Enbridge Gas is starting construction of its $358-million natural gas pipeline in southwestern Ontario, which critics say “doesn’t even make economic sense” given the need to transition away from fossil fuels.
Premier Doug Ford announced details of the Panhandle Regional Expansion Project on Friday in Leamington, highlighting its potential to “create good-paying jobs, support our world-leading greenhouse sector and power Ontario’s economic growth for many years to come.”
Over the past decade, the value of greenhouse-grown products has doubled in value, according to a report by RBC, and two-thirds of the country’s greenhouses are in southern Ontario. RBC reported that energy limitations are a bottleneck for the industry.
But advocates criticized the investment in the new gas pipeline, arguing that it contradicts climate goals and is economically unsound.
“This is a bad investment,” said Keith Brooks, programs director at Environmental Defence.
“The science is clear. In a world that limits climate change to 1.5 degrees, there is no room for new fossil fuel infrastructure like a gas pipeline that costs over a third of a billion dollars. This project doesn't even make economic sense.”
Brooks noted the project relies on a 40-year revenue model, which he believes is unrealistic given the current energy transition. He pointed out that it is being subsidized by $150 million from existing gas users.
“It will likely cost all of Ontario's gas customers even more when it winds up a stranded asset and doesn't generate the revenue that Enbridge is banking on.”
Brooks says Ontario needs to advance its pursuit of clean energy and energy efficiency options. At the United Nation’s annual COP climate talks in 2023, countries including Canada agreed to triple renewable energy generation by 2030. Brooks believes Ontario should adopt this goal and act on it, rather than investing in fossil fuel infrastructure.
The Ontario Energy Board (OEB) granted Enbridge Gas approval in May to build the project, concluding that the natural gas pipeline project serves the public interest — specifically noting greenhouses’ growing needs in its approval. It expects a quarter of the new demand will come from greenhouses, according to the board’s decision document. Greenhouses use natural gas for space heating, electricity generation and carbon-dioxide production (to encourage plant growth).
But, Brooks suggested they might consider large-scale heat pumps or district heating, and noted the greenhouse industry should explore alternatives to fossil heating. But in submissions to the OEB, Environmental Defence admitted it was not aware of any commercial greenhouse operations in Ontario using electric heat pumps.
According to Enbridge, the project involves constructing approximately 19 kilometres of 36-inch diameter pipeline parallel to the existing 20-inch Panhandle Pipeline. The new pipeline will be located adjacent to the existing corridor between Richardson Side Road in Lakeshore and the Dover Transmission Station in Chatham-Kent.
Earlier this year, Ford's government introduced the Keeping Energy Costs Down Act, which overrides Ontario’s independent energy regulator, the OEB.
The legislation allows the provincial government to reverse OEB decisions that block Enbridge's funding for gas expansions through increased customer rates. This move diminishes the regulator's independence by giving the government control over such decisions.
In 2019, an Independent Electricity System Operator report, funded in part by Enbridge, predicted a tripling in electricity demand by this year in the greenhouse sector — driven in large part by what it expected would be a more than 1250 per cent growth in electricity demand from the cannabis sector.
The project is set to go into service on November 1, 2024, with additional construction extending into 2025.
The Independent Electricity System Operator’s Pathways to Decarbonization Report predicts that Ontario might need to spend $400 billion to more than double its electricity generation capacity — from 42,000 megawatts (MW) today to 88,000 MW by 2050.
With files from John Woodside
Comments
No one ever accused Doug Ford's Conservative government of caring even the least bit about the environment or having even a lick of (sorry Poilievre) "common sense".
If Doug "The Thug" Ford has his fingers in the till somewhere, you can bet climate change and the environment are not of any concern. That is a conservative government for you, no climate change polices and total disregard for the environment. And the younger generation bitching about climate change and doing something about it, but lined up at the foot of Pierre :Snake oil Salesman" Poilievre for the next election, go figure. The I want my cake and eat it too generation.
"He pointed out that it is being subsidized by $150 million from existing gas users."
That's part of my concerns addressed, and that can be fixed by displeased end-users cancelling their gas usage, where possible.
My larger concern is ensuring that there is no assurance in the contract of any other public money covering future liabilities if/when all gas customers depart and Enbridge is left with a white elephant.
???
I'm sure governments and citizens support local food production (not sure these greenhouses are selling in Canada or exporting), however there are better ways to heat and provide C02 to greenhouses. While I'm typically not a fan of biogas (so called Renewable Natural Gas), this is one application that may makes sense. BTY, district energy and heat pumps are being used for Greenhouses, I believe Turkey is leading the world in this area. McMaster University is also using heat pumps for their campus greenhouse! As for the money to fund this project, I suspect the majority of these assets will be "written off" sometime in the next decade or so - A bill payed for by the unsuspecting residents of Ontario. Thanks Doug!