On November 22, the Canadian Gas Association (CGA), along with Fleet Zero, Atlantica Centre for Energy, and Atlantic Hydrogen Alliance, hosted an innovation forum to discuss the role of natural gas, renewable natural gas (RNG), and hydrogen (H2) in Atlantic Canada’s energy future. Funding support for the forum was provided by Natural Resources Canada’s Clean Fuel Awareness Program, QUEST Canada, and CGA. The following includes highlights of Part 1: Future of gas update.

Opportunities to develop Atlantic Canada’s energy sector will rely on utilizing our natural assets like access to world-class wind regimes, international ports with strategic locations, expertise in onshore and offshore technologies and continued innovation in the energy sector.

Electricity alone cannot deliver all the decarbonization required which is why low carbon gaseous and liquid fuels will help reduce emissions in many areas electricity cannot, and is vital to our region’s energy security.

Atlantic Canada does not currently have unlimited access to natural gas, but we are home to North America’s most modern natural gas distribution network enabling future clean fuels like hydrogen to be incorporated into the system. Atlantic Canada is also home to leading and innovative businesses in the fuel sector, which are making exciting investments to develop domestic opportunities for natural gas and low carbon fuels.

The following highlights of the panel presentations and discussion are condensed notes and not direct quotes. Please refer to the video recording for additional context and to listen to the entire conversation.

Morgan MacGregor, Senior Manager, Business Planning, Liberty Utilities

  • The Canada Energy Regulator has developed a set of Energy Supply and Demand Projections in Canada’s Energy Futures 2023 report outlining energy scenarios to achieve Net Zero by 2050.
  • The data highlights that hydrogen (H2) becomes important, especially in Nova Scotia and New Brunswick, and that Natural gas will continue to have an important role.
  • In Atlantic Canada, electrification will continue to be critical, but natural gas currently plays a big role including in electricity generation including as the third highest source for electricity generation in NB and NS.
  • Deep electrification poses challenges – especially peak demand, and there is a role for low carbon fuels in harder to electrify sectors, and for hybrid space heating along with providing reliability – especially to support variable renewables.
  • RNG is growing in Canada at what appears to be an exponential rate. RNG can sometimes be carbon negative – like from dairy cow waste.
  • Growing demand for hydrogen across Canada. It can be produces from several sources, including from natural gas.
  • Recent Canadian announced projects include ATCO and Enbridge investments in Ontario.
  • Liberty projects
    • Stauffer Farm RNG Project – at a dairy farm in New York. Converting manure from 6000 cows into Natural Gas system.
    • NU:IONIC hydrogen demonstration project – 2,400 kg/day project underway – a NB based company.
  • Liberty, in NB and elsewhere in North America, is committed to the energy transition and low carbon fuels, but also recognizes natural gas will continue to play an important role.
Natural gas has a role to play in net-zero across Canada
Hydrogen Outlook
Hydrogen Outlook

Paul Cheliak, Vice President, Strategy and Delivery, Canadian Gas Association

o The CGA outlined a 4 step plan to leverage gas energy in Canada
  • Across Canada, natural gas is delivered to2/3 of the population with eight provinces serviced and more than 6,000 KMs of distribution lines.
  • Natural gas – delivers double the energy delivered through electricity lines, mostly used Ontario and west. There is significantly less on the east coast to heat homes, but there is a huge opportunity to displace higher emitting fuels with natural gas or low carbon fuels.
  • Natural gas helps save electricity peak demand. Paul posed the question: do we have the equipment, staff, and other resources to build out electrify system as much as we’d need alone? Or do we use both, together, as efficiently as possible?
  • RNG market has taken a while to evolve but it is picking up big steam and there are big investments being made now.
  • Hydrogen is different. There are already big businesses using and investing in it, small players now entering the market.
  • The CGA outlined a 4 step plan to leverage gas energy in Canada (see slide to the left):
    • Define a new narrative
    • Legislative modernization
    • Codes and standards
    • Read the market

Andy Carson, Director, Energy Transition, Irving Oil

  • The role of the Irving Oil Saint John Refinery is important in the region, not only as an employer and an energy provider, but also as a customer for clean fuels.
  • Irving Oil’s refinery in Ireland is evolving as a biofuels producer.
  • Irving Oil’s climate goals drive much of the company’s energy transition work.
  • The company’s energy transition strategy focuses on five key pillars:
    • Greener refineries (there are lots of small, medium, large projects underway)
    • Hydrogen + new energy (both for Irving’s own operational needs, and also for their customers)
    • Biofuels will help those parts of the economy that will struggle from the electrification point of view. Used cooking oils and other recycled oils are used to manufacture renewable diesel which is available at the company’s Whitegate refinery. The product can be a direct and sustainable replacement to conventional diesel, while reducing carbon emissions by up to 90 per cent.
    • Energy trading
    • Future of customer offerings – Focused on creating more value from sources of non-fuel revenue, the company continues to introduce new forms of energy in its retail forecourts and advance the use of sustainable design (including solar canopies at some of its sites to offset the energy required to power the fuel dispensers). As Irving Oil continues to expand its EV network, the company has introduced its first Irving-branded EV chargers in New England and is actively planning further development and deployment of EV charging at strategic locations in certain regions in which the company operates.
  • RNG developments: The company has recently announced offtake agreements from companies in both Alberta and Rhode Island.
  • Today, the Irving Oil Saint John Refinery is the largest producer of hydrogen in Atlantic Canada and one of the largest producers in Canada. The company is actively looking at lower carbon options to produce hydrogen.

Derek Estabrook, Vice President, Business Development, Eastward Energy

Peak Demand and Gas
Energy End Use NS
  • Nova Scotia uses a lot of energy and only about 15% today is what we’d consider clean. This clean energy in the future must be reliable and affordable.
  • Getting to net zero in NS and Atlantic Canada will require an all-hand-on-deck approach. That is why Eastward Energy is working on sustainable solutions, many energy solutions, to help NS achieve its decarbonization goals.
  • Clean fuels and technologies (such as natural gas heat pumps and hybrid heating systems)
  • We use a lot of energy in Nova Scotia. About 17% used in heavy transportation, 12% in industrial, 18% in commercial and institutional buildings. Some of these uses can be electrified more easily than others.
  • NS’s natural gas demand goes up to about 5 to 7 times baseload during cold winter months, which can add to electrification challenges. Gas can easily be stored to help meet peak demand.
  • Coefficiency of performance for electric heat pump decreases on the coldest days. Natural gas or hybrid heat pumps can also help minimize electric demand as it uses very little electricity. Doing one pilot now, looking at other technologies for smaller dwellings for space heating and, in some cases, hot water as well.
  • Gas system also improves the resiliency of our energy system (its underground and protected from weather events). Typical Eastward Energy customer sees a one-hour outage once every 70 years.
  • Green hydrogen will help decarbonize sectors that are hard to abate. Most diesel here today used for buses, trucking, trains and marine vessels. Batteries and fuel cells both have strengths and challenges – we need to find the right technology for the right application.
  • Green hydrogen can help store energy, especially if made form affordable surplus wind.
  • We need to overcome some challenges to get hydrogen to take off in NS. Its hard to build supply without the demand.
  • Hydrogen hubs will help solve this chicken and egg dilemma – working elsewhere in Canada and the world. Renewable electricity à green hydrogen production à distribution à end users.
  • Dalhousie Green Hydrogen Research Cluster was recently launched to conduct research in several important areas ranging from hydrogen production, utilization, blending and combustion of hydrogen enriched natural gas in gas appliances as well as socio-economic impacts of hydrogen development. This cluster is a good signal that the potential for hydrogen here is bright.

Moderator prepared question:

Michelle Robichaud, President of the Atlantica Centre for Energy: We’ve heard several exciting projects developing for low carbon fuels in the Maritimes. What are the top barriers these projects must overcome to be successful and grow?

Morgan – I think there are a lot of barriers, including cost, but often think of the harmonizing of codes and standards – across the Atlantic provinces. Same for the United States, NH to NY, what do they follow? Utilities learn best from each other. Common standards means utilities can work together.

Paul – legislative modernization. The Acts that ever utility and regulators operate under, utilities can’t spend any money on clean fuels on enabling regulations or legislation. This is foundational. Every project being advanced are happening in BC and Quebec, where they have the regulations. ON is a pilot. This is an inefficient way of doing businesses – legislation and regulations must be fit for purpose.

Andy – from and industrial user – the regulatory stability makes these investments possible from a business case. Emission reduction is a driver, but uncertainty or instability in benefits from reducing emissions, this creates a cumbersome business case. We need to be thoughtful about managing risk. From a broader perspective – regulatory competition – there are incredible incentives elsewhere for low carbon investments (IRA, for example) – these are attracting developments from Canada. How do we set up the right climate to encourage these investments here?

Derek – we need better alignment between the policy framework and regulatory framework. Very ambitious policies, but not the regulations in place to implement the policies. We think about being leaders developing low carbon fuels projects – benefit for being at the forefront – but also brings challenges ‘bushwhacking.’ But governments are waiting for utilities and energy providers to come to them with challenges to address.

Additional questions from the audience are available in the video link.