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32 Downstream Natural Gas Copyright © 2014 by SDTC ™

7.2.5 Power Generation

• A full quantification of life-cycle costs for various power generation options and education of regulators and politicians:

- - This need is for a better understanding of how the environmental impacts of various power generation options compare to each other. Much of this information exists and there is also an education component of this need to ensure that stakeholders and decision makers understand the analysis results.

• Marketplace education around Canada’s production potential and it’s likely effects on the market:

- - Lack of education is seen as a key barrier to greater use of NG. This need is linked to the need above.

• Public energy literacy:

- - Education incorporating upstream and downstream considerations is expected to help the social license to use natural gas.

• Regulations for LNG transportation need to allow movement of LNG from liquefaction site to the communities:

- - There are currently gaps in existing regulation.

• Government subsidies for diesel in remote communities will need to include natural gas:

- - Existing subsidies can give diesel a market advantage, discouraging the adoption of natural gas.

• Regulatory framework for CCS:

- - There are significant regulatory requirements for the implementation of broader scale CCS.

7.2.6 Transportation

• Clear policy on the taxation of NG as vehicle fuel and timelines for policy changes:

- - Fuel taxation has the potential to be a very significant barrier to NG vehicle adoption, since these vehicles and related technologies are in the very early stages of market adoption. Excise taxes would negatively affect the expected rate of return for vehicle purchasers/operators. Clarity is required on when and if a taxation regime is expected to be introduced.

• Regulations / certifications for existing stock conversion:

- - The long process for approving conversion technologies is expected to result in few being available on the market and conversion playing only a small part in the adoption of NG as a transportation fuel.

• Harmonization of CNG operating pressures:

- - Lack of harmonization will impact standardization across fleets and fuelling infrastructure.

7.2.7 Renewable Natural Gas (RNG)

The two non-technical needs identified in this sub-sector are linked. It is not expected that RNG will be cost-competitive with NG in the short to medium term, so in order to incentivise the use of RNG, there will need to be regulations, incentives, or some other way of paying the ‘cost premium’.

• Regulations or incentives to promote adoption and investment in RNG.

• Mechanism for payment of ‘cost premium’ associated with generating RNG.