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Canadian Energy Centre

Canadian renewable propane could be a fuel of the future

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6 minute read

From the Canadian Energy Centre

By Deborah Jaremko

‘We want to make sure we reduce emissions while keeping in mind affordability and reliability’

Four years ago, Craig Timmermans’ two Ontario radio stations became Canada’s first to go on the air from off the grid 

Faced with an $80,000 connection fee and ongoing electricity delivery costs, Timmermans opted for another solution: solar and propane.  

“I did our power calculation: five staff, hot water tank, heating system, etc., right down to a coffee maker…then we need a heating source, so it made sense to go with propane,” he said. 

“When I looked at all the different heating systems, I found that propane is hands down the most efficient.”  

Now Timmermans is building a new home that will run exclusively on propane. He says he wanted propane appliances due to their efficiency. 

Ontario radio operators KT and Craig Timmermans power their off-grid business with propane and solar. Photo supplied to the Canadian Energy Centre

“A propane cooking stove is the best cooking appliance…The heat is continuous, it’s instant. It just works so well.” 

Lower environmental footprint 

Propane serves many purposes in Canada, from supporting mining and oil and gas operations to fueling heating, cooling, cooking and power in remote, off-grid communities. 

In these communities, propane can replace diesel with a lower environmental footprint. Propane’s carbon intensity is estimated at 72 grams of CO2 equivalent per megajoule, compared to 100 grams for diesel.  

That could be slashed by more than half with a move to renewable propane, according to the Canadian Propane Association (CPA). The CPA has commissioned a new report that looks at potential pathways to producing renewable propane in Canada.  

Propane storage tank. Getty Images photo

Pairing with heat pumps and hybrid energy systems 

The report serves as the foundation of the CPA’s roadmap for scaling up renewable propane production in Canada.  

The CPA says the fuel is ideal for pairing with electric heat pumps to provide back-up heat in low temperatures, especially in remote regions that are not near natural gas grids.  

It’s also promising for hybrid systems where solar or wind provides baseload energy and renewable propane provides support when renewables are not available. 

Part of propane’s appeal – renewable or otherwise – is that it’s easily liquefied and stored in pressurized cylinders, making it a versatile energy source used almost anywhere, the CPA says. 

“We want to make sure we reduce emissions while keeping in mind affordability and reliability as key pillars in any energy transformation,” said CEO Shannon Watt. 

“Propane goes where other fuels can’t go.” 

Producing renewable propane 

Today, most propane produced in Canada comes as a byproduct from natural gas processing.  

Among other sources, renewable propane can be co-produced with renewable diesel and sustainable aviation fuel, made primarily from plant and vegetable oils, animal fats or used cooking oil. 

Cost is the barrier to renewable propane production – about double what it takes to produce conventional propane, the CPA says.  

The United States is offering incentives for renewable propane that are not available in Canada.  

Through the Inflation Reduction Act, Renewable Fuel Standard and Low Carbon Fuel Standard, renewable propane producers can receive C$20 per gigajoule (or more than C$30 per GJ in California).  

Through Canada’s Clean Fuel Regulations, the incentive is just over C$5 per GJ, or about C$10 per GJ in British Columbia.  

“In order to attract investment the same way as the U.S. under the Inflation Reduction Act, we need to have competing measures in place,” Watt said.  

“We’ve got the technology and we’ve got the feedstocks. We’ve got a lot of those big puzzle pieces that we need. Now we need the dollars to flow.” 

The Ridley Island Export Terminal in Prince Rupert, B.C. ships Canadian propane to overseas markets. Photo courtesy AltaGas

Exporting renewable propane to the world 

A large-scale renewable propane industry wouldn’t just benefit Canadians, she said.  

That’s because global demand for propane is growing.  

Market research firm IMARC Group projects world propane use will rise to nearly 250 million tonnes by 2032, more than one-third higher than demand last year.  

The transition to cleaner energy sources is a major factor propelling growth, analysts said. 

Until recently, Canada’s only propane exports went to the United States. That changed with the startup of two export terminals at Prince Rupert, B.C.  

Since 2017, Canada’s propane exports outside the U.S. have grown substantially, reaching 42 per cent of total propane exports in 2023, according to the Canada Energy Regulator. 

“We export more and more propane to non-U.S. locations,” Watt said.  

“Now, roughly 50 per cent of Canadian propane is shipped to South Korea, Japan and Mexico, displacing higher emission intensity sources, namely coal and timber.” 

Exporting renewable propane would take the benefits a step further, she said.  

“That carries the conversation on about reducing global emissions and not just what’s happening in our own backyard.” 

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Artificial Intelligence

World’s largest AI chip builder Taiwan wants Canadian LNG

Published on

Taiwan Semiconductor Manufacturing Company’s campus in Nanjing, China

From the Canadian Energy Centre

By Deborah Jaremko

Canada inches away from first large-scale LNG exports

The world’s leading producer of semiconductor chips wants access to Canadian energy as demand for artificial intelligence (AI) rapidly advances.  

Specifically, Canadian liquefied natural gas (LNG).  

The Taiwan Semiconductor Manufacturing Company (TSMC) produces at least 90 per cent of advanced chips in the global market, powering tech giants like Apple and Nvidia.  

Taiwanese companies together produce more than 60 per cent of chips used around the world. 

That takes a lot of electricity – so much that TSMC alone is on track to consume nearly one-quarter of Taiwan’s energy demand by 2030, according to S&P Global. 

“We are coming to the age of AI, and that is consuming more electricity demand than before,” said Harry Tseng, Taiwan’s representative in Canada, in a webcast hosted by Energy for a Secure Future. 

According to Taiwan’s Energy Administration, today coal (42 per cent), natural gas (40 per cent), renewables (9.5 per cent) and nuclear (6.3 per cent), primarily supply the country’s electricity 

The government is working to phase out both nuclear energy and coal-fired power.  

“We are trying to diversify the sources of power supply. We are looking at Canada and hoping that your natural gas, LNG, can help us,” Tseng said. 

Canada is inches away from its first large-scale LNG exports, expected mainly to travel to Asia.  

The Coastal GasLink pipeline connecting LNG Canada is now officially in commercial service, and the terminal’s owners are ramping up natural gas production to record rates, according to RBN Energy. 

RBN analyst Martin King expects the first shipments to leave LNG Canada by early next year, setting up for commercial operations in mid-2025.  

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Canadian Energy Centre

Report: Oil sands, Montney growth key to meet rising world energy demand

Published on

Cenovus Energy’s Sunrise oil sands project in northern Alberta

From the Canadian Energy Centre

By Will Gibson

‘Canada continues to be resource-rich and competes very well against major U.S. resource bases’

A new report on North American energy highlights the important role that Canada’s oil sands and Montney natural gas resources play in supplying growing global energy demand.

In its annual North American supply outlook, Calgary-based Enverus Intelligence Research (a subsidiary of Enverus, which is headquartered in Texas and also operates in Europe and Asia) forecasts that by 2030, the world will require an additional seven million barrels per day (bbl/d) of oil and another 40 billion cubic feet per day (bcf/d) of natural gas.

“North America is one of the few regions where we’ve seen meaningful growth in the past 20 years,” said Enverus supply forecasting analyst Alex Ljubojevic.

Since 2005, North America has added 15 million bbl/d of liquid hydrocarbons and 50 bcf/d of gas production to the global market.

Enverus projects that by the end of this decade, that could grow by a further two million bbl/d of liquids and 15 bcf/d of natural gas if the oil benchmark WTI stays between US$70 and $80 per barrel and the natural gas benchmark Henry Hub stays between US$3.50 and $4 per million British thermal unit.

Ljubojevic said the oil sands in Alberta and the Montney play straddling Alberta and B.C.’s northern boarder are key assets because of their low cost structures and long-life resource inventories.

“Canada continues to be resource-rich and competes very well against major U.S. resource bases. Both the Montney and oil sands have comparable costs versus key U.S. basins such as the Permian,” he said.

“In the Montney, wells are being drilled longer and faster. In the oil sands, the big build outs of infrastructure have taken place. The companies are now fine-tuning those operations, making small improvements year-on-year [and] operators have continued to reduce their operating costs. Investment dollars will always flow to the lowest cost plays,” he said.

“Are the Montney and oil sands globally significant? Yes, and we expect that will continue to be the case moving forward.”

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