Tag Archives: climate change

Fraser report on the Green Energy Act misses the mark

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Yesterday, the Fraser Institute released a new report [.pdf], concluding that the Green Energy Act’s environmental goals could have been achieved in a more cost-effective fashion simply by improving the pollution control equipment on Ontario’s coal plants.

The report starts from an erroneous premise (one which the Government of Ontario has unfortunately repeated on occasion): that a key purpose of the Green Energy Act was to improve air quality by reducing conventional air pollutants from coal-fired generation. One problem with this is that the Green Energy Act was passed in 2009, years after the government had committed to phasing out coal and initiated other procurements – gas-fired generation, nuclear refurbishment, conservation, and renewables – to take up the slack. Given the several year lead time in bringing new projects online, any contribution to the coal phase-out from the Green Energy Act would be marginal at best.

No, the primary purpose of the Green Energy Act was to reduce greenhouse gas emissions and position Ontario as a leader in developing a low-carbon electricity system. Having more conservation and renewable generation in the system does not (at least at the moment) eliminate the need for some fossil-fueled generation, but it does reduce the amount of energy and greenhouse gas emissions that these units produce. By contrast, adding pollution control equipment to Ontario’s coal plants would have done nothing to reduce greenhouse gas emissions.

The Fraser Institute report then goes into some specific issues with one form of renewable energy: wind generation.

For example, it suggests that 80% of wind output is unneeded, because it is produced at times that Ontario exports power. This is a misunderstanding of how our electricity market operates. In many of these hours, there would be net exports whether or not wind was running, driven by higher power prices in other jurisdictions. In the much smaller number of hours when Ontario actually does have an electricity surplus, why is it always wind that has to take the blame? A glance at the mix of generation will show a large amount of nuclear, gas, and hydro running around the clock (most also with fixed price contracts), with wind almost never making up more than 10% of the total.

The report also suggests that we may need to turn off nuclear plants to accommodate renewables, which could lead to increased use of natural gas in subsequent hours as demand rises, due to the time lag in bringing nuclear units back on-line. This issue has already been dealt with by the Independent Electricity System Operator, by allowing nuclear operators to offer their non-flexible generation into the electricity market at a lower price than wind, ensuring that wind would be turned off first in the event of a surplus.

Let me be clear – wind alone cannot power our electricity system, and I don’t think anyone has ever said that it can. We need a mix of low-carbon options – energy supply, conservation and demand management, and storage – that can work together to meet our electricity needs.

Nevertheless, reducing the amount of carbon emissions produced by our electricity system was and is the right thing to do. The government shouldn’t be afraid to stand up and say so.

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Looking for a Well-Grounded, Long-Term Investment?

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Field picture
Well, I have one for you … it’s called soil, and it’s a blue-chip investment, if ever there was one.

Today I released my report on the Environmental Commissioner’s Soil-Carbon Roundtable, entitled “Investing in Soils for a Sustainable Future”, held last year in Guelph. (Click for more information, to watch presentations or to download the report.) It is an intriguing document because it contains a good measure of both hope and of frustration.

Hope arises from its revelation of broad areas of consensus among experts and stakeholders, confirming our common awareness of the vital importance of soil organic matter (SOM) — not only to our food supply, but to our water, our air, our climate, our biodiversity, and our economy. (see “The Roots of Sustainability: Engaging the Soil Carbon Solution” in my 2011 Annual Report.)

Frustration arises, however, from the report’s lack of consensus on how to ensure that SOM levels rise and then stay high.  We run the risk, too common in Ontario these days, of simply letting the status quo continue, while failing to take bold action.

Other jurisdictions have recognized the fundamental connections between sustainable agriculture and food security, soil health and a healthy environment, and soil-carbon levels and climate change. In 2011, Australia introduced the Carbon Farming Initiative, which caps carbon emissions by industry, exempts agriculture from the caps, and then allows farmers to sell the carbon credits they acquire when they adopt management measures that sequester carbon, including those that build SOM.

Here in Canada, Alberta has an intensity-based cap on carbon emissions for its largest businesses – a cap that is reduced each year, therefore requiring constant improvement. One of the compliance options for these businesses is to invest in carbon offsets, which include no-till agriculture, a management practice that raises SOM levels in the dry prairie soils.

Ontario has its own unique soils, climate, and ecology, so we need our own made-in-Ontario soil-carbon policies and protocols. We must get past the arguments about what management practices and incentive systems work best and just get going on this vitally important investment strategy. We must quickly create (or adapt other jurisdictions’) measurement and  incentive tools, protocols, and programs, so that we can measure and monitor our progress. There are many innovative examples upon which to draw, so let’s get started.

Our farmers feed us, but they also have the ability to help us prepare for the future. Their work can mitigate climate change, build ecological resilience, sustain our natural environment, protect our water supplies, guard our biodiversity, and generally enhance our quality of life. However, to do all this they need our help. Like any investment, change always involves some level of cost and of risk. Since we will all benefit from these investments in soil, the costs and the risks should be shared, not borne by farmers alone.

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Introducing Biodiversity Ontario – A Collection of the ECO’s Work on Biodiversity

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Photo credit: MNRFor over a decade, the ECO has been highlighting the importance of conserving Ontario’s biodiversity. Biodiversity – or the variety of life on earth – not only has great intrinsic value, but also plays a critical role in the functioning of our ecosystems and our resilience to environmental change. The threats facing biodiversity on a global scale are the very same issues we are grappling with in Ontario.

front page screen shotToday I am pleased to announce that all of the ECO’s work on biodiversity is now available in one, comprehensive collection on a new website – Biodiversity Ontario. The site features articles from the ECO’s reports over the past twelve years, on topics such as invasive species, wildlife, endangered species, climate change, protected areas, natural heritage, and the role of government. You can also read ECO special reports on biodiversity: The Last Line of Defence: A Review of Ontario’s New Protections for Species at Risk, containing my review of the Endangered Species Act, 2007; and Biodiversity: A Nation’s Commitment, an Obligation for Ontario, released in 2012 to urge the government to come up with a new strategy to stem the continuing decline in Ontario’s species and natural spaces.

The ECO’s work has played a key role in framing the conversation on biodiversity in Ontario, and has been instrumental in crafting the solutions now being implemented for its conservation. For example, for many years I have been calling on the provincial government to create a strategic plan of action to preserve and protect Ontario’s biodiversity. In December 2012, the Ontario government responded to this call to action, and released its Plan to Conserve Biodiversity, which sets out the government’s commitments to actions to protect biodiversity.

I hope the site will be a valuable resource for Ontarians to learn about the province’s vast biological diversity, as well as the challenges faced in protecting it. I also hope that the site will encourage a dialogue about the role of government and the public in the conservation of biodiversity. The site will continue to grow as the ECO tracks ongoing issues, emerging trends, and government decisions that impact biological diversity.

I invite you to explore the new Biodiversity Ontario site, and look forward to hearing your feedback.

 

* Photo credit: MNR

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Tracking GHG Emissions from Electricity Generation: We Need an App for That

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Purchasing a large household appliance, like an oven, fridge, or freezer?  I bet you take your time to compare different features of similar products, including their energy efficiencies.  After all, a refrigerator will consume thousands of kilowatts of electricity over its lifetime, and cost you hundreds of dollars. You know that better efficiency means you have a greener appliance that saves you money.

Photo courtesy wikimedia commonsPurchasing electricity?  (I know you are because you’re reading this blog!)  It’s sort of similar to purchasing an appliance.  Every time you turn on a light or computer, you’re making a purchase that can result in unintended consequences – like releasing greenhouse gases (GHGs), a major driver of climate change. At the individual level, there won’t be a significant amount of GHGs released from turning on a light.  But, everyone’s purchases taken together, combined with the electricity used by companies or institutions, can result in large amounts of GHGs being released. This is especially true during peak demand periods, when more fossil fuel-fired generating stations (like gas-fired ‘peaker plants’) are in the mix.

What’s an enlightened, environmentally conscious consumer to do?

CDM11v1One useful tool is an emission factor: the amount of GHGs released per unit of energy produced by suppliers (and ultimately consumed by users.) The Independent Electricity System Operator (IESO) could make the estimated GHG emission factors for Ontario’s electricity consumption publicly available on an hourly basis. In my Annual Energy Conservation Progress Report – 2011 (Volume One), I recommended that they do just that. This was motivated by my desire for electricity consumers to have information that could help them make environmentally conscious decisions about when they consume electricity.

Right now, such information is available from sources like Environment Canada’s Electricity Intensity Tables, which provide an annual greenhouse gas intensity factor for each province’s electricity system. Unfortunately, this annual greenhouse gas intensity factor doesn’t reflect the hourly variation of our electricity system.  Plus, publication of the annual greenhouse gas intensity factor is delayed by a couple of years.

Clearly, an annual emission factor does not accurately reflect the carbon intensity of our electricity system during any given hour of the day. This is inadequate for anyone who would like to reduce their carbon footprint by shifting their electricity consumption.

Why would you be interested in shifting your electricity use? Because Ontario’s sources of electricity supply – and the consequent production of GHGs – vary throughout the day. It is a dynamic system where generators are turned on and off to meet our varying energy needs – and generators rely on different fuel sources and technologies. As energy demand changes hourly, weekly and seasonally, the amount of GHGs emitted to the atmosphere by electricity generators also fluctuates.

I’m not the only person who sees this problem. Last year, my staff met with researchers at Niagara College who published an interesting peer-reviewed approach for calculating hourly emission factors. Other researchers have been exploring similar issues, such as looking at the emission intensity factors for marginal electricity generation.

There’s also momentum from the private sector behind this idea, including the creation of an app to help people see what their hydro bills are paying for.  The Gridwatch (Ontario Edition) app was launched last year for iphone users, and is free to download. It provides users with an easy-to-read interface that shows you how much power is being generated, from what electricity source, and it even calculates its own estimate for Ontario’s hourly GHG emissions from electricity generators.  This helps consumers learn more about their electricity use and the associated GHG emissions.

Wouldn’t it be useful to have an official method that is endorsed by government and industry to calculate hourly GHG emission factors for Ontario’s electricity consumption? I think so. I believe that an official source for real-time GHG emission factors could help industries calculate their emission reductions from load shifting, could help academics studying GHG emissions from our electricity system, and help you, the public, make decisions on when and how to use electricity with the least impact. The generation data is already being collected and it would improve the public’s understanding of our electricity grid and how our electricity use is related to reducing our GHG emissions.  Let’s get an official source of hourly GHG emission data for our electricity system available!

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Climate Alarm Now Being Raised by All Sectors

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For more than two decades, concerns about a changing climate have been raised primarily by those organizations and institutions whose very job it is to monitor environmental issues. The United Nations Environmental Programme (UNEP), for example, has long been focused on the implications of a warming climate. As a result of this concern UNEP, in conjunction with the World Meteorological Organization, established the Intergovernmental Panel on Climate Change in 1988 – a body whose sole raison d’être is to analyze and assess the underlying science, and report its findings to the world audience. And, James Hansen, head of NASA’s Goddard Institute for Space Studies, has also been voicing this concern since 1988 (most recently in this article from the Proceedings of the National Academy of Sciences).

As the risks of climate change become more apparent and the upward trajectory in GHG emissions suggests much worse to come, other organizations that are generally not perceived as having environmental mandates are recognizing this changing reality and are voicing their growing concern about the potential consequences.

From international organizations such as the World Bank – an institution that has historically focused on global poverty reduction – we are now hearing calls to “turn down the heat” (.pdf) or risk rolling back decades of sustainable development work. The International Energy Agency – a body that was established in the 1970s to help countries respond to major disruptions in oil supplies by releasing emergency oil stocks to the markets – recently released a statement (.pdf) cautioning that “no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal, unless carbon capture and storage (CCS) is widely deployed.”

In other words, an organization that was once focused on facilitating oil consumption is now warning that we must do precisely the opposite.


The Organization for Economic Co-operation and Development, whose mission is to promote policies that improve the economic and social well-being of people around the word, warns that “without new policies, by 2050, more disruptive climate change is likely to be locked in, with global greenhouse gas (GHG) emissions projected to increase by 50% …”.

From the insurance industry – one that has a vested interest in limiting risk – a resounding chorus of concern is being voiced. Recognizing the major weather-related changes that are predicted and the corresponding significant insured losses, the global insurance industry founded ClimateWise, an international collaborative of insurance companies focused on reducing the climate change risks faced by economies and societies. Closer to home, it has been reported that one of the largest companies in the Canadian insurance business recognizes climate change as one of the priority risk areas for home insurance due to the increased cost of severe weather events.

Major accounting firms also are questioning the feasibility of meeting the 2°C goal. PricewaterhouseCoopers, for example, is now projecting that without unprecedented and sustained reductions in GHG emissions for the next four decades, the global community may now be on track for 4 – 6°C of warming by the end of the century. Accordingly, major accounting firms have developed advisory services that address the business risks and opportunities (.pdf) presented by a changing climate.

Yet more evidence of widening concern about climate change comes from America’s military and intelligence agencies who project unparalleled strains in coming years as climate-driven crises exacerbate instability and conflict around the globe. The U.S. Defense Department is taking steps to increase the energy efficiency of its ships, aircraft and vehicles to reduce reliance on fossil fuels, and the National Intelligence Council has expressed concerns about the risks of climate change to U.S. national security.

The growing number of reputable organizations that are voicing concern may be contributing to a shift in the media coverage of climate change. Mainstream media in North America has typically given far more column space to the voices of climate sceptics than the press in other countries. But, the sudden realization – and reporting – that we are now experiencing “the new normal – living climate change in real time” suggests that the U.S. media – and society – are starting to “get it”.

So, what does all this boil down to? For me, it represents a clear acknowledgement that climate change is now perceived as a significant threat not only by scientists, but also by a wide spectrum of institutions that are not typically seen as carrying environmental mandates. Collectively, the call for more ambition and urgency on the climate policy issue is growing across a wide range of sectors. It’s about time!

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Ontario Government Retreats on Climate Change

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Dec 4, 2012 – Ontario’s Environmental Commissioner, Gord Miller, says the Ontario government is backing away from its plan to reduce emissions of greenhouse gases (GHG).

Gord Miller today released “A Question of Commitment,” the 2012 edition of his annual review of the government’s Climate Change Action Plan. The 2007 plan established province-wide targets for reducing GHG emissions as well as programs for reducing emissions in six sectors: electricity, transportation, industry, buildings, agriculture and waste.

“At a time when President Obama is focusing on climate change as part of his second term agenda,” says Miller, “the Ontario government is ending or scaling back programs to fight GHG emissions and will fall far short of meeting its 2020 and 2050 targets.”

The Commissioner pointed to a number of recent government decisions:

  • The Green Commercial Vehicle Program – The government committed to spend $13.9 million to reduce GHG emissions from commercial fleets.  Despite the program having achieved reductions that were 350% higher than planned, the program was cancelled early.
  • Electric Vehicle (EV) Programs – A total of $164 million was promised for incentives for the purchase of EVs, and for the development of charging stations. The government has cut $101 million from the two programs, and is reevaluating them because of the slower than anticipated take-up, and the “slowing economy and shrinking revenues.”
  • High Occupancy Vehicle (HOV) Lanes – The 2012 provincial budget delayed the construction of 31 kilometers of HOV lanes until “fiscal capacity allows them to proceed.”
  • Cap and Trade – The government has still not announced when it is going to enter the emissions trading program sponsored by the Western Climate Initiative (WCI).

 

Miller observed that delays now will cripple efforts later to fight climate change. The International Energy Agency has reported that, even under the most optimistic scenario, 80% of the total emissions are already “locked-in” from infrastructure that is already in place, or under construction.

“With each passing year,” says the Environmental Commissioner, “it becomes clearer that without new policies and a drastic change in the current upward trajectory of GHG emissions, our planet is headed for a frightening future.”

Gord Miller warns the government is only halfway to meeting its 2020 target. “That’s only eight short years away, and the government has no additional measures to close the gap. Of special concern is the transportation sector, which overall is the largest source of the province’s GHG emissions.”

The Environmental Commissioner acknowledges the phase-out of coal-fired generation has helped the government reach 90% of its 2014 target. “But the associated increase in Ontario’s natural gas generating capacity is going to make it difficult for the government to meet its 2020 and 2050 targets for emissions reduction. Natural gas has now surpassed coal as the largest source of GHG emissions in the province’s electricity sector.”

 

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Download the Environmental Commissioner’s 2012 Greenhouse Gas Progress Report, A Question of Commitment at http://www.eco.on.ca.

For more information, contact:

Hayley Easto

Communications and Outreach Coordinator

Environmental Commissioner of Ontario

416-325-3371 / 416-819-1673

1-800-701-6454

hayley.easto@eco.on.ca

 

Aussi disponible en français 

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Why Ontario Needs to ‘Doha’ the Right Thing on Climate Change

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It is an interesting and perhaps fortuitous coincidence that the United Nations Framework Convention on Climate Change (UNFCCC) meeting in Doha, Qatar has begun just a few short weeks after California took a historic step in its transition to a low-carbon economy. In mid-November, California held its first quarterly auction of permits under the cap-and-trade program that is a central piece of the state’s climate change policy framework.

In the first compliance period that runs from January 1, 2013 to December 31, 2014, electrical generation and industrial facilities that emit more than 25,000 tonnes of greenhouse gases (GHGs) per year are required to either cut their emissions or acquire pollution permits (a.k.a. allowances) for each tonne of GHG emitted.

While the large majority of permits (approximately 90%) will be given away for free to industry and electricity generation facilities in the first compliance period, the remainder will be distributed via quarterly auctions over the next two years. All 23.1 million permits made available in the November auction by the California Air Resources Board (CARB) to cover 2013 and 2014 emissions were sold for $10.09 each, and an additional 5.6 million advance permits were sold at $10 each for the second compliance period which starts in 2015. The $288 million raised in the auction will be earmarked for residential electricity rate payers to offset higher rates that are expected as a result of the program. Other portions of the cap-and-trade revenue will go to the state’s Air Pollution Control fund to support energy efficiency and other low-carbon infrastructure projects.

In partnership with California, Quebec has also pledged to move forward with a cap-and-trade program in 2013 and has earmarked over $1 billion in carbon market revenue over the next five years to help fund a range of low-carbon infrastructure such as mass transit, green buildings and electric vehicles under its Climate Change Action Plan.

Ontario was supposed to work alongside California and Quebec in implementing a cap-and-trade program through the Western Climate Initiative, thus creating a linked market for GHG emissions amongst a group of Canadian provinces and U.S. states. But while California has forged ahead, re-confirming its position as a global leader in environmental policy, the design and implementation of Ontario’s cap-and-trade program has ground to a halt. While some may note that British Columbia, another WCI partner, has also stalled development of its cap-and-trade program, that province has taken a leadership role by implementing a carbon tax that is showing early signs of having an impact on GHG reductions from automobiles.

I have long maintained that carbon pricing, whether in the form of a carbon tax or a well-designed cap-and-trade program, is a fundamental pre-requisite to efficient and effective GHG policy. As both the California and Quebec examples illustrate, Ontario is leaving billions of dollars on the table that could be leveraged to support emissions reduction – and adaptation – opportunities across the province. With the international conversation at Doha focusing on issues such as climate change finance and low-carbon technology deployment, it is unfortunate that Ontario is failing to demonstrate leadership and policy innovation on this file.

I’ll be talking more about climate change in my 2012 Climate Change Progress Report, coming out next week on Tuesday, Dec 4th.

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Climate Change report to come on Dec 4th

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Media Advisory

Environmental Commissioner of Ontario to release report on Ontario’s progress in reducing greenhouse gas emissions

The Environmental Commissioner of Ontario will release the 2012 edition of his annual review of the government’s Climate Change Action Plan at a media conference on Dec 4th, 2012 at 10:00 a.m.

The conference will also be available via webcast. To watch the live broadcast of the media conference, please visit http://www.eco.on.ca/. Please note the Commissioner will not be taking questions via webcast, but will be available for individual interviews after the news conference.

WHEN: Tuesday, December 4th, 2012 at 10:00 a.m.

WHERE: Room 149, Queen’s Park Media Studio, Legislative Assembly of Ontario
Legislative Building, Queen’s Park, Toronto, Ontario

For more information or to schedule interviews, contact:

Hayley Easto, Communications & Outreach Coordinator,
416-325-3371 or hayley.easto@eco.on.ca.

For French language release and bilingual support, contact:

Jean-Marc Filion, 705-476-9665.

 

  • Media not currently accredited by the Legislative Assembly (Queen’s Park) Media Gallery must register with the Press Gallery if they wish to participate in the conference. To register, contact Gerald Christopher, Press Gallery Coordinator – Room 387A or 416-325-7922 or gerald_christopher@ontla.ola.org.
  • The full Report will be available in print and PDF formats at 10:00 a.m. on December 4th, 2012. To download the report, visit http://www.eco.on.ca.

 

Aussi disponible en français.

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Raising the Bar on Renewables in Ontario

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With the long-awaited re-launch of the Feed-in Tariff Program [.pdf], the renewable energy industry in Ontario has been recharged.  With the new rules established, Ontario can get on with the business of building new wind, solar and biomass projects to meet the government target of procuring 10,700 MW of non-hydro renewable electricity generating capacity [.pdf].  This is good news for those concerned about the growing impacts of global warming because all of this new capacity will help facilitate the phase-out of coal-fired electricity from the provincial supply mix by the end of 2014, moving us further along the path towards the GHG reduction targets set out in Ontario’s Climate Change Action Plan.

Solar panels and wind turbine producing renewable energy

The key question on many people’s minds is: what happens after?  Will Ontario stop building additional non-hydro renewable electricity capacity and be content with these sources supplying only 13 per cent of electricity generation in 2030 as projected in the Long-term Energy Plan [.pdf], or will Ontario continue to move aggressively forward into a renewable energy future? If the government chooses the latter path, it won’t be embarking alone. Germany, which decided last year to entirely phase out it’s nuclear generating capacity, is forecasting a greater than 60 per cent share for non-hydro renewables by 2030 and Denmark intends to supply 100 per cent of its entire energy supply (electricity, heating, industry and transport) by renewable sources by 2050. While Ontario has yet to set such lofty goals, there may be a window of opportunity open next year when the government reviews whether a higher target for renewable electricity supply is warranted.

The good news is that an electricity system powered predominantly by renewable energy technologies that are commercially available today is technically possible given a more flexible, or “smart” electricity grid. This is the central finding of the Renewable Electricity Futures Study, which was recently released by the National Renewable Energy Laboratory.  The study looked at the extent to which renewable energy supply can meet the electricity demands of the continental United States over the next several decades. It found that renewable electricity generation is more than adequate to supply 80 per cent of total U.S. electricity generation in 2050 provided that the flexibility of the electricity system is enhanced with grid storage, demand response, new transmission infrastructure and flexible conventional generation.

While perhaps not directly comparable to the continental U.S., Ontario is arguably better positioned to embark on an aggressive drive for renewable energy because hydroelectric power already provides around 20 per cent of electricity supply compared to only around 7 per cent in the U.S.  The province has also begun the important work of implementing the smart grid by installing technologies such as smart meters which facilitate demand response (through time-of-use rates) and exploring the potential of energy storage technologies, both of which are fundamental prerequisites to integrating larger shares of renewable energy technologies into the grid.  Furthermore, there is major work underway by Hydro One to update the province’s electricity transmission system to handle new generation.  To the ECO it seems that the building blocks for a more aggressive renewable electricity future are in place. Will the government raise the bar to make it happen?

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Renewable Natural Gas: Worth the Price?

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Should Ontario meet some of its energy needs from renewable sources, if it would reduce our greenhouse gas emissions, but might cost more than the current price we pay for energy? That debate has been raging in the electricity world in recent years, and now it’s coming to the natural gas sector. Last week, the Ontario Energy Board was asked to rule on an application from Ontario’s gas utilities (Union Gas and Enbridge) for a pilot program that would allow them to pay a premium price for renewable natural gas and pass this cost on to customers (the amount of renewable natural gas would initially be capped, to keep the average cost impact for residential customers to less than $1.50/month). While there are some differences, the program the gas utilities proposed bore many similarities to the Feed-in Tariff program in the electricity sector.

Renewable natural gas is essentially methane which can be produced from organic matter. The most likely near-term supplies in Ontario are landfills, agricultural residues and manures, and wastewater operations. Captured gas can be cleaned up and fed into the gas pipeline networks, where it mixes with traditional natural gas and is delivered to customers. The City of Hamilton has already worked with Union Gas to inject renewable natural gas from its wastewater treatment plant into the gas distribution system.

WWTP

 

 

 

 

 

 

 

 

 

 

 

 

 

In some cases, renewable natural gas can provide a double benefit in reducing greenhouse gas (GHG) emissions. First, the carbon dioxide emitted during combustion equals the amount that was removed from the atmosphere by the bioenergy source during its lifetime. Second, the collection of the source material can prevent methane, a much more potent greenhouse gas than carbon dioxide, from escaping into the atmosphere. However, not all sources of “renewable natural gas” are created equal – I have previously noted that landfill management practices designed to capture methane for energy production may actually increase fugitive methane emissions, more than offsetting any potential reduction in greenhouse gas emissions.

Last week, the Board ruled that it does not have enough evidence to make a final decision on Enbridge and Union’s application, and needs more details from the utilities. However, the Board did drop a few hints on its policy views. It concluded that reducing greenhouse gas emissions does have a value that should be recognized, and signaled openness to balancing environmental benefits with economic prudence:

The Board finds that a gas supply portfolio which includes an amount at a premium price but which has significant environmental benefits may simultaneously achieve the Board’s objectives related to consumer protection and energy conservation and efficiency. Programs which reduce GHG emissions and enhance energy efficiency are arguably aligned with the established policies of the Ontario government. The interests of consumers are protected, and their economic circumstances are taken into account, by ensuring that the cost impact is reasonable and in keeping with the environmental benefits achieved.

This is an important and welcome conclusion. Part of the Board’s conundrum on reaching a definitive conclusion on the merits of the application relates to the challenge of weighing the costs and benefits of renewable natural gas. In particular, the Board noted that there is no market price on carbon in Ontario.  I have argued that such a policy is needed. Similarly, the Board considered arguments that the benefits of the application could be given greater weight if linked to specific objectives of the Board’s mandate, and the government has not given the Board an objective to promote the generation of natural gas from renewable energy sources, like it has with electricity.

I have been critical of Board decisions that placed too much emphasis on rate impacts and near term costs, and for not taking into account the environmental impacts associated with energy consumption.  Accordingly, I have recommended that the Minister of Energy amend the Ontario Energy Board Act so that the Board’s objectives include having regard to the environmental costs associated with energy consumption.

We’ll have to wait and see if Enbridge and Union make another attempt. They have until October 31 of this year to submit a revised application. Given that the GHG emissions in Ontario in 2009 from the direct use of natural gas were more than double the emissions from the electricity sector, Enbridge and Union should be commended for starting the discussion of how to reduce the emissions from our natural gas system.

 

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