A gold mine of energy opportunities

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Brace yourself. According to The Wall Street Journal, there’s a pretty good chance of another big hike in U.S. natural gas prices. And if it happens in the United States, it’ll happen here, thanks to the interlocking of markets under the North American Free Trade Agreement.

The newspaper says that once summer air conditioners get going, electricity consumption will zoom upward, as it always does, and so will natural gas use, because so much electricity in the United States is generated from natural gas.

What’s different this year is that there’s a shortage of natural gas. Inventories are down 37 per cent from last year, and 36 per cent from the average of the past six years. In addition, demand for natural gas is expected to jump by 5 per cent.

 

Drilling for gas has increased one-and-a-half times over last year, the newspaper says, but whether enough can be found to keep prices stable seems unlikely.

« I think we could see natural gas prices rising sharply in the summer months, the newspaper quotes Ronald Barone as saying. « I’d be shocked if we don’t.’’ Barone is an analyst at UBS Warburg.

At the same time, in Ontario, we have Environment Minister Elizabeth Witmer announcing — belatedly — that in the name of fighting Toronto’s deadly smog, she has given the Lakeview electricity generating plant four years to switch from coal to natural gas.

It’s a necessary move, but it ought to be seen as strictly an interim measure. It offers only mild protection to the environment, and does nothing to address the instability of gas markets. The only long-term solution is to develop energy efficiency. However, Queen’s Park acts as if it has never heard the phrase.

In the city, however, a different attitude prevails. It has established a sustainability round table that is proving to be vitally interested in cutting energy use. It’s preparing recommendations for City Council, based in part on a report entitled « A Sustainable Energy Plan for Toronto.’’

The report says Torontonians spend $3 billion a year on energy, and 60 per cent of that is spent on electricity. Most of the money leaves the city, it says. Why not promote energy efficiency to reduce costs and to stimulate the local economy, it asks?

It estimates that Torontonians could reduce energy consumption by 75 per cent over 25 years through retrofitting buildings to conserve energy, and by making new buildings energy efficient.

And since 24 per cent of Ontario’s electricity comes from Niagara Falls and other hydro generating stations, if electricity use were cut by 75 per cent, we could almost get by on hydro power alone. So, why not set that as a goal?

Any success at all would make electricity cheaper, because there’d be no need to construct new thermal generating plants.

In addition, the environmental benefits would be tremendous. Even natural gas is dirty. It burns more cleanly than coal or oil, but upstream there is serious pollution — in exploration, drilling and processing, and in leaks throughout the delivery system. Leaks are a serious problem because natural gas is purified methane, which is 21 times more potent as a greenhouse gas than the carbon dioxide emitted when the gas is burned.

And finally, developing energy efficiency would bring a whacking big boost to the economy. Alberta’s Pembina Institute for Appropriate Development estimates that for every $1 million invested in energy efficiency, 36.3 jobs are created. That compares, it says, to 7.3 jobs created through investment in conventional energy, and 12.2 jobs through investment in renewable energy.

The energy plan report to the city says that 30,000 person-years of employment could be created through energy efficiency measures no greater than what would be needed to meet the city’s target of reducing greenhouse gases to 1990 levels by 2005.

In short, energy efficiency presents a gold mine of opportunities, and if the Ontario Government isn’t going to seriously promote it, then Queen’s Park should get out of the way, and cede to the city more power and resources for the job.

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