The case against fossil fuels - and for a path to Net Zero Energy

The world is in trouble. We all know this. The stream of data and warnings coming from the scientific community about the dangers of climate change should speak volumes about the seriousness of the problem. The science is accepted and clear; we are warming our planet and the global effects could be catastrophic. It's not too common to come across anyone that denies the science anymore, so it begs the question, why aren't we doing anything about it? Sure, we all try to pitch in by recycling or specifying a high efficiency boiler in our design, but this is hardly solving the problem. Some of us might even joke about how "we're screwed", or simply put our faith in technology hoping it will dig us out of this mess. But as Naomi Klein discussed in her book This Changes Everything, this is just another way of ignoring the problem. We are all consumers so this isn't meant to point the finger, but simply to be a call to attention that we (including myself) can't just ignore the problem or even be overwhelmed by it, we need to start doing something. The choices are clear, we make big changes, or our species and many others are in big trouble. This is a big distinction we need remind ourselves of. This isn't about 'Saving the Planet'. No, this is about saving our species. The planet has been here for billions of years; it has lived through meteor strikes, super volcanoes, magnetic pole reversals and many worse things than we could ever throw at it. This isn't about the planet, this is about us! So in the spirit of finding solutions, this article presents the case against using fossil fuels in buildings (namely natural gas - or methane as it should be called) and for using electricity on our way to net zero.

First, the case against fossil fuels; reasons why we need to stop using natural gas (methane) immediately:

1. Our carbon budget is running out, fossil fuels must stay in the ground!

The science is quite clear. To have an 80% chance of keeping our climate from warming more than 2°C (which is an already scary amount which will cause significant changes to our climate and way of life) we can't release more than 565 gigatonnes (GT) of CO2 into the atmosphere. However, the proven fossil fuel reserves, if burned, would emit 2795 GT of CO2 into the atmosphere. This is a shocking amount and illustrates quite easily not just the scale of the problem, but what must be done as well. We have 5 times the reserves in the ground than we can safely burn! The only option we have (to avoid some pretty catastrophic climate change) is to leave most of the fossil fuels in the ground. It is as simple as that. Let's be clear, we don't know exactly what going past 2°C would look like, but the models are not rosy. Four degrees of warming could raise global sea levels by one to two meters by 2100; this would threaten many island countries and major cities including The Maldives, New York, LA, Vancouver, London, Mumbai and Hong Kong. Not to mention the increased droughts, food shortages, animal and plant species extinction, economic costs from storms and disasters, political unrest from climate refugees etc... We should remember that the warming and increased occurance of weather related events that we are already experiencing, like the flooding in Calgary, or the historic drought in California is from a 1°C rise in global temperatures, do we really want to find out what happens at 4°C?

2. We are not paying the true cost for fossil fuels

We all have a natural perception that fossil fuels (including methane) are cheaper than renewable sources of energy. But the truth is, the price you pay for your natural gas on your utility bill, or for oil at the pump is not the real price for those fuels. The world spends almost half a trillion dollars on fossil fuel subsidies every year. In Canada alone, we spend $34 Billion dollars on fossil fuel subsidies every single year! In this regard, Canada is a world leader! While we slash budgets on social programs, healthcare, education and research, we are handing billions of dollars in tax breaks and support to energy companies. So let's stop fooling ourselves, methane isn't cheap, we just subsidize it with our tax dollars. When the momentum finally shifts and the world starts getting serious about climate change, rest assured, these subsidies will disappear, which will show us the true cost of fossil fuels. My guess is we'll be quite surprised at the true price. If we also consider the environmental, pollution and health costs of using fossil fuels, the costs go even higher. A recent paper has estimated the extra cost of fossil fuels when pollution costs are factored into the price. Natural gas in particular was 11 cents/kWh ($30/GJ) more expensive when pollution costs were factored in; this is a pretty startling number considering today's natural gas price is below 2 cents/kWh!

3. Natural gas (methane) is not a bridge fuel - methane leakage makes it worse than coal

Perhaps it is the word 'natural' in natural gas that makes it sounds cleaner than it is. I don't know where the perception comes from, but let's be clear, methane is not clean! In fact, it is dirtier than coal. This might surprise some people so let me explain why this is true. The typical quoted emissions factor for natural gas in Alberta is 0.184 kgCO2/GJ. But this number completely ignores the effect of methane (unburnt natural gas) leakage into the atmosphere during natural gas extraction, processing, storage and transmission. Why is this a factor? Because unburnt methane is 86 times more potent of a greenhouse gas than CO2 over a 20 year period (and 7.6 times over 500 years). What effect does this have? Well, even a 1% leakage rate almost doubles the emissions factor to 0.34 kgCO2/GJ. In fact, leakage must be kept below about 2.8% for methane to have an emissions advantage over coal. So what is the actual leakage rate? The exact number is still debated, but this study (update from the original 2011 paper) from Cornell University found emissions to be in the range of 3.6-7.9%. Even official EPA estimates (EPA. 2011. Inventory of U.S. greenhouse gas emissions and sinks: 1990–2009. 14 April 2011. U.S. Environmental Protection Agency, Washington, DC) estimate the methane leakage rate at 2.5% for conventional gas extraction and 3.9% for unconventional gas extraction (eg. fracking). So even at the EPA's lower estimate, natural gas is 3.15 times dirtier than its oft stated emissions factor. To make matters worse, a review of more than 200 earlier studies confirms that emissions are considerably higher than official estimates. So much for a bridge fuel, might as well be burning wood.

4. Fracking is an environmental disaster - but luckily it won't last long

Look, everyone has heard about how terrible fracking is, so why are we ignoring this? Besides the social effects of fracking, earthquakes, the increased methane leakage (as mentioned above), fracking also uses an insane amount of water full of toxic chemicals. By the industry's own estimates each well uses between 8 and 24 million litres of water! This toxic water often contaminates water reservoires as also evidenced by people lighting their water on fire (seen in the documentaries Gas Land, Gas Land 2 and CBC's Shattered Ground documentary). As seen in CBC's documentary this water contamination is taking place right here in Alberta, and just recently a magnitude 4.4 earthquake in Alberta was linked to fracking! Luckily, the tide is slowly turning against fracking with bans now in place in New York, Scotland, Wales, France, Tasmania, and more locally, Quebec. There is a reason these places are banning fracking and we should be asking ourselves why we allow this to happen where we live.

Another factor to consider is the whole claim of 100 years of natural gas reserves. The claim is that we are awash with so much natural gas. The truth is, we might be in for a very rude awakening. As discussed here the shale gas revolution might have been grossly overstated. There is zero empirical evidence to support the 100 year supply myth and in fact US shale production has peaked in many areas. Part of the reason the shale gas revolution is overstated is that fracking wells experience very high decline rates, so the production in years 4 and 5 are vastly different than in year 1. In Bill Power's book Cold, Hungry and in the Dark he makes a pretty compelling argument that we might only have 7-8 years of natural gas left. The reality is, natural gas prices could increase very quickly if the shale bubble pops. To be fair, this is just one man's prediction, but whether he is right or not, point number 1 will certainly put huge pressure on natural gas prices.

5. Natural Gas prices are very volatile and this will likely get worse

Historically, natural gas cost has been one of the most volatile of all fuel sources. Currently close to historical lows at approximately $2.9/GJ (delivery costs not included), even in the past year the price has fluctuated by 60-100%; last winter, the spot price for natural gas in February hit $7/GJ before retreating to around $5/GJ in March and then slowly down to current levels. In the last 16 years, natural gas prices have crossed $8 per GJ four times, two of those times the price actually went above $13 per GJ (including 2008 before the global financial crisis). While predicting the price of natural gas is incredibly difficult, this is precisely the point we are trying to make; the future is completely uncertain. Especially considering the possible supply issues mentioned above, and the fact that producers in the US are trying very hard to ship natural gas overseas (where the cost is 3-4 times higher), the price of natural gas could be in for a very wild ride. Personally, I wouldn't want to place any bets that natural gas prices will stay low. If we also consider larger macro economic factors, such as global regulations to reduce fossil fuel usage (leading to stranded assets for energy companies - where fossil fuels are rendered worthless because they cannot be burned), carbon taxes (such as those proposed for Alberta), and the removal of fossil fuel subsidies, investing in natural gas based systems could be a very risky bet that goes against the tide of momentum.

6. Investing in fossil fuel infrastructure now ensures fossil fuel usage for decades

While most reasonable people will agree that 15-20 years from now, our fuel mix will (and should) look a lot different and renewables will be a much bigger part of our energy supply, most will not consider the fact that installing fossil fuel based systems now, ensures their usage for decades to come. The investments that we make now, and the systems that we install now, will be around for 20-30 years (including the infrastructure), so by installing natural gas based systems, we are setting ourselves up to use fossil fuels for a really long period of time. This either increases our environmental footprint for decades, or, as is more likely to happen, when natural gas prices rise too high, a new investment into renewables will need to be made. Either way, it is very wasteful and costly.

We have 5 times the reserves in the ground than we can safely burn! The only option we have (to avoid some pretty catastrophic climate change) is to leave most of the fossil fuels in the ground. It is as simple as that.

The Alternative

Ok then, having said all of that, what is the solution? Well, actually quite simple. Adopt a Net Zero design philosophy (minimize our energy demands) and switch to electric based systems. Here are the reasons why this makes sense:

1. An electric based system sets us up for a renewable future

Even though our electricity grid isn't based on renewables yet, it is slowly getting there, and if used with efficient mechanical systems (like geo systems; which use 70% less energy), is still better than natural gas based systems. The more important point is that we will install infrastructure that will get us to net zero eventually (combined with solar PV, discussed below) and will put us on a path to 100% renewable systems. As mentioned above, installing natural gas based systems ensures we will burn fossil fuels for decades. Whereas an electric based system allows us to use any fuel or new renewable technology as it becomes available. These technologies can be applied either at the grid or building level.

2. Solar PV is more financially attractive every year

As PV prices keep dropping and electricity prices keep rising, the investment in renewable solar PV will make more and more financial sense. Solar PV prices are already close to grid parity and all projections point to prices falling even further in the years ahead. Installing PV will further reduce the greenhouse gas emissions associated with the building and allow us to reach net zero. We have to remember that the efficiency of solar panels is also improving every year. Any new technology or breakthrough in green power can also be used immediately without changing our building's infrastructure.

3. Renewable systems already have attractive paybacks, which will only get better

Ignoring all of the 'non-financial' reasons why we should be doing this. Renewable technologies like geothermal heating and cooling and solar PV already have attractive paybacks which will only get better as time goes on (as the factors we discussed above change the energy landscape). Specifically commercial geothermal systems typically have paybacks of less than 10 years and for larger commercial buildings, can have paybacks of less than 4 years. Furthemore, there are very attractive tax incentives to installing renewables systems that make the investment even more attractive. There are also many new funding mechanisms (green bonds, utility partnership) that are becoming available to help pay for these systems. For example, Enmax offers solar leases that spread out the cost of a solar installation over 15 years; this is precisely how the Mosaic Centre paid for their 212 kW system.

4. Energy security

There is a reason more and more utility companies (Fortis, Enmax etc..) are investing in renewable technologies. They provide stable, safe returns on systems that require minimal maintenance and last an extremely long time. The lesson we should learn is that an investment in renewable technologies is an investment into financial security. As discussed above, fossil fuel prices are in for a very wild ride in the future. Why would we want to set ourselves up for that kind of risk? Renewable technologies free us from the whims of market forces (and speculators) and give us a consistent and stable energy price for the life of the building. Which system would you rather have when energy prices double or triple?


We are by no means saying that installing renewables and getting close to net zero is free or easy; there are obviously upfront investments that need to be made. But in the context of unmitigated climate change that threatens our very way of life, these investments are absolutely necessary. The part that makes it a no-brainer decision is that we already know (and have proven over and over) that green buildings and renewable technologies (applied properly) can have attractive paybacks. If we also factor in all of the external costs that come with burning fossil fuels, and consider all the risks (including potential price shocks) we will see renewable technologies as a bargain. All the headwinds are blowing against the use of fossil fuels, including future regulations, carbon prices, energy efficiency requirements, and the fact that there is only a limited supply. Prices have nowhere to go but up, the only question is how quickly. By investing in fossil fuels you are betting that the prices will remain low for decades and that climate change won't force governments to act. I certainly wouldn't take that bet.