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Issue Category: Issue 1, 2024

  • Aecon

    Supplier, Manufacturer and Contractor Profile

    Where is your company located?

    Aecon is a North American construction and infrastructure development company with global experience. Headquartered in Toronto, Ontario, Aecon delivers integrated solutions to private and public-sector clients through its Construction segment in the Civil, Urban Transportation, Nuclear, Utility and Industrial sectors, and provides project development, financing, investment, management, and operations and maintenance services through its Concessions segment.

    How many employees do you have?

    Aecon is a major utility contractor with over 10,000 employees company-wide across its diverse operating sectors.

    What is the company’s priority over the next five years?

    In the Utilities sector, Aecon has long-standing relationships with key clients. Significant revenues are generated from recurring revenue programs for public and leading private utility-sector clients. Aecon Utilities also recently created an enhanced growth vehicle focused on providing utility infrastructure services across North America through a strategic investment by the Power Opportunities strategy of Oaktree Capital Management. Many of these growth opportunities are tied to climate change mitigation and adaptation as well as decarbonization of energy systems, including public investments in Canada and the U.S.

    What opportunities and challenges does your company face?

    There is a significant level of infrastructure investment underway across Aecon’s focus areas. Aecon is strategically focused on projects and concession opportunities linked to decarbonization, sustainability, and energy transition. In the Utilities sector, Aecon is focused on four end markets including electrical transmission and distribution, renewables and in-home services, telecommunications, and pipeline distribution.

    Across all industries, there is a race for talent in the skilled trades. Aecon is responding and preparing in a number of ways. We’re working to grow the pipeline of skilled workers in Canada through advocacy, partnerships and initiatives that support candidates traditionally underrepresented in construction.

    In your opinion, what will be the role of natural gas in the next 50 years?

    Natural gas is expected to play a key role in the energy mix in combination with other key energy sources. Its versatility and the growth of LNG as a delivery mechanism will link disconnected demand and supply centers. However, the role of natural gas will be influenced by energy regulations, the price of alternative energy forms, and decarbonization policies. As such, the future of natural gas will likely be a balance between its practical utility and the global push towards other lower-emission fuel options.

     

  • An interview with Alberta’s Minister of Environment and Protected Areas, Minister Rebecca Schulz

    An interview with Alberta’s Minister of Environment and Protected Areas, Minister Rebecca Schulz


    Timothy Egan, President and CEO, of the Canadian Gas Association, had an opportunity to speak with Alberta’s Minister of Environment and Protected Areas, Minister Rebecca Schulz, to discuss the value and impact of the natural gas industry in Alberta, in Canada and the world.

    Timothy Egan: As Environment Minister, can you give us a sense of how natural gas plays for your environmental agenda in Alberta?

    Minister Schulz: I think where we may differ, especially from other governments, like our federal government, is that we’re really focused on practical ways to reduce global emissions and achieve carbon neutrality.

    And when we’re talking about neutrality, I think we also define it differently than some other governments, especially our federal government. This agenda isn’t about reaching absolute zero, it’s about how we help to meet those energy demands that are expected to rise by up to 30% between now and 2040.

    We know that fossil fuel production will continue for decades, even with renewables and all the investments we’ve been seeing in that industry in Alberta. This is really about looking at how Albertan natural gas and natural gas from elsewhere in Canada could be part of that overall solution for global emissions. I think that’s where our approach is unique. It’s focused on innovation. It’s not focused on ideology.

    We’re investing in many programs that reduce emissions and still manage to keep our energy sector growing and thriving, and frankly we’ve been doing a great job on that front.

    We’ve been providing leadership. I often talk about methane emissions reduction, where we’ve reduced emissions by 45% since 2014.

    We’ve got 11 and a half million tons of CO2 stored safely and permanently underground through carbon sequestration.

    Natural gas has largely replaced coal as the primary source of electricity in the province.

    We here in Alberta expect to be off coal years ahead of schedule. Of course there were costs to that, but natural gas has really replaced coal on that front, and we’re going to continue to look at how we can reduce methane emissions further.

    We’ve launched our Alberta Security Infrastructure Program (ASIP) to support CCUS, and we’re looking at ways we can reduce emissions sector by sector and, of course, natural gas is part of that – especially when we look at reducing global emissions and doing it quickly by reducing coal use globally. Coal is responsible for over 40% of all energy sector CO2 emissions and global coal use last year reached historically high levels.

    We often talk about India and China opening new coal-powered plants and burning more coal than ever before. Of course, natural gas produces far less emissions than burning coal, and Canada produces the world’s cleanest LNG. That’s really where we see our opportunity because emissions don’t have boundaries, they don’t stop at the border. This is a global issue.

    It’s why we’ve looked at Article 6 under the Paris Agreement and asked the Government of Canada to assist us to find a way to ensure that the Canadian natural gas sector can provide that energy. I think that’s a significant opportunity, not just for Alberta, but also for Canada.

    All the companies that belong here and are operating here in Alberta, and all those workers in these industries, we know that we could help. We believe we could help reduce net global emissions by as much as 221 million tons.

    I think that’s a huge opportunity and could be a major win for us here, both on the economic and the environmental side.

    Timothy Egan: So, you noted how this is not only an Alberta opportunity, but it’s a national opportunity. How do your colleagues, Environment Ministers across the country react to this? What role do you think they see natural gas playing in their jurisdictions and nationally?

    Minister Schulz: I think most of my colleagues are practical. I think they see, obviously, that we need to reduce emissions and we need to keep the lights on.

    We need to be able to reduce emissions and keep life affordable. The availability of affordable, reliable, safe and secure energy continues to be a big topic of conversation amongst Canadians across the country.

    I think that my counterparts are seeing that. When we look at Alberta specifically, we need to make sure we have enough natural gas supply and generation to power homes and businesses.

    The changes being proposed by the federal government under the Clean Electricity Regulations obviously put us at risk. We saw that in January, where our electricity grid was at significant risk in an extreme cold spell. Renewable electricity – which we have in abundance in Alberta – wasn’t able to meet the demand. Dispatchable natural gas was essential: it kept us from freezing. The clean electricity regulations are all about getting rid of natural gas for power generation.

    And we’re not alone in our need for natural gas. Other provinces also rely significantly on it, and other energy sources threatened by the Clean Electricity Regulations, as are other people we have heard from across the country. We have a cold climate right across our country, and I think increasingly we’re seeing other provincial governments and their citizens right across our country say, let’s put ideology aside. Let’s be practical.

    We see it in the carbon tax where seven premiers and 70% of Canadians now oppose it.

    We will, I believe, see that in respect to natural gas where the federal government has seen strong opposition to their electricity regulations because of how they target natural gas. We would ask Canadians to continue to make sure that their voices are heard, for industry to make sure their voices are heard so that we can push the federal government to work with us on realistic solutions.

    It all comes down to keeping energy reliable, affordable, safe and secure, which matters more and more every day to people across our country.

    Timothy Egan: What are your priorities on the international stage?

    Minister Schulz: We’ve made it clear, both me and our Premier Danielle Smith, how important it is to defend and champion our energy industry. And it’s not just to communicate, it’s to champion and advocate for the tremendous innovation that is happening right here in Alberta, especially when it comes to emissions reduction.

    Oftentimes, when we travel around the world, we have a lot of people say, you know what, we didn’t know that you were doing that in Alberta. And I think that’s exactly why we must be at COP 29 to show the world that Alberta will continue to be a leader in emissions reduction and be a powerhouse when it comes to innovation and energy leadership that can help reduce global emissions and drive some of these technological advancements we want to see around the world.

    And I have heard several provinces saying that there is so much more opportunity if we can work together: not just in one region of the province, but right across the country from Alberta to Saskatchewan, all the way to BC and Newfoundland.

    Timothy Egan: Well, Minister, that kind of leadership is a positive sign for us and very motivating for our industry. What words of advice do you have as we continue our work in developing and transporting and distributing natural gas to Canadians?

    Minister Schulz: I would just say to keep advocating and keep innovating. I believe that our energy industry is better than anyone when it comes to innovation.

    When we look at our upstream oil and gas producers, they’re among the nation’s leaders when it comes to clean tech investment. In Canada, total production from the conventional sector has grown by 21%, while carbon dioxide equivalent emissions have gone down by 24% over the last 10 years. Natural gas production grew by 35%. We’ve lowered CO2 equivalent emissions by 22%.

    These are wins, and we need to celebrate them. We know our industry is not only reducing emissions but also maximizing water efficiency and reducing its footprint when it comes to land.

    I would just say continue to innovate, integrate emissions reduction into your planning and operations, and continue to invest in research and development, whether that be CCUS, methane emissions strategies or whatever else.

    On that last point about methane emission reductions, it is almost as if it isn’t a big deal because we have been doing it for so long – the technology that gets us to near zero or almost zero methane emissions on a site has often been in place on that site for 10-12 years. Here, with the Alberta government, we will continue to tell that story because the world absolutely needs responsibly produced oil and natural gas, and the world wants to see emissions reduction. So, we need to continue to show that we can and will do both.

    Timothy Egan: A last question: Can you comment at all on the hydrogen opportunity and how that might play into your view of Alberta’s leadership and Canada’s leadership on environment and energy?

    Minister Schulz: Absolutely. The premier has talked a lot about hydrogen, and I think it brings attention to the fact that natural gas is also a feedstock for other products.

    I think of this as well when we talk about things like plastics that are so dependent on hydrocarbon feedstocks – it is the same point for, hydrogen, ammonia and, petrochemicals. On hydrogen, we are looking to integrate clean hydrogen at scale, whether that be for transportation, heat, power generation and renewable energy storage, industrial use and export markets.

    Of course, there have been lots of conversations with countries around the world about what that’s going to look like and what the worldwide market is estimated to be worth when it comes to hydrogen; we are talking about our natural gas reserves and renewable energy sources, our pipeline network, our infrastructure, and how they all play a role in Canada and in supporting the world’s hydrogen needs.

    Our industry here in Alberta is growing pretty quickly. A 1.3 billion net zero hydrogen energy complex is being built just outside of Edmonton to produce clean hydrogen from natural gas.

    Dow Chemicals made a pretty big announcement as well: investing 8.8 billion to build a net zero petrochemical complex in Fort Saskatchewan.

    I think, of course, when we look at that project, why one of the top chemical producers in the world, a company that can put its capital anywhere, chose Alberta. I think part of it is our government’s efforts to reduce red tape and to bring additional investment here. But of course, it also comes from having access to natural gas in our natural geology.

    So, whether we’re talking about hydrogen, or petrochemicals and plastics, we have a huge amount of opportunity and that’s driven by the availability of natural gas, which just reinforces the importance of this sector.

    Timothy Egan: Thank you so much for taking the time to join us today. Again, we’ve been delighted by how you, the Premier, and your colleagues around the cabinet table have seized on the natural gas file as an opportunity for the world and for Canada. We stand ready and able to continue to work with you as much as possible.

  • You’ve got a friend

    You’ve got a friend

    As U.S. natural gas utilities continue efforts to stave off legislative and regulatory assaults at the state and local levels, they’re receiving welcome support from stakeholders representing diverse interests who understand the real-world impact of forced electrification policies. Together, fuel-choice proponents have held their own in the gas-ban battle.

    When America’s first local gas ban was being debated in Berkeley, California, some of the loudest opposing voices came from restaurants – especially those featuring Asian and Latin fare – who argued the ban would deprive them of the cooking techniques essential to their “flame-dependent” cuisine.

    Fast forward five years to January 2024 in Seattle, where a proposed ban announced by state lawmakers elicited the starkest of warnings from a representative for a trade association of builders throughout the state: Ban natural gas and our power grid will fail.

    As restrictions on natural gas have become a popular strategy for achieving state and local climate goals, utilities have begun to work to ensure that consumers and other stakeholders understand the implications of these proposed restrictions, while also talking up initiatives they are pursuing to reduce their own carbon footprint.

    But in the very public debates over local and statewide bans on new natural gas hookups and total electrification mandates, U.S. utility executives from coast to coast may be humming the tune from Carole King’s 1969 hit, “You’ve got a friend.”

    Indeed, in the five years since the recently overturned Berkeley ban took effect, a diverse array of stakeholders have become indispensable allies in efforts to slow the headlong rush to electrification, says Daniel Lapato, Associate Vice President for State Affairs for the American Gas Association (AGA).

    “I think our opponents try to paint this as a utility-led effort, but at the end of the day I think you’ll see the utilities are just part of the conversation,” Lapato said. “There is a broader conversation with a variety of stakeholders who have begun to realize the impacts gas bans will have on their members, their businesses and their communities.”

    “Ban natural gas and our power grid will fail.”

    Hospital associations, organized labor, small-business groups, low-income advocates, homebuilders and many other stakeholders all have helped turn up the volume and amplify utilities’ own messages about the benefits of the energy source 189 million Americans rely on every day and the risks of banning it.

    So far, utilities are holding their own. Fuel-choice legislation is on the books in 25 states and proposed in eight more. Local gas bans or statewide building electrification codes are in force in 12 states and proposed in nine other states or local jurisdictions, according to the AGA. Forbes reported in March that 70 U.S. cities now have regulations requiring or incentivizing all-electric building construction.

    “These 25 states have allowed the industry and our partners to talk about the benefits of natural gas from a national perspective, because at this point now half the country has preserved fuel choice,” Lapato said. “I think that’s really important to focus on.”

    From his vantage point at AGA, which supports more than 200 local energy companies nationwide, Lapato sees a common thread – getting more people talking about the negative impacts bans on natural gas would have – running through utility efforts to resist moratoriums on new hook-ups and building-code changes that promote electrification.

    “The utilities play a big role in these conversations—helping other stakeholders understand that these discussions are taking place and that this is a time for them to weigh in.”

    Lapato points to a coalition of interests that came together to support a ballot initiative in Spokane that would have blocked the city from implementing a ban on new natural gas hookups. Homebuilders, organized labor, and even a trade association of gas fireplace manufacturers united to talk about the negative impacts a ban would have on housing affordability, small businesses, jobs and consumers.

    The industry’s friends in the fuel-choice battle often have been willing to talk about the risks of forced electrification in a more direct way, plainly and bluntly pointing out the real-world ramifications in ways that hit home with consumers and policymakers alike.

    In January, lawmakers in Washington state revived a bill to ban natural gas a few weeks after a historic cold snap forced Puget Sound Energy to plead with customers to reduce their energy use. Greg Lane, executive vice president of the Building Industry Association of Washington, didn’t mince words when a reporter asked him about the impact of the proposed ban: “Removing natural gas as a source of heating homes and water will cause our electrical grid to fail.”

    At a January press conference in Chicago, officials of the International Union of Operating Engineers (IUOE) Local 150 stood shoulder to shoulder with city leaders opposed to a newly proposed ban on new hook-ups. The union has taken to the airwaves and newspapers with hard-hitting ads slamming Illinois Gov. J.B. Pritzker for a state law enabling local gas bans and regulatory actions that wiped out 1,000 jobs.

    The headline on the “Fight Back” section of the union’s website blares IUOE’s message in red capital letters: “TELL ILLINOIS GOV. PRITZKER AND THE ICC TO LIFT THE NATURAL GAS BAN AND MAKE A PLAN FOR GRADUAL TRANSITION TO CLEAN ENERGY.”

    Nearly a year has passed since North Carolina became the latest state to join the fuel-choice club, but neither have there been any new statewide connection bans nor electrification mandates. However, the legality of bans has come to the forefront since a federal appeals court struck down the Berkeley ordinance in April 2023 in a ruling on a lawsuit brought by the California Restaurant Association (CRA).

    The Ninth Circuit Court of Appeals affirmed its decision in early January, forcing many jurisdictions to weigh the impact on existing or proposed bans. Spokane and Palo Alto subsequently dropped their bans, and Berkeley itself settled the lawsuit in March by agreeing to stop enforcing its ban on new gas hookups and eventually repeal it. Meanwhile, legal challenges to New York’s year-old state law banning new natural gas hookups have been filed based on the same arguments underpinning the Berkeley decision.

    Where legislative efforts to restrict the use of natural gas have foundered, some states and cities are taking the “back-door ban” approach of adopting electrification requirements in building codes or influencing the development of model codes that are pushed down to the state level. Once again, industry partners are weighing in.

    “Some of the loudest and strongest voices in these discussions have been the builders, the HVAC contractors, realtors, the commercial building operators who have really been the ones pushing back because it comes down to cost, cost, cost,” Lapato said. “It’s driving up not just the cost of construction but also the cost of the building itself, whether it’s a home or a commercial building, and that cost is really becoming burdensome.”

    “Given that natural gas accounts for only 4-10% of a home’s total GHG emissions, the focus is misplaced.” – Daniel Lapato, Associate Vice President for State Affairs for the American Gas Association (AGA)

    Lapato says he hasn’t seen many utilities roll out broad consumer-facing communications campaigns aimed at promoting fuel choice because they understand the public doesn’t necessarily focus on abstract energy policy discussions, but rather, engage only when the personal impact becomes clear.

    Last year’s public outcry over a regulator’s suggestion that natural gas stoves might be banned is a case in point. Five states that already had fuel-choice legislation in place – Florida, Georgia, Montana, South Dakota and Tennessee – passed freedom-to-cook laws preventing the prohibition of appliances.

    Unfortunately, the focus on natural gas bans and forced electrification as a strategy for reducing greenhouse gas (GHG) emissions has obscured the important strides utilities are making in reducing the carbon footprint of natural gas, whether through energy efficiency and weatherization efforts, ongoing investments in pipeline integrity or newer decarbonization initiatives such as RNG, certified gas, blue hydrogen and carbon capture, utilization and storage (CCUS) technologies.

    Given that natural gas accounts for only 4-10% of a home’s total GHG emissions, the focus is misplaced, according to Lapato, who says the emissions reductions can as easily be achieved using the natural gas technologies already available and under development at a fraction of the cost of total electrification. And the industry already has the infrastructure in place to deliver lower-carbon energy solutions.

    “…continued efforts to restrict the use of natural gas risk sacrificing the safety, reliability, resilience and affordability that Americans have come to expect from their energy system.”

    “Utilities have been painted as the organization that are trying to argue for the status quo, but what the industry is more accurately making the case around is that these policies stymy our ability to innovate, and that’s what we do best,” Lapato said. “If you really are concerned about emissions reductions, don’t take any tools off the table.”

    With energy experts already setting off alarm bells as U.S. demand for electric power surges due to the proliferation of data centers, the “reshoring” of U.S. manufacturing, and the growth in the use of electric vehicles, continued efforts to restrict the use of natural gas risk sacrificing the safety, reliability, resilience and affordability that Americans have come to expect from their energy system.

    That’s a message U.S. utilities – with the help of the AGA and industry friends – can be expected to prioritize as they continue to position natural gas and the industry’s infrastructure as a critical piece of the emissions-reduction puzzle.

    David Coburn is a strategic thinker, writer, media relations expert and communications consultant leveraging 30-plus years of print journalism and agency public relations experience.

  • Peak demand facts and developments

    Peak demand facts and developments

    The polar vortex that blanketed western Canada this winter made very clear how weather events can have a profound effect on energy demand in Canada: severe cold meant huge amounts of energy were needed to keep Canadians warm. It is reassuring therefore to know that energy utilities design delivery systems to handle extreme – or as the industry says – “peak” demand. In lay terms, that means systems are built to endure the coldest (or warmest) hour of the year.

    In this issue, we examine the particulars of system design for peak demand – in both the natural gas, and the electricity systems in Canada.

    ANNUAL DEMAND AND SEASONAL PEAKS:

    Let’s start by first looking at two broader data points: annual demand and seasonal peaks for natural gas and electricity. According to the Canada Energy Regulator, Canada consumed about 580 TWh of electricity and 1230 TWh of natural gas in all of 2022. Simple math tells us that means 2.1x as much natural gas as electricity. However, this does not provide the full picture. For one thing, we know energy demand varies seasonally. So, let’s look more closely at the monthly energy consumption.

    The breakdown by month in Figure 1 demonstrates much greater reliance on the gas system during the winter season, when the demand for space heating is higher. We see that during a month like January, the peak demand is more than 50% higher than that of the annual average monthly demand. Furthermore, the gap between the two systems has widened, with gas consumption growing from approximately 2.1 times to 2.5 times that of electric consumption.

    Figure 1

    FOCUSING ON DAILY PEAKS:

    The significant discrepancies between the annual and monthly numbers beg questions about what happens on a daily basis? To answer them, let’s use some of the data from the polar vortex cold weather event that occurred between January 11th – January 15th this year in western Canada. The following is a summary of the peak energy deliveries in the provinces of British Columbia, Alberta, and Saskatchewan over that time period.

    British Columbia:

    On Friday, January 12th, British Columbia was hit with extreme cold, with parts of the province reaching temperatures as low as -45°C. On the same day, BC Hydro advised that they delivered 11,300 MW of electricity, a record. On that same day, FortisBC also saw a record demand: 21,763 MW of natural gas – almost twice the electric demand.

    Alberta:

    In Alberta, temperatures also reached as low as -45°C. In response, the electricity consumption in the province peaked at 12,384 MW, a record according to the Alberta Electric System Operator. Throughout the weekend, ATCO Gas indicated that the natural gas system in Alberta delivered up to 110,340 MW of energy, nearly 10 times the amount that had been delivered by the electricity system.

    Saskatchewan:

    The weather event brought similar frigid temperatures to Saskatchewan, with parts of the province reaching lows of -44°C. The electric system in the province hit a peak of 3,810 MW on January 13th, just 100 MW short of the all-time high. The same weekend, the province also set a new daily gas use record of 1.70 PJ/day1 , which is roughly equal to 19,700 MW: over 5 times the electric demand of the next day.

    The graph shown in Figure 2 summarizes the peak energy demands as outlined above. Furthermore, the graph also includes the annual gas and seasonal peak gas demands in each province, converted to average delivery in MW, according to the Canada Energy Regulator and Statistics Canada.

    What jumps out from the data is how much more energy is delivered by the natural gas delivery system than by the electric system in these three provinces. At moments of peak energy demand – when Canadians needed energy the most – the gas systems in BC, Alberta and Saskatchewan were able to deliver as much as almost 10 times the energy that the electric systems delivered. Readers may recall Alberta was issuing alerts because of concerns that the electric system could not meet demand: no such alerts were issued about a gas system delivering over 9 times more energy.

    Figure 2

    So to answer the question “why is peak demand important?” we need only look at the graph in Figure 2. Across all three provinces, the peak demand was 20% higher than the average seasonal peak and more than 51% of the average annual demand. To put it simply, having a system capable of reliably meeting that demand is essential to preventing Canadians from freezing in the dark.

    As noted earlier, peak demand is the basis on which our energy systems are designed. Though they are not running at maximum capacity for most of the year, designing for peak conditions ensures that they remain stable and reliable for those critical hours or days of the year. And there is no energy system in Canada that does this better than our natural gas delivery system.


    1https://www.saskenergy.com/about-us/newsroom/saskenergy-sets-new-daily-natural-gas-usage-record-0

  • A Message from the President and CEO of CGA

    A Message from the President and CEO of CGA

    In the month of May, CGA hosted the world in Banff, Alberta, over four days of discussion on energy innovation – broadly defined – at the IGRC2024 conference. It was a very insightful symposium for the over 500 attendees from 30 countries who joined us. Each panelist, speaker, and delegate contributed to a wide-ranging discussion on how important the gas energy industry and gas energy innovation are to human flourishing. In this issue, we bring you a series of stories that underscore that importance.

    In our conversation with Alberta’s Minister of Environment and Protected Areas, Minister Rebecca Schultz, we delve into the importance of reducing emissions – but not gas energy use, noting that the two are not the same.

    Building on that provincial engagement, in our political commentators discussion, we ask our three contributors to address the question of how much influence federal policy should have on provincial energy decisions.

    In our spotlight interview we profile Executive Vice President and President, Gas Distribution and Storage at Enbridge Gas, Michele Harradence, about how she’s been leading Enbridge’s gas distribution and storage business, ensuring their four – a number growing to seven as we write this – million customers, have safe, reliable, affordable, and sustainable access to energy.

    In line with said access to energy, Graham Chandler writes on the significance of energy as a means to supply food and meet the UN’s Sustainable Development Goal regarding food security by 2030 in his piece, “Feeding a growing and hungry world.”

    Still thinking beyond our borders, we discuss how our American industry friends are dealing with the various challenges posed by natural gas bans and the rush to forced electrification.

    And looking forward to this year’s COP29 meeting, our interview with Professor of Practice at Azerbaijan’s ADA University Damjan Krnjević Mišković, gives our readers a glimpse into what we can expect on deck for that event in November in Azerbaijan.

    We hope you find the content informative and helpful!