Vancouver’s natural gas plan generating concern and confusion

Vancouver mayor Gregor Robertson. Image: Flickr/COP 21

In recent months, when Vancouver citizens and businesses expressed concerns that the City of Vancouver was planning to ban natural gas, city officials tried to calm their fears with assurances that it was not planning to phase out natural gas per se – just the kind that comes out of the ground.

Some concerned citizens received emails from Coun. Kerry Jang, who told them: “FortisBC already supplies sustainable natural gas, and they are in agreement with general city policy.”

Except FortisBC is not in agreement with the city’s policy and says it is “misleading” for Jang to suggest that it can replace the natural gas it supplies Vancouver with some form of supernatural gas – “renewable natural gas” (RNG).

The methane (RNG) that it currently produces from two landfills and two agricultural waste facilities accounts for just one-quarter of 1% of the natural gas stream in B.C.

Getting to 100% from 0.25% for Vancouver would require roughly 100 landfills, and the cost of producing it would likely erase any cost advantage over heating with hydropower.

“The fantasy of enough renewable natural gas is just a way for [Mayor Gregor] Robertson to try and justify his ban to the public,” said Jordan Bateman, B.C. director for the Canadian Taxpayers Federation.

“Robertson is damning Vancouver residents and businesses to energy poverty – paying hundreds of dollars more a year for energy when they don’t need to. When we talk about affordable housing and cost of living in this city, energy costs should be part of that calculation.”

FortisBC warns that phasing out natural gas in Vancouver could have consequences for its customers outside of Vancouver.

“What that would mean, if people stopped using it [in Vancouver], is those assets become stranded and there’s no revenue to recover those costs, so other consumers in the province would have to start paying for that in rates,” said Jason Wolfe, FortisBC’s director of energy solutions.

Natural gas is plentiful and cheap in B.C. and, until recently, was considered a relatively low-carbon energy source. Used for heating, it is about one-third the cost of heating with electricity.

Fifty-eight per cent of the energy for heat and hot water in Vancouver comes from natural gas. Natural gas produces greenhouse gases, however, so in a carbon-constrained future, its days may be numbered.

Vancouver’s Renewable City Strategy sets a goal of having 100% of Vancouver’s energy needs met through renewable energy by 2050. Starting in 2020, the city plans to begin requiring some new developments to be carbon neutral and all new buildings to be carbon neutral by 2030.

Doug Smith, the City of Vancouver’s director of sustainability, said the city is using its building code to require new buildings to be more energy efficient.

“So we’re not banning anything,” Smith said. “We’re making it so the buildings eventually will become so energy efficient that they won’t really require a lot of energy to heat the building.”

“We’re not phasing out natural gas,” Jang told Business in Vancouver. “What we’re trying to accomplish is to phase out non-renewable sources of natural gas – so fossil fuel natural gas – and encourage renewable gas to replace it.”

But relatively minuscule amounts of RNG are produced from landfills and sewage treatment plants, and it is expensive to produce.

The Lulu Island wastewater treatment plant in Richmond, for example, captures just enough methane to heat the plant itself. The two landfills, one dairy farm and one agricultural waste facility that FortisBC uses to capture methane produce just 250,000 gigajoules of energy annually; Vancouver’s current natural gas demand is 26 million gigajoules per year.

Providing Vancouver with 100% renewable natural gas would be virtually impossible, Doug Stout, FortisBC’s vice-president of market development and external relations, told the mayor and council in a letter at the end of November.

“It is misleading to claim we can supply the entire city [more than 108,000 direct customers] with that volume of RNG at any point in the next 15 years,” he wrote. “To do so, we would need to capture and process methane from more than 100 landfills similar in size to the Vancouver landfill in Delta.”

“We realize that the amounts that are being produced right now are quite small,” Jang conceded. “But we’re trying to encourage it and build the demand for it so that infrastructure and that work actually gets done over the long term.”

But even if FortisBC could get to 100% renewable gas for Vancouver, there might be no cost advantage to it for customers or developers.

The cost of heating a home or business with natural gas is currently about one-third the cost of heating it with electricity, according to FortisBC. That’s comparable to the price difference between non-renewable and renewable natural gas. RNG costs about $10 per gigajoule, compared with $3.50 per gigajoule for regular natural gas, including the carbon tax.

In other words, RNG would be no cheaper than electricity. Developers might therefore decide against installing natural gas piping in new developments. So even if RNG became more widely available, newer developments might not be equipped to use it.

But it’s not just new buildings that FortisBC fears will be lost as customers. According to the company, the city would eventually have to ban all non-renewable natural gas from existing buildings as well to achieve its 100% renewable target by 2050.

Said Wolfe, “The only way to [get to that renewable 2050 goal] is to not have natural gas.”

B.C. Natural Gas Minister Rich Coleman added that eliminating the use of natural gas would increase costs for businesses and households in Vancouver, “and could reduce the number of available jobs for British Columbians in the natural gas industry. I would urge Vancouver to be prudent and to carefully consider the consequences before phasing out natural gas in the city.”

--Business in Vancouver

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