Canadian Gas Association CGA Regulatory Course MARCH 2019 Natural Gas in Canada Canadian Gas Association CGA Regulatory Course MARCH 2019

The Canadian Gas association 2 2

Natural Gas

Natural Gas Natural gas is more than 95% methane (CH4). It is generally located deep under ground in porous rock formations sandwiched or trapped between more solid rock formations. RNG, CNG, LNG all are forms of natural gas. Biomethane and biogas are raw gas that may not be up to pipeline quality. They process out the water and other nasties. They add in mercaptan (odourant) to make it easy to smell if there is a leak

Natural Gas attributes Affordable Annual production of over 2.8 trillion cubic feet to meet over 30% of Canada’s energy needs in more than 6.5 million homes, businesses, and industry; Canada’s robust supply outlook provides increased confidence in future price competitiveness. Abundant More than 100 years of supply at current production levels. Unconventional gas has fundamentally changed North America’s supply picture, providing long-term security and reliability. Clean Efficient and clean burning energy choice; fewer emissions than many other fuels; important partner for renewables and emerging low-emission technologies. Versatile Can improve end-use efficiency, contribute to lower emissions, and provide flexible partner in power generation and transportation. Reliable Comes from a variety of sources and is supported by extensive storage and pipeline networks. Safe Leaders in complying with stringent safety standards and regulations at all stages of natural gas exploration, production, transportation, distribution and use. 5 5

The resource base Natural gas resource base estimated at 1,278.1 tcf. Over 200 years of supply. Marketable production from that resource base totaled 5.73 trillion cubic feet (tcf) in 2017.   Canadian Natural Gas Resources & Reserves * (tcf) Resource estimates Conventional (excl tight gas) 68.1 Tight Gas 511.6 CBM 47.8 Shale Gas 370.5 Frontier 222.7 Other / Associated 9.0 Proven reserves included above RNG Resources 48.4 Total Resources & Reserves 1278.1 * Source: NEB Energy Futures Report, Reference case, October 2016 Total Resource Base 1278 trillion cubic feet (tcf)

Natural gas exploration

Natural gas trade

Natural gas production

Natural gas FINAL DEMAND

Natural gas use

Natural gas employment

Natural gas investment

Natural gas gdp

Natural gas pipelines

Natural gas storage

ENERGY COMMODITY prices

Delivered ENERGY COst

GLOBAL Natural gas prices

Natural gas consumers – BY TYPE

Natural gas consumers – BY REGION

Natural gas consumer spending

Natural gas – IN HOMES Statistics Canada reports that total household spending on natural gas decreased from $7.3 billion in 2007 to $6.9 billion in 2017, driven by ever lower prices. Meanwhile, StatsCan reports that electricity spending has increased from $15.3 billion in 2007 to $20.5 billion in 2017. A cost-comparison of natural gas, to electricity, heating oil, and propane and heat pump/electric shows it’s the lowest cost residential energy option. In 2018, it cost the average household between $1,077 to $4,582 to heat their home. Some could save as much $3,500 by using natural gas. 23 23

NATURAL GAS – IN TRANSPORTATION On Road: Commercial Canadian heavy engine technologies: Reduce lifecycle carbon emissions by 20-25% and 85-90% using renewable natural gas (RNG) Lower cost fuel for trucking, refuse, transit, vocational trucks. For Marine: Opportunities on Great Lakes. Ferry applications. For Rail: Strategic re-fuelling hubs can create a cleaner, safer, more economic North American rail re-fuelling network. For Off-Road LNG in Canadian mining and other vehicle operations to improve competitiveness, attract investment and lower cost and emissions. Heavy duty, medium, and freight light duty: 35% of Canadian Transportation Energy Use Marine: 4% of Canadian Transportation Energy Use Freight rail: 3% of Canadian Transportation Energy Use Off road: 4% of Canadian Transportation Energy Use 24 24

NATURAL GAS – GHG EMISSIONS

NATURAL GAS – GHG EMISSIONS

NATURAL GAS – GHG EMISSIONS

NATURAL GAS – FUTURE USE Biofuels and Emerging Energy includes biomass (wood), solar, geothermal, hydrogen, ethanol and biodiesel. Other includes coal, coke, and coke oven gas, unless otherwise listed.

NATURAL GAS – DECISION TRACKER www.trackenergyregs.ca

NATURAL GAS – ENERGY REGULATION QUARTERLY www.energyregulationquarterly.ca

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