Should Canada Introduce More Pipelines?

Mar 5 2019

Natural gas is nearly universally accepted as the bridge resource between emissions-heavy fossil fuels and the green-tech movement. It is the ideal commodity to do the job, especially in North America, where the introduction of new drilling techniques in the mid 2000’s allowed access to enough natural gas to power the continent for decades to come. The big benefit of natural gas over other fossil fuels, from an environmental perspective is that, when combusted, it produces far less CO2 than other fuel sources. The idea is that natural gas will help shift energy demand away from coal, and “fill in the gaps” of cleaner energy sources like wind and solar, which are currently unable to provide 24-hour energy.


As the cost of renewable and green technologies drop, and energy costs associated with these technologies continue to drop, a looming question emerges: Should we continue to invest in expanding the infrastructure for a “bridge energy source”?


This question is especially pertinent in Canada, where the lack of pipelines to take away the natural gas produced in Alberta has led to a bottoming out of natural gas prices. Prices peaked several times in the early and late 2000’s, before advanced drilling techniques created more supply than could be taken away by the existing infrastructure. Since then, prices have plummeted to record lows.


Introducing more pipelines to take away this commodity will allow for prices to rise, as the takeaway capabilities rise to match the supply levels. Other factors, like building liquid natural gas (LNG) plants on the costs of Canada could allow for natural gas producers to sell their product for more, as foreign markets crave the energy source. Both Asian and European markets offer opportunities for lucrative long-term gas purchasing contracts, bringing with them economic viability for decades to come. The argument has transformed into a debate over whether the economic benefits or environmental impact of natural gas are more important.


Since the case has been stated for the economic benefits of natural gas, let’s look at the environmental implications of further expanding natural gas infrastructure through new pipelines. There are several avenues that must be looked at when considering the impacts that new pipelines will have: short-term and long-term.


The short-term impacts include the potential of leaks, explosions (as we saw in November with Fortis BC) and intrusions on local ecosystems as more space is carved out for pipelines. Canada has some of the highest standards in the world for pipeline regulations. Current alternatives to pipelines include trucking the gas, and transporting it via rail, both options are less regulated and require fuel to transport.


The long-term impact of introducing new infrastructure is that these multi-million to multi-billion-dollar projects often have payback periods that stretch decades into the future. With a majority of environmental experts agreeing that humanity needs to become carbon neutral by mid-century, investing in the future of natural gas is opposing these observations. While natural gas is a cleaner burning energy source than most other fossil fuels, it is not carbon neutral.


Recent events involving pipeline explosions across North America, with the most notable Canadian incident involving the explosion of one of two FortisBC pipelines feeding the lower region of British Columbia have increased the tensions surrounding the subject of future pipelines. The recent pipeline failures have caused prices in some markets to skyrocket as supply becomes incredibly limited. Utility costs in both BC, as well as Ontario have increased as costs of maintaining and repairing pipelines jump. As utility costs soar and are expected to remain high for Q2 and Q3 of 2019, the door opens for independent natural gas marketers, like Canadian Energy Strategies, to source gas through non-traditional pipelines. The flexibility of independent marketers means that companies like ours are not tethered to one region or supplier to source natural gas. When Trans Canada Pipeline costs are too high, CESi can bring gas through the Vector pipeline to serve the Ontario and Quebec demand of our client base.


Canadian Energy Strategies benefits from lower transport costs and transfers those savings to our customers. For more information about how our active management has proven superior year after year, and how to take advantage of our natural gas sourcing program, please reach out to us at


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