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Canadian Natural Gas The Role of Natural Gas Today and Tomorrow


The Role of Natural Gas Today and Tomorrow n

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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. 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. 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. 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

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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. 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. 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. 2


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 enduse natural gas consumption. In Ontario over 3 million homes and businesses receive natural gas service, while gas companies in Alberta and British

Columbia each serve over one million locations.

heating intensity declined approximately 20 per cent (figure 3). In roughly the same period, residential use of natural gas has declined 11 per cent since the early 1990s. This change has been driven by increasingly efficient natural gas use.

Consumers also choose natural gas for appliances such as stoves, barbecues or clothes dryers, for space cooling, and even for elegant outdoor lighting. Direct 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

Nearly half of all residential and commercial energy end use in Canada is provided by natural gas. Source: NRCan End Use Database Residential & Commercial Energy Use by fuel type

Residential & Commercial Energy by end use

4% 18%

Space Cooling

7%

Lighting

Appliances + Auxiliarly Equip.

14%

Water Heat

2%

Other

57%

Space Heat

4%

Heating Oil

2%

Heavy Fuel

4%

42%

Electricity

46%

Wood Natural Gas

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Residential Natural Gas Use per customer 150

Gigajoules/year

120

90

60

30

0

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 sector is particularly wellto deliver year-round comfort positioned to benefit from in Manitoba’s extreme climate. natural gas energy technologies The building is highly energy at a scale between the smaller efficient, , using less than one residential and the larger quarter the total energy used in industrial consumer. Integrated an average commercial building systems can take advantage of in Manitoba. high-efficiency natural gas, such as combined heat and power Natural gas’ capabilities will systems. When these are paired continue to make it an ideal with modern building standards, choice either alone or partnered energy efficiency can be fully with other energy sources for leveraged. One example is the space heating, water heating, new Manitoba Hydro Place in cooking, and drying applications Winnipeg. This 22-storey office and in hybrid applications. building blends passive solar Natural gas is well-suited to systems with geothermal heat pair with renewable fuels. For exchangers and eight highexample, solar energy is an 4

excellent complement to gasfired hot water heating. Canadian residential natural gas consumers will continue to reach new heights in efficiency. A national minimum energy performance standard is already in place, requiring all gas furnaces manufactured after December 31, 2009 to have a minimum fuel efficiency of 90 per cent. This new regulation is part of the ongoing effort to address climate change and promote gains in energy efficiency resulting in cost savings for Canadians.


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.

Fact:

The industrial sector in Canada accounts for 40 percent of Canadian natural gas consumption.

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

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.

Canadian Industrial Natural Gas Trends 1200

1000

800

Terajoules

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

600

400

200

0

1990-2007

Other Manufacturing

Upstream Mining

Oil/Gas Refining

Pulp/Wood/Paper

Motors/Vehicles

Metal

Food

Mining

Construction

Chemicals

Source: NRCan, End Use Database

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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 6

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.


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 twelveyear 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.

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The specific abilities and characteristics of natural gas for power generation include:

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relatively quick plant construction times, low capital costs, relative to other forms of generation, scalable size to allow gasfired generation plants to meet demand, compact physical plant footprint,

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highly efficient generation across a broad scale of final power output capacity, low-pollutants profile upon combustion, ability to locate plants close to thermal loads to benefit from combined heat and power (CHP) efficiency in integrated energy systems, quick on-off capability to meet peak load or to backstop intermittent renewable power sources.

Natural Gas Use In Power Generation Billion cubic feet/year

8000 7000 6000 5000 4000 3000 2000 1000 0

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 8

“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.


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 Columbiabased 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 9


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

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Natural gas vehicles typically have 20-25% lower GHG emissions than gasoline- or diesel-powered vehicles.

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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. 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. A taxi fuelled with natural gas produces, on average, 7 tonnes less of GHG emissions per year compared with its gasoline counterpart. Fuel costs per kilometre are also reduced by using natural gas.


SMART ENERGY FOR THE FUTURE In the context of the overall carbon emissions in Canada. transportation sector, natural For larger fleets, natural gas gas fits best in return-to-base can be competitive in terms fleet and regional corridor of combined operating costs applications where the cost of and recovery of capital over the infrastructure can be minimized. full life of the vehicle. Highway It is within these areas that tractor-trailers operating on most of the growth in the use liquefied or compressed natural of natural gas as transportation gas reduce carbon emissions fuel has taken place in the U.S. and have lower operating market. High infrastructure costs per kilometre. Trucking costs and a lack of factory-direct fleets can gain an economic natural gas passenger vehicles advantage while offering their mean that natural gas is not customers a greener service. currently a mainstream option for individual consumers. Natural gas vehicles can operate on either fossil gas However, there are tangible or renewable natural gas benefits related to encouraging produced by upgrading biogas infrastructure investment for the from waste sources such as use of natural gas in mediumlandfill gas or biogas from and heavy-duty vehicles that anaerobic digesters. The use of operate in regional corridors renewable natural gas provides or in return-to-base mode. a further reduction in lifecycle Such investment would reduce carbon emissions with 85 to carbon emissions from the 90 per cent less carbon on transportation sector, which is a lifecycle basis than either one of the largest sources of diesel- or gasoline-powered

vehicles. Fleets that invest in natural gas vehicles today will be able to reduce their carbon emissions further when “green” or renewable natural gas is available in the market in Canada. As an important first step to consider the use of natural gas in the transportation sector, the Canadian federal government – led by Natural Resources Canada – is partnering with a broad range of stakeholders to develop a deployment roadmap for natural gas use in transportation in Canada. This work aims to identify and address barriers to market development as well as ensuring appropriate areas of focus and extensive consideration of end user needs in regards to natural gas as a transportation fuel.

Natural Gas Vehicle Emissions* As compared to gasoline, g/km

Evaporative Emissions VOC CO SOx CO2-e Particulate Matter NOx * Full cycle emissions wellhead to wheels

Lower by 100% Lower by 83% Lower by 72% Lower by 60% Lower by 21% Lower by 14% Lower by 17% Source: NRCan GHGenius model 11


Natural gas is the smart fuel choice for many applications and it will be a foundation of our future energy mix.

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 12

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: info@canadiannaturalgas.ca www.canadiannaturalgas.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

Please recycle. © 2011 Canadian Natural Gas.


The Role of Natural Gas Today and Tomorrow