Good morning, Mr. Chair.
Thank you very much to the committee for the opportunity, and thank you very much for your interest in looking at innovative technologies in transportation.
I'm pleased to inform the committee that this year the propane industry celebrates its centennial anniversary. We hope that at the end of our presentation you will agree that propane is a green energy solution and a partner in any sustainable energy strategy.
Our specific request today is that this committee recommend to Minister Oliver that propane be included as part of the Canadian natural gas deployment road map, which it is not now, and that the federal government lead by example by converting more of their fleet vehicles to propane.
Today we will be focusing on the availability of propane and its affordable price. The following presentation should provide you with a good understanding of propane's many advantages.
With a $10 billion impact on the Canadian economy each year, Canada's propane industry supports the livelihood of over 20,000 Canadians, while contributing over $900 million in annual taxes and royalties. Nearly 100% of propane consumed in Canada is produced domestically. In Canada, approximately 83% of propane is produced from natural gas processing, and the remaining 17% from crude oil refining.
Your committee is conducting a study of innovative technologies in all modes of transportation that are commercially viable and relevant to Canada. Propane is commercially viable and relevant to Canada.
The propane industry has a role to play in a clean energy mix and is committed to maximizing its value to Canadians over the long term. Canada has a well-developed propane infrastructure, with tremendous capacity to produce an abundant supply with high portability across Canada and into the United States.
Propane is such a clean-burning fuel that it is often used for vehicles that operate indoors. In fact, I'm sure that each and every one of you has seen the most visible indoor vehicle that runs on propane, the ice resurfacing machine commonly known as the Zamboni.
In the industrial sector, forklifts use propane fuel not only for vehicle propulsion but also for load-lifting work. Many proposals for fighting climate change and reducing the environmental impact of energy use will have to wait for new technologies to be perfected; however, propane produced right here in Canada can make major and immediate contributions using today's technologies.
Some of you will recall the many gas vehicles that were converted to propane during the 1980s and 1990s. More than 13 million vehicles throughout the world are fueled by propane. In Canada, the figures are more modest, but right now we are witnessing a renewed interest in propane-fueled vehicles for both environmental and economic reasons.
Since people are looking for ways to reduce expenditures and greenhouse gas emissions, for many vehicle fleets, including the federal government's car fleet, we believe that Canada's propane sector can contribute significantly to meeting those objectives.
In comparison with conventional energy sources, propane produces less greenhouse gases and air pollutants for nearly all of the applications where it is used. Propane-fueled vehicle fleets produce up to 26% less greenhouse gases than gas-fueled vehicles, representing a kilo of greenhouse gas for each 36 kilometres travelled, and approximately 50% fewer pollutants and other emissions found in smog created by gas engines.
One private corporation that has a significant propane fleet is United Parcel Service. UPS currently has more than 600 propane vehicles in Canada, including some that are being used here in Ottawa. Six other examples of organizations that have opted for propane and are benefiting from its economic and environmental advantages are TransHelp, from the Peel region, the London Police department, Airways Transit, ThyssenKrupp Elevator, the city of Prince George and Canada Post.
TransHelp from the Peel region was motivated primarily because of environmental protection concerns. Their engines idle in zones that are sensitive to pollutants, such as in hospital admitting areas, and because their passengers have special needs, they have to ensure that the vehicles' temperature is maintained.
As for the London Police department, almost all of its 60 patrol vehicles are fuelled by propane and, over the years, significant savings amounting to millions of dollars have been achieved while maintaining an impressive safety record.
Airways Transit, the largest provider of on-demand, shared-ride airport ground transportation in Canada, operates a fleet that is 100% fuelled by propane. Compared to the use of gasoline-fuelled fleet vehicles, the use of propane has resulted in a reduction of 588 tonnes of greenhouse gas emissions per year for Airways Transit.
ThyssenKrupp Elevator, the largest producer of elevators, is running eight Roush CleanTech Ford E-150 vans and three Roush CleanTech F-150 pickup trucks. They have eight more propane vehicles on order. By the second quarter of 2012, ThyssenKrupp Elevator will have 19 propane-fuelled vehicles—which equals one-third of their fleet in Phoenix—running on this clean-burning alternative fuel.
Their commitment to propane extends further west, with six Ford E-150 vans on order for Seattle, eight for L.A., and 10 for San Diego. According to ThyssenKrupp's director of fleets, Mr. Armstrong, Phoenix-area service vehicles average 25,000 miles each year. This means that for each vehicle purchased, ThyssenKrupp Elevator is reducing its carbon footprint by 12,237 pounds of carbon dioxide each year, for a total of more than 67 tons annually across 11 vehicles already in use.
Just recently, the City of Prince George unanimously approved a city green fleet strategic plan, which includes a pilot project to convert five city vehicles to propane as part of the 2012 action plan. The project will be examined with the possibility of expanding it into 2013.
Finally, Canada Post currently has 100 medium-duty parcel delivery propane vehicles, and an additional 200 vehicles will be converted this year. They also have 10 mail delivery light vans and 20 patrol cars, used by postal inspectors, operating on propane today. Canada Post also has one operational propane refuelling station in Ottawa and plans to construct two additional stations this year.
We believe that there exist tremendous opportunities for many fleets to adopt the use of propane, which would not only help them combat climate change but would also reduce their operating expenses. This is why we are asking this committee to recommend to the Minister of Natural Resources that propane be included as part of the natural gas deployment road map, which has as its purpose to identify the optimal use of natural gas in Canada's transportation sector.
In 2010, under the ecoTechnology for Vehicles program, Transport Canada and Roush collaborated to test a propane-fuelled Ford E-150 van. The test results support the industry position that propane is a clean, affordable, efficient, and sustainable option when considering alternative transportation fuels. In this specific case, the medium-duty propane vehicle tested had carbon dioxide emission reductions of 11% compared to conventional fuel, based on combined city/highway emission results.
Canada's federal government currently faces a number of challenges that should favour their adoption of alternative fuels such as propane.
These challenges include the federal government emission reduction target of 17% from 2005 levels by 2020. The use of propane-powered vehicles on their own can achieve a reduction of up to 26%.
Next, budgetary pressures could be reduced through the application of energy alternatives that yield significant operating cost reductions. Over the last decade, on average, propane has been sold at 36% less than gasoline.
I should also add that the public is looking for the federal government to lead by example with initiatives that both address budgetary concerns and improve environmental performance. With a fleet over 32,000 vehicles, the federal government has a unique opportunity to save money and reduce its environmental impact by using propane in its fleets.
The federal Alternative Fuels Act is aimed at achieving these very goals by directing the federal government to buy alternative-fuels vehicles or to convert existing ones to operate on alternative fuels such as propane, natural gas, and ethanol. The purpose of the legislation, which took effect in 1997, is to accelerate the use of alternative fuels in motor vehicles in order to reduce the emissions of carbon dioxide and other greenhouse gases.
However, for fiscal year 2009-10, the last year for which we could find data, the Treasury Board Secretariat reported that only approximately 10% of federal vehicles were powered by alternative fuels, and only two vehicles were powered by propane.
One of the reasons stated for this is a lack of availability. We differ. Not only are there over 2,000 refuelling stations across Canada, but fleets can also be easily fuelled at fleet headquarters through a tank card-lock system, just as both Canada Post and UPS do.
we have said that propane is readily accessible and available, and that is the case. Our country currently produces considerably more propane than it uses and we know that we have an ample supply to meet the needs of the future.
We also told you that the price of propane is affordable. The vehicle fleets of companies such as UPS and Airways Transit have proven over and over again the economic benefits of propane.
Propane is also a multi-purpose product. Whether it is used in agricultural applications, as vehicle fuel or as a means of heating our homes, or for many other uses, you can count on propane.
In conclusion, we hope this committee recommends to Minister Oliver that propane be included in any transportation road map and that the federal government lead by example by converting more of their fleet vehicles to propane.
Mr. Chairman, thank you for the opportunity.