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Frequently Asked Questions

What is natural gas and where does it come from?

Not surprisingly, natural gas is entirely natural. More specifically, it’s made of the remains of ancient plants and animals that ruled the earth about 500 million years ago.

Millions of years ago, a sea covered Canada’s prairie provinces. Tons of creatures known as trilobites (they looked like tiny crabs) and small plants lived in the sea. They survived on water and energy from the sun. When trilobites and their fellow plant creatures died, they fell to the bottom of the sea where they were buried in layers of mud and sand. Over time, they got buried deeper and deeper.

The pressure and weight of the layers turned the mud and sand into rock. Layers of sand, dirt and mud covered these animals and plants and eventually it all changed to rock. The buried plants and animals decayed into tiny bubbles of colourless, odourless gas. The gas was then trapped in the pores of the rock deep underground.

How long will our natural gas supplies last?

Discoveries of new reserves have expanded our supply to well beyond 100 years. This fact is strongly supported by statistics put out by both the National Energy Board and Natural Resources Canada’s Geological Survey of Canada.

Do we import natural gas from overseas?

No.

In fact, nearly all the natural gas consumed in North America – 98 per cent – is produced in the Canada and the U.S.

(Source: Union Gas (2012). Retrieved from: http://www.uniongas.com/environment/TheNaturalChoice.asp)

How much of Ontario’s energy comes from natural gas?

A lot. And it’s growing.

About 15 per cent of Ontario’s current energy supply comes from natural gas fired electricity plants. With coal facilities being phased out, and renewables being weather-dependent and only able to contribute about four per cent of energy needs, natural gas is the pathway to a balanced energy future.

Note: ‘Other’ category above is not necessarily renewable as it contains natural gas/oil biomass and wood pellet generated power.

(Source: IESO (2012). Retrieved from: http://www.ieso.ca/imoweb/media/md_supply.asp)

Is shale gas having an effect on Ontario?

Yes. A very positive effect.

Shale gas is expected to represent a large portion of future natural gas production in North America. Ontario customers are already benefitting from the affect that abundant shale supplies have had on overall North American natural gas prices, as today natural gas delivers great value and is at record low prices.

Having natural gas available from both traditional sources in western Canada and shale sources is good for customers because it increases supply diversity and reliability. Ontario is fortunate to be located close to a number of shale gas basins, including Marcellus and Utica just south of the border, as having access to these sources reduces the amount of energy needed to move gas long distances.

And shale gas can be produced at a low cost compared to mature, traditional forms of natural gas production and that’s good for consumers. Natural gas producers are committed to investing in research and constantly working to improve extraction processes from an environmental perspective.

Are natural gas prices regulated?

Yes and no.

Natural gas distribution companies like Enbridge Gas Distribution and Union Gas buy the gas you use and the services to transport the gas to Ontario from its sources in a highly competitive open market. These costs are then passed onto customers without markup. As well, the Ontario Energy Board (OEB) reviews and approves their gas rates every three months before they can take effect, ensuring that the rates passed onto customers are fair and reasonable.

Natural gas, like other commodities, is publicly traded and the market price varies in response to factors such as weather or availability of supply. Distributors adjust the rates they charge customers for natural gas every three months to reflect ongoing changes in the market. These costs are then passed through to customers without any markup. All rate changes require OEB approval.