the lines of what Mr. Hutchens was saying, here in Quebec, for example, for a fairly large elementary school or business, renewable natural gas costs almost twice as much as natural gas. Instead of $30,000, for example, it costs $58,000. However, electricity would cost $10,000 more than RNG. It remains the most expensive renewable energy source that requires no additional investment.
If we help our customers reduce their energy consumption—
2:15 p.m.
Liberal
April 30th, 2021 / 2:15 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I forgot to mention, when I was talking to Mr. Hutchens in the previous round and in partial answer to what Mr. Zimmer was asking, that I get renewable natural gas on my Fortis bill. It costs me about three times as much when you take into account the fact that I'm not paying any carbon pricing on that, etc. That's certainly the consumer thing. That's a big difference. I'm hoping that can come down.
I'll stay with Mr. Hutchens. Mr. Hutchens, you were talking about the costs of transporting hydrogen and things and all of these extra costs when we're developing new technologies and new transportation systems. Isn't that something where the governments, whether they be federal or provincial, should get involved, so that it's not left up to the energy producers to shoulder and try to compete unfairly against old technologies?
Something like a hydrogen transportation infrastructure.... I'm not a hydrogen technologist, so I don't know what that would look like. Isn't that something where the government itself could step in to say that it's going to do this?
Just like the government builds the highways and provides money for the electrical grids between provinces and across the borders, etc., isn't that something where the federal government could really make a difference?
2:15 p.m.
President and Chief Executive Officer, Fortis Inc.
Yes, Mr. Cannings, but it's not necessarily an industry or government conversation. It's probably both. There are ways that government can incentivize industry to actually invest in that type of infrastructure, with things like tax credits. We use those down in the U.S. quite a bit.
At the end of the day, it's really about which is the most economic result. We know that our consumers and our constituents are going to pay the cost; it just depends where. Is it on a tax bill? Is it on a property bill? Is it on a fuel bill? Is it on an electricity bill? We just have to make sure that we're looking at the big picture and seeing what has to be or should be developed.
Frankly, from a clean energy perspective, there is no shortage of people who want to invest in a clean energy and clean tech space. Yes, government can and should have a role. It's just picking which role the government wants to have. Is it in incentivizing? Is it an order by fiat that we have to do something? Is it investing in the infrastructure itself?
2:20 p.m.
President and Chief Executive Officer, Fortis Inc.
Again, keep all those options open.
2:20 p.m.
Liberal
2:20 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you, Mr. Chair.
Thank you to all the witnesses here. We've heard some great input so far of what we need to consider in this. I really appreciate all the information we're being given.
I'm going to point my questions to Ms. Hansen. First of all, Ms. Hansen, congratulations on your company's announcement earlier this week on your renewable natural gas partnership in Ontario. I think that's great news for the industry.
As much as some of my colleagues have drilled into the actual dollar cost of what we're talking about here, I'd like us to talk about the CO2 cost of what we're expanding and the nature of how much CO2, or power, if you will, is required to produce renewable natural gas vis-à-vis other natural gas.
I'm looking for the power input to a power output ratio, if you can, please.
2:20 p.m.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
Thank you, Mr. McLean.
Is this for RNG or hydrogen?
2:20 p.m.
Conservative
2:20 p.m.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
For renewable natural gas, I would say that it really depends on what the source is. If you have an active landfill where you are capturing that, there may not be a significant incremental power input if you're just capturing that. Some of what we're doing with RNG is just capturing emissions that would otherwise vent to the atmosphere, so there is some increased electrical input to clean it up, to scrub it and have that in. I can provide you with that. That's part of the incremental cost that goes into the production of RNG.
On the hydrogen side, again, it really depends on what that source of hydrogen is. For some of the advancements that are being made today, when you pair the hydrogen up with renewable sources like wind and solar and it's used as an energy source, it depends on what the pricing mechanism is within that existing franchise. If this is power that would otherwise be curtailed, you would have a very low cost for that power, and those would be the opportunities that we should be pursuing first, where you have that opportunity to capture that.
The right answer is that it varies quite a bit, and this is why we have to do a number of studies and look at where we can most optimize the infrastructure that we already have. As has been pointed out a number of times today in the comments, we have this incredible gas infrastructure in Canada that we should be looking to utilize, and—
2:20 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
I agree, Ms. Hansen.
Let me get to my next question, if I could, please. I'm sorry; I only have a limited amount of time here.
You are obviously operating a pipeline across Canada, a natural gas pipeline as well, the one you bought in the States. Can you tell us, for the natural gas blend, what is the tolerance of pipeline as a hydrogen percentage in that natural gas stream, please?
2:20 p.m.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
I think, as was pointed out by Mr. Hutchens, that depends on the system. The system that we're going to blend in on a basis right now is 2%-10%. It depends on the age of the infrastructure. They're still doing some studies on this, but for the larger transmission pipelines in certain locations throughout the world, it has blended up to 20%.
2:20 p.m.
Conservative
2:20 p.m.
Executive Vice-President and President, Gas Distribution and Storage, Enbridge Inc.
Yes, in Germany.
2:20 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you very much.
Moving further on, I'd like to get the same data from Mr. Boies at Enerkem on the cost of input for producing hydrogen at his facility, please.
2:20 p.m.
Chief Executive Officer, Enerkem
We don't produce hydrogen. In our Montreal facility, we will be importing hydrogen that will be produced by Hydro-Québec in the adjacent electrolyzer that will be built.
2:25 p.m.
Conservative
