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Table 5: Increase in Natural Gas Consumption by Sector in Canada, 2012 vs. 1995

Sector Relative Change in Consumption, 1995 to 2012

Power Generation  181% Industrial  30% Residential  0.3% Commercial  9% Other  41%

The primary drivers for increases (or decreases) in natural gas consumption are summarized below on a sectoral basis.

Power Generation

• The increase in natural gas consumption is primarily due to an increase in utilities generating electricity through natural gas combustion. Steam generation was relatively constant over the time period.

• Factors contributing to increased natural gas electricity generation include: lower gas prices; government policy and regulations, such as coal phase out regulations, which supported natural gas as a cleaner electricity generation alternative; and, increasing overall electricity demand.

Industrial

• The increase in natural gas consumption in the industrial sector is closely related to industrial GDP growth. From 1995 to 2012, industrial GDP in Canada grew by approximately 50%. 8

• Industrial electricity production through natural gas combustion increased by approximately 245% from 1995 to 2012. This was primarily driven by the expansion in the number of industrial CHP facilities.

Residential

• The increase in natural gas consumption in the residential sector was small (less than 1%). Increases in demand resulting from a growing housing stock were mostly offset by efficiency improvements in natural gas fired equipment, such as furnaces, boilers, and water heaters.

Commercial

• The increase in natural gas consumption in the commercial sector was primarily driven by an increase in commercial floorspace.

Other

• The decrease in natural gas consumption in this category was driven by energy efficiency improvements in pipeline systems. Transportation is included in the“Other”sector and is not broken out separately because historically this been a very small application for natural gas.