Demand for Natural Gas on the Rise as Ontario Expands Access

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Natural gas is becoming the fuel of choice for many Ontario businesses looking for energy optimization strategies. Natural gas is the most common heating source in Ontario and is more affordable than other sources, such as electricity, oil or propane.

Demand for natural gas in Canada is driven primarily by industrial users. The Canadian Association of Petroleum Producer (CAPP) estimates that Canadians consumed 9.1 billion cubic feet per day (Bcf/d) of natural gas in 2017. Demand for natural gas varies due to weather, economic growth, market conditions such as prices, regulatory changes, and infrastructure constraints. Currently, the supply of natural gas exceeds domestic demand, creating the opportunity for exports (currently only to the United States) and Canadian jobs.

Natural gas accounts for about 68% of the energy used in the industrial sector both as a heat source – for example, in making steel – and as a feedstock in the petrochemical industry, according to CAPP.

Expanding Access to Natural Gas:

Chatham-Kent is the first Ontario community to be named a recipient under Ontario natural gas expansion program, which is targeted to begin in the summer of 2019. The program, which will be facilitated by the Independent Electricity System Operator, is designed to extend Ontario natural gas access to additional parts of rural and Northern Ontario, including First Nations communities. The changes could enable new natural gas connections in more than 70 communities across the province and could expand natural gas to an estimated 200 businesses, the province said in a recent news release. The municipality estimates the additional natural gas capacity could bring an estimated 1,400 jobs in the greenhouse industry alone.

Natural gas is seen as an affordable commodity for businesses. Approximately 130,000 businesses across Ontario currently rely on natural gas, and demand for the fuel is high.

Under the expansion program, communities partner with private gas distributors to bring forward natural gas expansion applications to the Ontario Energy Board.

Legislation to approve the program was passed in late 2018.

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