Faulty Study Exposes Enbridge’s Misleading Case for Ontario Gas Network Expansion

Enbridge‘s Misleading Study Raises Questions about Gas Network Expansion in Ontario

Introduction

Enbridge, the Calgary-based fossil fuel company, is facing scrutiny over a key study that supported its application to expand its gas network in Ontario. The study, conducted by consulting firm Guidehouse, erroneously inflated the cost of switching from gas to electricity for heating buildings by billions of dollars. The study‘s findings have been used by Enbridge to argue that a heating grid with further gas investments is a cheaper option than electrification for home heating. However, the flawed assumptions and biases in the study have raised concerns among experts and advocacy groups, who question the validity of Enbridge‘s claims.

Flawed Study and Misleading Claims

The Guidehouse study, commissioned by Enbridge, concluded that investing in a gas infrastructure would be a more cost-effective pathway to achieve net-zero emissions by 2050 compared to electrification. This conclusion contradicts other studies that suggest renewable energy is the clear winner from a cost perspective as the carbon price increases and the cost of wind and solar energy decreases. The study surprised experts from the Industrial Gas Users Association and advocacy group Environmental Defence, who are intervening in Enbridge‘s rate hike application. They found that the study contained errors and lacked transparency in its assumptions.

Kent Elson, a lawyer representing Environmental Defence, raised concerns about the reliability of the study and requested the disclosure of the assumptions underlying its conclusions. Enbridge initially resisted, but an order from the Ontario Energy Board (OEB) compelled them to release the figures for cross-examination. According to Elson, the disclosure revealed significant errors that swung the results by $140 billion, forcing Guidehouse to issue a correction.

Even after the correction, the validity of the report is still being questioned. During the hearings, the authors of the study conceded that they are not experts on the best path forward for the energy transition and did not seek expert opinions on alternative paths. This raises doubts about the study‘s credibility and its suitability for informing Enbridge‘s decision-making.

Implications for Decarbonization and Consumer Costs

The issue of decarbonizing buildings, particularly in heating, is crucial for Canada’s efforts to reduce greenhouse gas emissions. Heating buildings with fossil fuels, including natural gas, contributes significantly to emissions and poses challenges for achieving net-zero emissions by 2050. Ontario, in particular, has a significant reliance on gas for heating, with buildings being the third-largest source of greenhouse gas emissions in the province.

The flawed study and Enbridge‘s reliance on it to justify further investments in gas infrastructure raise concerns about the direction of the energy transition in Ontario. If Enbridge‘s gas investments are allowed to proceed, it could lock in more fossil fuel use for decades to come, hindering the adoption of renewable energy options. This not only undermines the decarbonization goals but also poses financial risks for customers who may be unable to switch to renewable alternatives. The upfront cost of renewable technologies like heat pumps may be higher, and if more affluent customers switch to renewables, it could leave a smaller group of customers bearing the cost of maintaining the gas infrastructure.

The Bias and Inaccuracy of the Guidehouse Study

Analysis conducted by independent experts and industry professionals highlights the biases and inaccuracies in the Guidehouse study that favor gas over electricity. Chris Neme, an expert in the energy industry, found that the study‘s assumptions about gas were optimistic while being overly conservative about electric alternatives. The study assumed the high market penetration of residential gas heat pumps and fully hydrogen furnaces, even though these technologies are not yet commercially available. At the same time, the study assumed that electric heat pumps would fail to achieve the same market penetration. Furthermore, the study assumed that the efficiency of electric heat pumps would degrade over time, while gas furnaces and heat pumps would not suffer the same degradation.

Neme outlined at least 13 major issues with the Guidehouse study, which raise serious questions about its objectivity and credibility. The Industrial Gas Users Association, whose expert was hired to review the study, also concurred that it was not sufficient to determine the best path forward and identified a pro-gas bias in the report.

Conclusion

Enbridge‘s misleading study and reliance on flawed data to support its gas network expansion in Ontario have raised concerns among experts and advocacy groups. The study‘s faulty assumptions and biases undermine its credibility and cast doubt on Enbridge‘s claims about the feasibility and cost-effectiveness of gas infrastructure compared to electrification.

With the urgency to decarbonize the building sector and reduce greenhouse gas emissions, it is crucial that decisions are based on accurate, objective, and transparent studies. Enbridge‘s case highlights the need for rigorous scrutiny of industry-sponsored studies and the importance of independent expert opinions to guide policy and investment decisions.

To achieve the goal of net-zero emissions by 2050, Ontario and other jurisdictions must prioritize the transition to renewable energy and promote energy-efficient technologies. The potential financial risks for customers and the long-term implications of investments in fossil fuel infrastructure necessitate careful consideration of alternative pathways that will drive decarbonization while ensuring affordability and equity.

In sum, the Enbridge case underscores the importance of ensuring that energy decisions are based on sound evidence and unbiased analysis, while also highlighting the need for greater transparency and public participation in shaping the future of energy systems.