Cleaning Up the Air - Natural Gas
as appeared in Semi-Annual Report, December 1999
Natural gas is one of the cleanest, safest, most reliable and cost-effective fuels on the market today. Natural gas consists of 95 to 97% methane gas, which is almost entirely burned off by combustion. Any methane that escapes into the atmosphere breaks down through photochemical processes within 5 to 10 years, making the methane a non-permanent greenhouse gas. Natural gas is not toxic or corrosive so it will not contaminate ground water. If there is a leak, it dissipates rather than pools. Moreover, natural gas is distributed via underground pipeline from the utility to the user, reducing the possibility of accident by above-ground means such as oil tankers.
The 1997 Kyoto Protocol calls for Canada to reduce total greenhouse gas emissions by 6% from 1990 levels during the period 2008 to 2012. The transportation industry is responsible for more than 60% of Canada's air pollution, including 25 to 30% of the greenhouse gases (GHGs) that contribute to global warming (source: Canadian Natural Gas Vehicle Alliance).
Natural gas provides a reduction in emissions of about 75 percent compared to gasoline engines, and even more for diesel. Use of alternative-vehicle fuels, particularly natural gas, is an obvious way to reduce GHGs, smog and other forms of air pollution. The exhaust produced by heavy-duty diesel trucks and buses poses a special threat to the environment. It contains high concentrations of fine particulate matter that acts as a lung irritant, aggravating asthma and respiratory diseases. It has also been linked to cancer.
Your Clean Environment Funds are well represented by companies who either use or provide natural gas. For example, Canadian Hunter Exploration Ltd. is one of the premier natural gas exploration companies in Canada. Besides having the strongest balance sheet in the industry, the company is also among the lowest cost producers of natural gas. Calpine Corporation is one of the largest independent power producers in the United States. Its modern natural gas and geothermal power plants are 30-40% more efficient, and far cleaner, than traditional coal-fired plants. Ballard Power Systems Inc. and Global Thermoelectric Inc. have developed revolutionary fuel cells and power generators, which will help society move to emission-free forms of transportation in the coming decade. This equipment can run on a variety of cleaner fuels, including natural gas. As well, companies such as Direct Energy Income Trust (natural gas delivery for home heating systems) and CFM Majestic Inc. (natural gas fireplaces) help reduce emissions from less efficient coal and wood burning alternatives. We invest in companies such as these not just because they provide environmentally beneficial products and services, but also because we believe they are very well positioned to deliver strong, profitable growth.