It is good to see the…

It is good to see the government is starting to look at energy as a whole instead of in silos of electricity, gas, and transportation fuels. This is critical to the next stage of decarbonization and I agree that an arbitrary deadline for removing natural gas from the electricity sector is unlikely to produce the optimal path forward. Decarbonization should be pursued across all energy usage focusing aggressively on the areas where emissions can be cut the most quickly and at the lowest possible cost. We should be willing to accept a small amount of gas remain in use in the electricity sector if, and only if, it enables far greater reductions in wasteful and inefficient fossil fuel use across the rest of these sectors.

Unfortunately, both this consultation and Bill 165 use manipulative and inaccurate language to leverage the challenges of winding down the gas sector that can be addressed to instead justify expanding the use of natural gas in ways that will be economically and ecologically harmful to the people of Ontario. The OEB is in not a progressive organization and the fact that their Dec 2023 decision shifted costs from the public to those seeking new gas services is because the economic risk of investing in new gas infrastructure at this stage is undeniable. Politicians with little to no understanding of energy markets overrule these experts and claim to be “keeping energy costs down” with no credible justification while in reality they are burdening all of us with considerable unnecessary cost and risk going forward. Natural gas is not cheaper or less emitting than the other solutions available, there are challenges to be overcome but how the Ontario government is engaging with this is not helpful. The situations where gas appears cheaper are in almost all cases due to lock in from building our infrastructure to depend on it. The biggest mistake we could make at this point is further increasing out dependency by expanding the gas network or encouraging new low value uses of gas including space heating.

Ontario will be best positioned if we begin cutting back the gas network by focusing on applications that are most valuable and efficient and letting go of high cost and complex networks that were built to burn a precious resource as quickly and inefficiently as possible. Certain critical segments of the gas infrastructure may still prove useful where gas can back up cleaner energy sources and efficiency is maximized through systems like co/tri-generation and district heating. Gas infrastructure feeding single detached homes is destined to become a stranded asset that will burden the still useful parts of the system. Expanding this network to customers that never were economically viable simply makes this problem worse and is likely to end up as a cost to taxpayers unless we start thinking ahead.

Finally, this consultation brings up Renewable Natural Gas (RNG), Hydrogen and Carbon Capture and Storage (CCS) and while each will have some role in decarbonization how they are used here to justify continued or expanded gas use is nothing more than greenwashing. RNG is limited in scale and will never come close to providing for gas usage at our current rate of consumption and therefore provides no justification for maintaining the status quo or expansion. Hydrogen will have a range of essential uses but home heating is both economically and thermodynamically idiotic and will never be viable with transportation uses only slightly less unrealistic due many problematic characteristics, very low efficiency being only one. Adding hydrogen to existing gas lines can be thought of as watering them down as energy density per unit volume is far too low to work with or in place of gas effectively. Society will need large quantities of clean hydrogen to displace the hydrogen currently sourced from methane reforming for industry, not to heat homes or power vehicles. CCS may play some role but is likely to remain economically unrealistic. For it to have any chance requires centralized point sources of emissions and is therefore another reason to stop expanding gas infrastructure for wasteful small-scale end uses.

• What principles should the government provide to the OEB to help inform the Board’s ongoing development of natural gas connection policies?

• The private sector should take on the risk/cost of expansion of gas infrastructure, not taxpayers. This is consistent with the Dec 2023 OEB decision. If the claim is that access to gas will result in a net savings vs what they are currently paying there cannot be a need for supporting funds. If the claim is it saves money ONLY AFTER government support for expanding the gas network then a fair comparison must consider an equal government investment in support for clean heating options and efficiency upgrades. No honest accounting will find the natural gas comes out as the cheaper option.
• Plan to dismantle the gas grid from least efficient to most efficient. If gas is to have any long-term place in our energy supply it will be far smaller and will need to be both economic and thermodynamically efficient. Residential gas usage is both horribly inefficient and less relevant as building efficiency/insulation increases. Co-gen combined cycle power generation tied to district heating is the most efficient use of gas and may be able to transition to the small amounts of practical RNG to support a long-term roll after the rest of the sector has been retired and should therefore be the last to be shut down.
• Plan for the “utility death spiral” in the gas sector that will drive its decline. Large networks depend on scale to reduce costs and as people disconnect costs to the remaining customers rise causing more to disconnect causing prices to rise... (repeat) Home heating, water heating, cooking and drying are all easily displaced by cheaper faster, more appealing options that don’t use gas and eliminating the fixed charges of the entire gas bill can close the price gap on unit cost of energy. People will start to opt out in large numbers as they see the benefits of cleaner, safer more responsive electric solutions. The role of the regulator is to soften this landing as this industry contracts. Planning this reduction to minimize cost/harm will be challenging enough without further expansion at this late stage. This is either a promise or a threat depending on your view on the intrinsic value of the gas industry. There are many of us who will make it our goal to use this death spiral to address the climate impacts of natural gas. While numbers start small, getting customers off the gas grid will become easier as the fixed costs are driven higher for those who remain. Don’t allow Ontario taxpayers to be the ones left responsible for the liability of an even further over-extended network.

• What role should natural gas play in supporting energy affordability and customer choice in residential and small commercial applications (e.g., space and water heating)?

• Existing infrastructure may be difficult or costly to transition because it is designed/built for gas and this is where it remains necessary to supply these existing customers until the optimal time for transition. For new infrastructure the market interventions required to enable gas use are undermining customer choice by artificially propping up an option that will cost them more down the road.
• Choice already exists when it comes to gas, if private sector entities want to invest in the full cost of new natural gas services (consistent with the OEB 2023 decision) I am not aware of anything stopping them from doing so. The expansions to unserved areas being discussed are subsidies required because an established industry found they are not cost effective. How can this claim to be addressing affordability?
• Using government programs/funding to increase choice should be about overcoming the barriers to entry that prevent otherwise technically competitive technologies from being accessible due to the market structure or power of the incumbent. Investments in new technology such as heat pumps has significant potential to achieve cost reductions and therefore multiply the impact of the investment as a catalyst rather than a crutch.
• Even electric resistance water heating can be more cost effective than gas due to the low EF in gas heated tanks. In low utilization households a electric is likely to use half the energy of a gas due to the combination of the efficiency in heat production and heat loss due to lesser insulation and venting. For high utilization applications the investment in heat pump water heating will pay off many times over. If affordability is the goal give customers easy ways out of their water heater rental contracts so they can switch to electric.

• What role should natural gas play in supporting economic development in Ontario’s industrial and agricultural sectors, including those processes that may be difficult to electrify?

• Technology structured around natural gas is not a growth industry and is therefore a poor area of investment for economic development. Allowing the private sector to take on the risk of investment in natural gas strikes the balance between recognizing where it is unavoidable while incentivising only the new technology that will take its place.
• We need to recognize that changing from our existing infrastructure is challenging especially when any like for like replacement is treated as a sunk cost and any clean or efficient replacement must be justified by an aggressive payback period. Typically, expectations for implementing clean solutions require that they perform better and pay the user to make the switch. This shows just how much of a disadvantage needs to be overcome to get us to make clean and affordable systems the norm.
• We should be focused on bringing in businesses that are pioneering the replacement technologies for all of the hard to decarbonize industries such as steel production (Hamilton, supported by Thorold) cement, aviation, heavy transport, intensive agriculture. These are the economic opportunities with a future and should be where our economic development dollars are invested.

• What role should the government play in supporting and expediting the rational expansion of the natural gas system to make home heating more affordable and support economic growth in communities that are seeking natural gas service?

• The government should provide no support for expansion of natural gas. I do not believe that any gas grid expansion requiring government support is “rational” in the current context. Before supporting any expansions provide the public with studies that have been completed showing that an expansion at this stage results in a lower cost of energy (including the contribution by government) and a realistic plan for addressing emissions.
• The government should engage with these communities to show them lower cost alternatives to gas heating and provide support for efficiency upgrades that will actually reduce their costs. Unfortunately, we have considerable cultural inertia to overcome and the belief that gas is the cheapest option is embedded for many people. Communicating and catalysing alternatives will be an essential roll for all of us that government should be leading.
• Access to gas will not make home heating more affordable it will drive UP costs in several ways. Government support is not factored in. If it were cheaper to build the network AND pay for the gas they would build without support. The cost of delay is also significant and the industry that is reluctant to change and actively slowing this transition. Heat pumps are identical to air conditioners and anywhere an air conditioner and furnace has been installed a heat pump would be less materials, less labour and less overall complexity. The cost barrier is maintained/created by a lack of momentum which will only come about when we commit to this transition. Finally, there are the future costs. Already the gas industry will be left with massive stranded assets. Expansion at this stage will add to these costs and it is naive to believe these costs will all be internalized by the industry.

• For natural gas expansion projects receiving government support, should the approvals processes be streamlined to support affordable home heating for Ontarians? In what ways?

• No government support should be provided for gas expansion projects, they are not economically viable for good reason. The suggestion that they should get streamlined approvals is simply an additional form of subsidy
• If approvals can be streamlined without negative impacts they should be streamlined universally for all projects, gas or otherwise. We should not have approval processes in place that can be discarded for convenience or they are by definition wasteful and inefficient to begin with and should be eliminated. If there is a cost of some form from the reduced approval process (economic, social or environmental) then this is simply another externalized cost from this industry.

• ,What role should natural gas play in supporting power system security and resiliency?

• Gas should be used only when sustainable alternatives are unable to cost effectively deliver the necessary energy after renewable energy, energy storage and demand response have been deployed optimally and should not be used anywhere near as much as it is today. We have examples from just a few years ago showing that far lower dependence on gas fired generation is possible but have done nothing to maintain the necessary pace of new procurement of clean energy.
• Existing natural gas should be permitted to be displaced by clean energy in any instance where grid capacity is currently reserved for natural gas. Artificially reducing the LCOE of natural gas by reserving capacity provides false economies for this technology. The claim that gas must be retained for its reliability is undermined by the frequent use of gas to meet day to day needs. When gas is deployed on a regular basis, as it is now in Ontario, that resource is no longer available to meet peaks or address emergencies and makes clear that is not the reason gas is being retained.
• Existing natural gas generation should be evaluated to identify those which are of the highest strategic importance and operate the most efficiently so that an optimized triage can be planned during the phase down. Retaining more efficient combined cycle plants should be prioritized not inefficient peaking plants. Energy storage in the form of batteries is currently most cost effective for short durations. While combined cycle cannot respond to rapid peaks these two resources can be used together to address longer duration shortfalls with batteries carrying the load while slower more efficient gas plants come online.

• What role should natural gas play in offsetting higher GHG-emitting fuel sources?

• Coal is no longer used for electricity production in Ontario and the upstream impacts of methane emissions from the extraction and distribution of natural gas are significant and underreported. The claimed GHG advantages of natural gas were at least overstated and possibly do not even exist. It is unclear what higher GHG-emitting fuel sources the government is suggesting replacing but we are long past the time where the “transition fuels” argument is relevant.
• We should be sceptical that claimed GHG reduction due to switching to natural gas would actually materialize and will be far better off if we simply push forward to non-emitting solutions instead.

• What are the challenges and opportunities for enhanced energy efficiency, adoption of clean fuels (e.g., RNG, Hydrogen) and emission reduction methods (e.g., carbon capture and storage) to lower emissions in the natural gas system?

• Fossil fuels have made great strides in efficiency but are now reaching the limits of what can be obtained and are seeing diminishing returns. What is achieved in the lab is also poorly replicated in real life as you push this boundary. Improving efficiency is still the lowest cost option when looking at a broader scope and things such as improving building envelopes and capturing and sharing waste heat. This is where efficiency efforts should be focused, on areas where energy savings will continue to be applicable after the switch away from natural gas.
• RNG should be developed where economically viable and environmentally suitable and should be linked to high value end uses to the extent possible due to its limited total potential. RNG runs a very real risk that attempts to scale it will result in land use conflicts with both food production and sensitive ecosystems. RNG is a great niche fuel that should be produced wherever municipal, industrial or forestry waste can be best utilized for this purpose but we should be very cautious about dedicated sources of feedstock and should accept that the scale of this technology is limited.
• Green hydrogen should be developed collocated with industrial off takers since transportation and storage are far more challenging than most people understand. The pipe dream of hydrogen for heating or vehicles needs to be dropped because it is causing poor decisions to be made in an industry that needs to grow but with a focus on the use cases that actually make sense.