Canadian Natural Gas

The Role of Natural Gas Today and Tomorrow

The Role of Natural Gas
Today and Tomorrow
n The new abundance of natural gas supply provides a reliable source of affordable, efficient energy
for a wide range of industrial processes, particularly those requiring thermal heat or steam. The
lower emissions of natural gas, and the ability to install combined heat and power technology
provide environmental benefits.
n Canadian natural gas is the smart choice for a variety of space and water heating (and cooling)
applications, and the highly efficient technology available today can be “right sized” to meet the
needs of any building.
n The ability to efficiently generate electricity using natural gas pro provides opportunities for
system planners to make power available where and when it is needed. Natural gas provides
environmental benefits compared with other thermal generation sources and its “on-off”
availability make it a good partner for renewable generation such as wind and solar.
n For heavy duty transport vehicles and for urban fleet vehicles, using natural gas as a fuel can
provide over-life cost benefits for fleet owners, along with environmental benefits. Canadian
companies are global leaders in the development and deployment of today’s natural gas vehicle
technologies.

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 “ Canadian Natural Gas is helping
Canadians meet their environmental
objectives while contributing to

”
economic growth.

Canadian Natural Gas is Smart Energy

A modern steel mill in Hamilton, Ontario; a lively hockey arena in Vancouver; a bustling shopping mall
in Calgary; a cozy home in Montreal; and a high-technology hospital in Halifax all have something in
common. They can benefit from clean, efficient, abundant natural gas.

Across the country, Canadian Natural Gas is helping Canadians meet their environmental objectives
while contributing to economic growth.

Using natural gas has many benefits:

n Choosing natural gas for space, water and process heating in the residential, commercial and
industrial sectors can decrease the demand for electricity generation. This can improve the
overall efficiency of energy use and reduce greenhouse gas emissions.
n Choosing natural gas as a transportation fuel in heavy duty highway truck and urban fleet
applications can reduce costs over the full life of the vehicle as well as decrease vehicle
emissions.
n Choosing the clean burning, multi-use capability of natural gas for electricity generation can
maximize the energy potential of gas, using primary energy for heat and generating electricity
at the same time. New combined heat/power systems are already benefitting many industries
and are now emerging in new home systems.

Canadian Natural Gas is not a solution to every energy challenge, but when it is used with
technologies that take full advantage of the unique attributes of natural gas, it is clearly the smart
choice.

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Smart Energy for Residential & Commercial Use
TODAY
The primary residential and
commercial use of energy is
for space and water heating.
Natural gas is uniquely suited
for smaller scale applications
in residential and commercial
environments. The low
emissions, instant heat
characteristics, and on-demand
availability of natural gas already
make it a preferred choice for
residential and commercial
energy needs wherever it is
available to consumers.
Canada’s residential and
commercial sectors account for
47 per cent of Canadian end-
use natural gas consumption.
In Ontario over 3 million
homes and businesses receive
natural gas service, while gas
companies in Alberta and British
Nearly half of all residential and commercial energy end use in Canada is provided
by natural gas.
Residential & Commercial Energy by end use
4% Space Cooling 7% Lighting
18% Appliances + Auxiliarly Equip.
Columbia each serve over one heating intensity declined
million locations. approximately 20 per cent
(figure 3). In roughly the same
Consumers also choose period, residential use of natural
natural gas for appliances gas has declined 11 per cent
such as stoves, barbecues since the early 1990s. This
or clothes dryers, for space change has been driven by
cooling, and even for elegant increasingly efficient natural gas
outdoor lighting. Direct use use.
of natural gas can significantly
reduce electricity generation Similar energy efficiency
requirements and ease the peak gains have been made in the
load demand for electric power. commercial and institutional
sector. From 1990 to 2007,
Energy efficiency is important to energy intensity in this sector
Canadians, and over time there in Canada has improved by 9
has been increasingly efficient per cent. Every new generation
use of natural gas. Since of commercial building brings
1990, the number of houses in greater improvements and
Canada has increased by 27 per allows better space heating
cent and they are 34 per cent efficiency.
larger. At the same time space
heating intensity and water
Source: NRCan End Use Database
Residential & Commercial Energy Use by fuel type
14% Water Heat 2% Other 2% Heavy Fuel 4% Wood
57% Space Heat 4% Heating Oil 42% Electricity 46% Natural Gas
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 Residential Natural Gas Use per customer
150

120
Gigajoules/year

90

60

30

1990-2007

Appliances Water Heating Space Heating

Canadian lifestyles are increasingly energy efficient. While not illustrated here,
commercial energy efficiency is following the same trend.
Source: NRCan End Use Database

SMART ENERGY FOR THE FUTURE

The commercial and institutional efficiency natural gas boilers excellent complement to gas-
sector is particularly well- to deliver year-round comfort fired hot water heating.
positioned to benefit from in Manitoba’s extreme climate. Canadian residential natural
natural gas energy technologies The building is highly energy gas consumers will continue to
at a scale between the smaller efficient, , using less than one reach new heights in efficiency.
residential and the larger quarter the total energy used in A national minimum energy
industrial consumer. Integrated an average commercial building performance standard is already
systems can take advantage of in Manitoba. in place, requiring all gas
high-efficiency natural gas, such furnaces manufactured after
as combined heat and power Natural gas’ capabilities will December 31, 2009 to have a
systems. When these are paired continue to make it an ideal minimum fuel efficiency of 90
with modern building standards, choice either alone or partnered per cent. This new regulation
energy efficiency can be fully with other energy sources for is part of the ongoing effort
leveraged. One example is the space heating, water heating, to address climate change
new Manitoba Hydro Place in cooking, and drying applications and promote gains in energy
Winnipeg. This 22-storey office and in hybrid applications. efficiency resulting in cost
building blends passive solar Natural gas is well-suited to savings for Canadians.
systems with geothermal heat pair with renewable fuels. For
exchangers and eight high- example, solar energy is an

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Smart Energy for Industrial Use
TODAY
Natural gas has many important
industrial uses. It is a feedstock
for chemical processes, a fuel
for process heat applications, a
source for hydrogen production
through steam reformation,
and an important fuel for power
generation. The consistent
heat offered by natural gas
combustion, the absence of
oils and waxes, the negligible
sulphur content, the zero ash
content, and the negligible
particulates also make it ideal
for use in industrial kilns and
blast furnaces.
The industrial sector
in Canada accounts
Fact: for 40 percent of
Canadian natural
gas consumption.
The industrial sector in Canada
accounts for 40 percent
of Canadian natural gas
consumption. Industrial gas
demand is centred most heavily
in Ontario and Alberta. This
sector is actively focused on
improving energy efficiency.
For example, members of the
Canadian Industry Program for
Energy Conversion (CIPEC) --
an organization of companies
contributing 28% of Canada’s
GDP and employing
3.5 million workers -- have
reduced their combined energy
intensity nearly 12 percent
between 1990 and 2007
through investments in new
technologies, equipment and
processes (CIPEC Annual
Report 2009). In 2007 alone,
improved energy efficiency
by CIPEC members enabled
Canadian industry to avoid $2.1
billion in purchased energy –
enough energy to heat almost
2.7 million Canadian households
for one year.
Of course, some reductions in
natural gas consumption can
be linked to declining North
American natural gas demand
Canadian Industrial Natural Gas Trends
1200
1000
800
Terajoules
600
400
200
0
Other Manufacturing
Motors/Vehicles
Source: NRCan, End Use Database
in the pulp, paper and forest
and chemical sectors (among
others) due to both the recent
global economic recession and
the closure of energy intensive
plants. However these declines
have been more than offset
by an increase in natural gas
demand in the upstream mining
sector especially in the Alberta
oil sands (shown in Figure 5)
where natural gas is used in the
oil recovery process including
steam generation for in situ
recovery of bitumen. Reduced
domestic demand also provides
additional opportunities to
explore natural gas export
markets.
1990-2007
Upstream Mining Oil/Gas Refining Pulp/Wood/Paper
Metal Food Mining
Construction Chemicals
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 “ Industry’s sizeable energy needs mean that the
increased energy efficiency available through the use
of natural gas can decrease their total energy use, cut

”
costs, and improve their competitiveness.

SMART ENERGY FOR THE FUTURE

An increase in the supply of
affordable natural gas can
help promote economic
growth in the industrial sector.
Natural gas will continue
to be a vital industrial fuel
because of its adaptability,
cleanliness, low greenhouse
gas emissions and high
reliability. The incorporation
of appropriate heat recovery
technology means that natural
gas efficiency will improve,
boosting the cost-effectiveness
of process heat or mechanical
power. Expected innovations
in ultra high-efficiency boilers
with very small nitrogen oxide
(NOx) emissions and new
burner designs with integrated
heat recovery devices will also
substantially increase the overall
efficiency of natural gas use in
high-temperature applications.
The considerable benefits
natural gas can offer as a fuel
for distributed power generation
in combined heat and power
(CHP) and combined cooling
and power (CCHP) applications
will also make gas a compelling
choice for industrial use.
Industry’s sizable energy needs,
particularly for process heat
and electricity, mean that the
increased energy efficiency
available through the use of
natural gas can decrease their
total energy use, cut costs, and
improve their competitiveness.

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Smart Energy for Power Generation
TODAY
Natural gas for power accounts
for 13 per cent of Canadian
gas demand, with gas power
generation facilities located in
most provinces. Natural gas
consumption in the power
generation sector has increased
by 70 per cent over the twelve-
year period from 1997 to 2009.
This increase is due to the fact
that the attributes of natural
gas make it the right choice for
meeting electricity needs at the
same time as addressing the
public policy objectives of many
jurisdictions.
The specific abilities and
characteristics of natural gas for
power generation include:
n relatively quick plant
construction times,
n low capital costs, relative to
other forms of generation,
n scalable size to allow gas-
fired generation plants to
meet demand,
n compact physical plant
footprint,
n highly efficient generation
across a broad scale of final
power output capacity,
n low-pollutants profile upon
combustion,
n ability to locate plants close
to thermal loads to benefit
from combined heat and
power (CHP) efficiency in
integrated energy systems,
n quick on-off capability
to meet peak load or
to backstop intermittent
renewable power sources.

Natural Gas Use In Power Generation

8000

7000
Billion cubic feet/year

6000

5000

4000

3000

2000

1000

1997-2007

Source: Statistics Canada, EIA, CGA

Canada United States

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 “ Research and development are leading to
increasingly efficient reciprocating engines
and gas turbines for electricity generation that

”
will contribute to reduced emissions.

SMART ENERGY FOR THE FUTURE

The abundance, reliability
and flexibility of natural gas
make it a good choice to play
a significant role in the future
electricity mix. Research
and development are leading
to increasingly efficient
reciprocating engines and gas
turbines for electric generation
that will contribute to reduced
emissions. Increasingly, natural
gas will be directly combusted
in internal combustion engines
and gas turbines that deliver
“tri-generation” – heat in
winter, cold in summer, and
simultaneous turbine power to
produce electricity year round.
The ability to “right size” natural
gas fired power generation
for the application without
significant losses of efficiency
means that natural gas-fired
distributed generation (DG)
will become more and more
attractive. A well-planned CHP
facility uses the heat generated
from combustion in various
applications such as water
heating, steam generation,
drying, heating, cleaning, or
other process needs as well as
the associated turbine power to
generate electricity for lighting
and electronics. A CHP system
today captures up to 80% of
the energy from the natural gas
fuel, an efficiency level that is
expected to increase.

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 “ Canadian companies are global leaders
in the development and manufacture of natural

”
gas vehicle and station technologies.

Smart Energy for Transportation

TODAY
Natural gas use in transportation
accounts for less than 1 per
cent of total Canadian natural
gas demand, but natural
gas is increasingly seen as
an abundant, cost-effective,
lower carbon fuel that can be
put to better use to reduce
the growth in emissions from
Canada’s transportation sector,
particularly emissions from
urban fleets and heavy duty
transport trucks. A key challenge
to growth is the need for fuel
infrastructure for these vehicles.
Compressed natural gas (CNG)
is a good choice for urban fleets
that return to base for refuelling,
such as transit buses, waste
collection trucks, or municipal
service vehicles. Heavy duty
transport trucks can run on CNG
for specialized applications such
as moving containers at ports,
while the range of natural gas
trucks could be extended by
offering liquefied natural gas
(LNG) at refuelling stations
along designated, high-density
transportation corridors.
Canadian companies are global
leaders in the development
and manufacture of natural
gas vehicle and station
technologies. British Columbia-
based Westport Innovations
and Cummins Westport supply
all of the heavy natural gas
engines that are integrated
into thousands of trucks and
buses produced by more
than 15 original equipment
manufacturers in North
America. IMW Industries
manufactures natural gas
refuelling stations which are
exported to more than 20
countries around the world.
IMW was recently recognized
as British Columbia’s Exporter
of the Year. Powertech Labs is
a global leader in testing and
certifying high pressure fuel
storage cylinders in addition
to providing leadership in the
development of industry codes

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 and standards.

Natural gas is a significantly

less carbon-intensive fuel
than other hydrocarbons. Less
carbon means lower GHG
emissions based not only on
vehicle operation, but also on
natural gas production and
transmission to market via
pipeline. On a well-to-wheels or
total lifecycle basis, natural gas
vehicles typically have 20-25%
lower GHG emissions than
gasoline- or diesel-powered
vehicles.

n Medium- and heavy-duty

natural gas trucks and buses
provide an estimated 20%
reduction in GHG emissions.
In addition, heavy natural
gas engines are quieter than
diesel engines, a benefit
for noise reduction at the
community level.
n A typical transit bus
operating on natural gas
produces 20 tonnes less
of GHG emissions per year
while offering comparable
power and performance to a
diesel transit bus.

“
n A taxi fuelled with
natural gas produces, on
Natural gas vehicles typically average, 7 tonnes less of
have 20-25% lower GHG emissions GHG emissions per year
than gasoline- or diesel-powered compared with its gasoline

”
counterpart. Fuel costs per
vehicles. kilometre are also reduced
by using natural gas.

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SMART ENERGY FOR THE FUTURE
In the context of the overall carbon emissions in Canada. vehicles. Fleets that invest
transportation sector, natural For larger fleets, natural gas in natural gas vehicles today
gas fits best in return-to-base can be competitive in terms will be able to reduce their
fleet and regional corridor of combined operating costs carbon emissions further when
applications where the cost of and recovery of capital over the “green” or renewable natural
infrastructure can be minimized. full life of the vehicle. Highway gas is available in the market in
It is within these areas that tractor-trailers operating on Canada.
most of the growth in the use liquefied or compressed natural
of natural gas as transportation gas reduce carbon emissions As an important first step to
fuel has taken place in the U.S. and have lower operating consider the use of natural
market. High infrastructure costs per kilometre. Trucking gas in the transportation
costs and a lack of factory-direct fleets can gain an economic sector, the Canadian federal
natural gas passenger vehicles advantage while offering their government – led by Natural
mean that natural gas is not customers a greener service. Resources Canada – is
currently a mainstream option partnering with a broad range
for individual consumers. Natural gas vehicles can of stakeholders to develop
operate on either fossil gas a deployment roadmap for
However, there are tangible or renewable natural gas natural gas use in transportation
benefits related to encouraging produced by upgrading biogas in Canada. This work aims to
infrastructure investment for the from waste sources such as identify and address barriers
use of natural gas in medium- landfill gas or biogas from to market development as
and heavy-duty vehicles that anaerobic digesters. The use of well as ensuring appropriate
operate in regional corridors renewable natural gas provides areas of focus and extensive
or in return-to-base mode. a further reduction in lifecycle consideration of end user needs
Such investment would reduce carbon emissions with 85 to in regards to natural gas as a
carbon emissions from the 90 per cent less carbon on transportation fuel.
transportation sector, which is a lifecycle basis than either
one of the largest sources of diesel- or gasoline-powered

Natural Gas Vehicle Emissions*

As compared to gasoline, g/km

Evaporative Emissions Lower by 100%

VOC Lower by 83%
CO Lower by 72%
SOx Lower by 60%
CO2-e Lower by 21%
Particulate Matter Lower by 14%
NOx Lower by 17%
* Full cycle emissions wellhead to wheels Source: NRCan GHGenius model

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Right Fuel, Right Place, Right Time
Canadian natural gas is
versatile, abundant, affordable
and reliable. Natural gas is there
when customers want it, from
the largest generating station to
the most compact downtown
condo.
When home and business
owners choose natural gas,
they are choosing the efficiency,
flexibility and environmental
benefits that natural gas
delivers. Increasingly, extremely
high-efficiency systems will
harness the energy of natural
gas to produce both heat and
power for individual institutions,
businesses, and for entire
communities. This efficiency
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“ Natural gas is the smart fuel choice for
many applications and it will be a foundation
of our future energy mix.
is also used by a range of
industries for modern plant
designs that take advantage
of primary and waste energy
to provide heat, steam and
power. The same advantages
of natural gas make it a good
choice for efficient power
generation, particularly when
reliable electricity is needed to
backstop intermittent renewable
power sources such as wind
turbines. Choosing natural gas
can reduce air emissions, and
improvements in air quality will
be evident when natural gas is
used more extensively to fuel
long-haul heavy transportation
and for urban, return-to-base
fleets.
”
A diversity of fuels will be
required to meet North
America’s energy needs. It’s
important that energy providers
make the right fuel available to
the market in the right place at
the right time. Natural gas is
the smart fuel choice for many
applications and it will be a
foundation for our future energy
mix.
For more information:
Paula Dunlop,
Director, Communications,
Canadian Gas Association
613-748-0057, ext 341
pdunlop@cga.ca
Canadian Natural Gas is a made-in-Canada advocacy project sponsored by the following associations:

Canadian Energy Pipeline Association

Association canadienne de pipelines d’énergie

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© 2010 Canadian Natural Gas.