CGC Calls on Ontario Premier to Suspend Regulation O.98/12

Green companies at risk of bankruptcy as 'green layoffs' begin

TORONTO, June 19, 2012 /CNW Telbec/ - The Canadian GeoExchange Coalition (CGC), Canada's national industry association for geothermal heat pump technology representing over 130 members in Ontario, wrote to Premier Dalton McGuinty yesterday asking for the immediate suspension of Regulation O.98/12. The CGC has learned of over 30 recent lay-offs at drilling companies and is expecting additional layoffs for system designers, installers as well as product manufacturers and distributors across the province.

The ill-conceived and hastily-written regulation hurts Ontario's green energy industry, hurts Ontario's small business and unfairly targets geothermal drilling. CGC has recommended that companies involved in geothermal drilling more systematically follow long-established safety guidelines used for comparable drilling activities within Ontario while more thorough and fair regulation is drafted and publicly consulted.

On April 20, 2012, a driller encountered natural gas while drilling a geothermal borehole in Oakville. This incident triggered a series of events which led to the adoption of Ontario Regulation O.98/12. The regulation requires drilling companies to apply for an environmental compliance approval (ECA) per the Environmental Protection Act. For the purpose of the Environmental Bill of Rights (EBR), ECAs are classified as Class II instruments and are subject to a minimum of 45 days posting on the Environmental Registry. As a result, as of June 19, 2012, there will be no drilling for geothermal purposes in Ontario until at least the end of August.

"This regulation was adopted in a few days without any industry or public consultation. Government officials seem to be improvising rules on a daily basis as they attempt to adapt the ECA process to geothermal drilling," said Denis Tanguay, CGC President & CEO. "The Ontario geothermal heat pump industry deserves a regulatory framework that is developed through proper consultation. The current improvised regulation is equivalent to a province-wide stop-work order for all geothermal drilling for an extended and unknown period of time for no valid technical, scientific reason," he added.

The CGC is also highly concerned that in an already tight and difficult market, the regulation can create market imbalances among drilling companies. This regulation has the adverse effect of helping the strongest companies eliminate their competitors. It is not a desirable outcome for the industry, consumers, or for the government.

The Canadian GeoExchange Coalition acts as the industry catalyst to unite private and public sector stakeholders, and to expand the market for geothermal heat pump technology in Canada. As the nexus of information, training, certification, standards and public awareness, we work to build the necessary infrastructure to foster Canadian industry growth. Website: www.geoexchange.ca

ONTARIO GEOTHERMAL HEAT PUMP INDUSTRY BACKGROUNDER

• There are more than 200 CGC Qualified Companies under the CGC Global Quality GeoExchange Program in Ontario. Together, they employ thousands of individuals - 300 of which are fully accredited by the CGC as either residential designers or installers.
• There are 30 CGC Qualified Drilling Companies in Ontario. In the past 5 years, the CGC estimates that between 8,000 and 10,000 vertical geothermal boreholes were constructed in Ontario. These companies have safely drilled and constructed the vast majority of these boreholes. Meanwhile we estimate over 50,000 shallow boreholes are executed annually using comparable drilling technique across Ontario for water wells alone.
• The economic activity generated by the ecoENERGY program alone (only residential retrofits) is estimated at more than $300,000,000. CGC estimates that about 90 % of the value of a GHP systems is money spent on Ontario goods and services. This economic activity remains in Ontario in every region of the province.
• The geothermal heat pump (GHP) industry was hard hit by the 2009 economic downturn and has still not recovered. Significant electricity price increases in the residential sector are also affecting geothermal as a green energy option for Ontarians. The application of Regulation O.98/12 impacts negatively geothermal companies working in the new home sector and in the commercial sector - where vertical boreholes are more frequent.
• Between April 2007 and December 2012, under the ecoENERGY Retrofit - Homes Program, the Canadian GeoExchange Coalition (CGC) certified 11,853 residential geothermal heat pump (GHP) systems in Ontario. Of that number 1,813 were vertical borehole systems.
• Through matching funds, the Government of Ontario provided approximately $50,000,000 in financial assistance to Ontario home owners for the installations of GHP systems.
• About 68 % of the retrofits under the federal and provincial programs replaced electricity and heating oil. The CGC estimates that about 8,060 homes are responsible for the reduction of approximately 50,000 tons of GHG emissions (CO₂ eq.) annually.¹
• GHP activity in the commercial and institutional sectors was also strong over the period. The CGC estimates that the level of activity - calculated on a tonnage basis - was at least equivalent to the activity in the residential sector. A significant portion of commercial systems are equipped with vertical boreholes.
• On May 14, 2012, the CGC announced the deployment of a new geothermal loop installation course. This course focuses on geothermal applications using HDPE pipes in conventional open loops, lake loops as well as closed vertical and horizontal loops. The course is meant to protect the integrity of both residential and commercial installations over time and to promote best environmental protection and safety techniques as well as reflect on safety, emergency procedures and guidelines.
• On May 23, 2012, the CGC announced an important addition to its CGC Global Quality GeoExchange Program: a new geothermal quality program designation for geothermal loop installers. The new CGC Loop Installer accreditation is valid for both residential and commercial installations.

Canadian GeoExchange Coalition
June 19, 2012

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¹ Comparative Analysis of Greenhouse Gas Emissions of Various Residential Heating Systems in the Canadian Provinces. Canadian GeoExchange Coalition - April 2010.

For inquiries:
Ted Kantrowitz [phone], extension 34 [email protected]