Natural Gas Demand Increasing

Ontario is a significant consumer of natural gas, representing 24% of total Canadian demand, making it the second largest consuming province after Alberta, according to the National Energy Board. Natural gas is used for space heating and hot water within homes and businesses, and steam and process heat for industry, providing approximately 15% of the electricity generated within Ontario.
The largest consuming sector of natural gas in 2017 in Ontario was the industrial segment, at 55% of the total gas consumed. According to NEB statistics, the residential industry represented 25% of gas consumed, followed by commercial, at 18%.

The industrial sector uses natural gas as a fuel for process heating, in combined heat and power systems, and as a raw material to produce chemicals, fertilizer, and hydrogen, says the U.S. Energy Information Administration. In 2017, the industrial sector accounted for about 35% of U.S. natural gas consumption, and natural gas was the source of about 31% of the U.S. industrial sector's total energy consumption.

The commercial sector also uses natural gas to heat buildings and water and to operate refrigeration and cooling equipment. About 3.5 million homes and 130,000 businesses currently use Ontario natural gas south.

Last year, the Ontario government announced plans to expand natural gas access to families and businesses throughout rural and Northern Ontario via a partnership with local communities and the private sector. The first such expansion came to the Chatham-Kent region in March 2019 and included the construction of two new transmission pipelines and supporting distribution mains.

World Demand for Natural Gas Increases

According to the International Energy Agency (IEA), demand for natural gas jumped by 4.6% in 2018. The United States led the growth last year, with the switch from coal to gas responsible for nearly half the increase. Weather also significantly impacted gas demand in Canada and the United States, with a colder-than-average winter and hotter-than-average summer driving up demand in buildings and for power generation.

Gas demand in China increased by almost 18% as the country accelerated efforts to reduce local air pollution.

In the next five years, the IEA expects gas demand to be driven by the Asia Pacific region, which is forecast to account for almost 60% of the total consumption increase to 2024. China will be the primary driver for gas demand growth, expected to account for about 40% of the total gas demand increase by 2024.

Although coal-to-gas switching, residential use, and power generation all play a significant role in the growing global demand for natural gas, the industrial sector is expected to account for almost half of the increase in natural gas consumption globally, covering energy for processes and chemical feedstock.

With natural gas use increasing in both the industrial and residential sectors, it's little wonder that demand has also strengthened. Although the Asia-Pacific region will mainly drive future growth, the United States and Canada will continue to play critical roles as natural gas producers and consumers.