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The National Energy Board (NEB) provides energy supply and demand projections in its annual Energy Future publication. The most recent report, Canada’s Energy Future 2013 - Energy Supply and Demand Projections to 2035 (Energy Future Report), was used as a reference source for natural gas consumption projections. 9

According to the report, approximately 5,700 PJ of natural gas will be consumed in Canada in 2030. This represents an increase in consumption of approximately 45% from 2012. Disaggregation of total natural gas consumption in Canada by sector, from 2014 to 2030, is shown in Figure 11.

Figure 11: Projection of Natural Gas Consumption by Sector in Canada, PJ, 2014-2030

In Figure 11, growth in natural gas consumption over the time period varies by sector. Of all sectors, growth in the transportation sector is expected to be the greatest, with an increase of approximately 18 times 2014 consumption values; however, note that the transportation sector still only makes up a small fraction (approximately 1%) of total consumption in 2030. Growth in the power generation sector is the next greatest at 104%, followed by the industrial sector at 32%. Growth in the residential and commercial sectors is expected to be 13% and 12%, respectively.

The primary drivers and assumptions behind the NEB’s projections are summarized below on a sectoral basis.

• Several factors support a greater role for natural gas power generation in Canada, including: low natural gas prices related to increased shale and tight gas production; lower GHG emissions compared to coal-fired power plants; and, shorter construction times (typically 18 months) in comparison with the alternative large centralized power generation options. Natural gas generation also benefits from lower upfront capital costs than coal fired or nuclear power plants and the ability for capacity to be built in smaller increments to better match load growth.

• The industrial demand projection is closely related to the economic growth projections, as well as projections of oil and gas production. Key trends that impact the natural gas demand projection include: a gradual recovery in energy-intensive manufacturing industries following the recent economic downturn; strong growth in the oil sands; and, growth in other natural resource industries such as mining.

• Increasing residential floorspace will lead to an increase in natural gas consumption. However, this will be counteracted to some extent by energy-use per square metre of floorspace declining. Energy use intensity will decrease due to improved building shell construction practices and increased penetration of high efficiency heating appliances.

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Page 19 - SD_NG_BC