John Lorinc is a Toronto-based journalist who covers sustainable building issues for The Globe and Mail and Corporate Knights.
When Justin Trudeau unveiled the federal government’s plan to offer $5,000 retrofit grants to homeowners in late May, he talked about how making dwellings greener and more energy-efficient would cut utility bills, reduce emissions and create jobs.
“This new grant is going to help you keep the heat inside in the winter and your money in your pocket all year long,” he said. It sounded like it would be a win all around.
But the Prime Minister made no mention of the complicated role of natural gas in home heating as a source of carbon emissions, nor did he invoke the politically fraught rhetoric of “fuel switching” – the notion of shifting away from fossil fuels such as natural gas and moving to renewables (including hydro, wind and solar) to provide energy for home heating.
While electric vehicles have recently garnered intense attention from investors, policy-makers and manufacturers for their potential role in the fight against global warming, there’s been no comparable groundswell of interest in alternatives to the domestic uses of natural gas. This is a big problem, given Canada’s goal of getting to net zero by 2050: There are 15 million residential buildings in Canada, and about half are heated with natural-gas furnaces, with the highest proportions in Ontario, Alberta, Saskatchewan and British Columbia, according to federal data. Fossil-fuel space and water heating in buildings generate 13 per cent of all national greenhouse-gas emissions.
In provinces with low-carbon electrical grids (B.C., Quebec, Ontario), homeowners who switch off natural gas to viable alternatives, such as electric air or ground-source heat pumps or tankless water heaters, will be helping to bring down the country’s fossil-fuel consumption. Fuel switching isn’t simply about improving energy efficiency – it’s about getting off gas, and it would be the equivalent of replacing a car powered by a combustion engine with one that runs on batteries.
Yet fuel switching isn’t yet an explicit goal of Canada’s climate-change agenda. That might not be a surprise, given that the natural gas industry is huge and influential, and operates an extensive network of pipelines that begin in Western Canada and connect to local distribution networks that send gas to virtually every municipal address in some regions and cities. Natural-gas giants have invested billions into this infrastructure, even as gas prices have fallen steadily due to increased U.S. production. Incentives to get homeowners to fuel-shift, then, represents an existential threat to the industry.
There’s a certain irony about the reluctance of policy-makers to promote such changes. After all, fuel switching in the 1970s and 1980s – via policies that encouraged millions of homeowners to abandon heating oil, coal and wood in favour of lower-emission natural-gas furnaces and boilers – resulted in a slight decline in house-related carbon emissions between the late 1990s and 2015, according to federal data.
Natural gas, in other words, was seen as a kind of energy white knight at the time, one that would allow homeowners and builders to feel good about installing high-efficiency gas furnaces and water heaters. In the coming decades, however, policy-makers will have to reckon with the continued residential use of natural gas if they hope to drive down emissions.
Some environmentally conscious homeowners have begun to invest in heat pumps or geothermal systems as alternatives to natural gas – and indeed, these devices, which are popular in Europe, do qualify for Ottawa’s green home-retrofit grants and loans.
But because heating with electricity is still more costly than heating with gas, a truly effective fuel-switching policy must include price mechanisms that level the playing field. Such a strategy would also mean that provincial energy officials will have to add renewable capacity to their electrical grids – or, in the case of provinces such as Alberta or Nova Scotia, phase out coal-fired generation.
It’s true that natural gas prices will rise through 2030 as Ottawa’s accelerated carbon pricing schedule clicks in. Enbridge estimates the increasing annual carbon costs for a typical house will amount to an additional outlay of $790 every year by 2030.
Yet the expected increase in price isn’t going to be sufficient to drive change. In a 2019 brief to the Ontario government, The Atmospheric Fund called for more assertive policy tools, such as targeted rebates for heat pumps in retrofits and new home construction, as well building-code changes.
Stepping back from these details, one point is clear: In transportation, the path to net-zero emissions pivots on drastic shifts in both vehicle technology and in how energy is distributed (i.e., gas stations). But if Canada truly wants to meet its Paris accord obligations, we also need to halt the emissions that come from the home-heating devices hidden in the corners of our basements.
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