Across Ontario, there are municipalities that want natural gas and don’t have it. Others have it, but crave a future less dependent on fossil fuels.

The common denominator is Enbridge, an energy behemoth that wants to keep both kinds of Ontario municipalities on its balance sheet.

But their relationship is increasingly complicated.

For more than 70 years, the $50-billion Calgary-based private company has held a monopoly on natural gas distribution in Ontario. Enbridge delivers the methane-heavy fuel—one of Ontario’s cheapest and last remaining fossil fuel-based sources of energy—through its network of pipelines that crisscross the province, heating three-quarters of homes.

But the onset of the climate emergency—and the need to move away from fossil fuels—has posed an existential threat to Enbridge, the likes of which it has never experienced. Just as mobile phones replaced the landline, cheap energy from wind, water, and sun threaten to replace natural gas and other fossil fuels that create greenhouse gas emissions and exacerbate global heating.

“Enbridge is fighting for its survival,” Jay Shepherd, an energy lawyer, said in an interview. “They’re in this sort of death spiral. The people in Enbridge understand that Enbridge is not going to look the way it looks today 10 or 20 years from now.”

The company is doing everything possible to delay the inevitable, Shepherd said. This includes small investments in cleaner energy sources that are still being developed and evaluated, like hydrogen and “renewable” natural gas, which is methane captured from organic waste. But it mostly means doubling down on natural gas infrastructure at the local level.

Since the beginning of the year, Enbridge Gas, the company’s natural gas subsidiary, has been publicly asking local councils across Ontario—in Toronto, Hamilton, Ottawa, Kingston, Guelph, Whitby, Niagara Region, Grey Highlands, Durham, Severn, Prince Edward County, and dozens more—to support its natural gas expansion plans for the rest of this decade. That’s the same decade within which many of these municipalities have committed to achieving significant climate action. Enbridge has long tried to influence towns and cities to stay on or expand their use of natural gas, but its latest efforts seem like a full-scale defense of a fossil-dependent business model, even as both sentiments and technologies shift elsewhere.

To understand this latest approach and the recent history of Enbridge’s influence, The Narwhal and The Local reviewed several hundred pages of documents filed at the Ontario Energy Board and letters sent to local councils. Over the last three months, we also spoke to 22 people who work in and with Ontario’s energy sector. That includes five former Enbridge employees and multiple municipal staff, local councillors, energy officials, and lawyers. Almost all requested confidentiality, citing fear of professional retribution as their ongoing work includes continued engagement with Enbridge. Because of this, we have used single pseudonyms throughout this story for those who asked not to be named publicly. The Narwhal and The Local have verified each person’s identity and position.

Collectively, their firsthand accounts and analysis illustrate the lengths Enbridge has gone to in order to boost natural gas. The company has financially supported municipalities in developing energy plans and sponsored events such as town halls and council meetings to discuss them with the public. It has given municipalities money to help research new energy solutions, and paid for studies and marketing material that stress the importance of natural gas. And, according to sources, the company has made attempts to silence and stymie opposition from municipal staff and environmental experts across Ontario.

In Ontario, all energy companies are obligated to work with both municipalities and the Ontario Energy Board to deliver electricity and heat to residents. The board is an independent regulator mandated to ensure the natural gas and electricity industries are operating in a way that is financially responsible and in the public interest.

Enbridge has to secure agreements with a city or town before building new natural gas infrastructure. Such accords span decades and give Enbridge leave to construct and maintain pipelines, and share its costs with municipalities and residents alike.

“Enbridge is good at giving money here and there to keep relationships sweeter,” Henry said. “Anything under $100,000 here or there is chump change for them, with big benefits: it gets them goodwill and stops municipalities from being pointy-headed.”

One way Enbridge secures these agreements is by sending a specialized team to municipalities to engage in discussions about, and negotiate and advocate for, natural gas. This team falls under Enbridge’s conservation department, but its job is to ensure the expansion of natural gas. “These Enbridge employees are strongly incented to get results,” William, a former municipal energy official, said in an interview.

“[Enbridge is] in hyperdrive because they’re scared for their life.”

According to business plans filed at the Ontario Energy Board in 2021, Enbridge set up this team in 2020 with an administrative budget of $1.66 million “in an effort to further support” a growing number of municipalities that were creating or implementing climate change and energy plans. Enbridge told the board that almost a quarter of the province’s 444 municipalities were “seeking the kind of leadership and financial support from Enbridge Gas that would lead to broader and deeper partnerships to lower energy costs and reduce energy use and [greenhouse gas] emissions.”

To build these relationships, Enbridge began delivering information sessions on how to create plans that would achieve climate targets. It helped municipalities collect data and test new technology. And the company provided funding for local governments to “offset” the costs of creating and implementing climate and energy plans.

“Recognizing the essential role of municipalities in shaping and advancing climate action, Enbridge Gas has established a dedicated team of specialists to support these initiatives,” McNaughton said in an email to The Narwhal and The Local when asked about the team. “We are committed to emission reduction action.”

Over the next few years, the company expanded the team in size and budget. In 2022, the company posted a job for a “senior advisor, municipal energy solutions,” who would need to “advocate for the continued use of natural gas and its role as a low carbon option in the development of municipal energy plans”—even though the use of the methane-heavy fuel contributes significantly to global heating. The advisor would also have to “communicate internally key threats identified through interactions with municipalities and assist in developing solutions to offset these threats.”

“Once you get a community tied into an agreement, they could never leave,” William said.

“It became a de facto process that muted any municipal fights over the need for natural gas,” George, a former Enbridge employee, said in an interview. In fact, the only way a community can exit such an agreement is if the Ontario Energy Board, an independent regulator, allows it.

To date, the board has not done so.

Last year, the southwestern Ontario municipality of Leamington was denied when it asked the board not to renew its agreement with Enbridge for another 20 years. Documents show the municipality said it was “being forced” by Enbridge to enter a new agreement it “objects” to, which required Leamington to bear a significant portion of the cost of relocating gas systems, particularly when needed to maintain municipal drains. Enbridge, which has been the sole gas supplier for Leamington since 1889, countered that if the relocation costs weren’t split upfront, the company would have to pass them on to consumers. Because of this, the board decided the agreement had to be renewed “in the public interest.” Leamington lost an attempt to appeal in March.

For Enbridge, these long-term agreements are important because the company only makes money when buildings are connected to its infrastructure. And it makes money whether or not gas is used. “If they have a connection that is only used during a blackout once every 10 years but sees the user pay monthly costs for that connection … well, the value of that is still high,” Phillip, an energy utility official, said in an interview. “The value becomes diminished when you start to tell people there is an alternative and they don’t need natural gas infrastructure. If you’re not expanding in the utility world, you’re dying.”

That’s the blow the Ontario Energy Board delivered to Enbridge last fall.

In October 2022, the board took on what would become one of the largest and most consequential cases in its 64-year history: a review of Enbridge Gas’s plans up to 2030 in light of the energy transition needed to curb climate impacts. To ensure fairness and fiscal responsibility, energy companies submit business plans to the board for review every few years.

In Enbridge’s case, the board spoke to nearly three dozen stakeholders and reviewed thousands of pages about Enbridge’s plans to generate more than $16 billion in revenue, much of which would be made from continuing to charge Ontario homeowners for new connections to natural gas.

“In the end, individual people—your kids, my kids, the next generation—are going to make choices and these choices are not going to be fossil fuels.”

As part of its review, the board questioned whether or not natural gas should be the assumed future of energy in Ontario—and decided otherwise. In a stunning decision released last December, two out of three commissioners on the review panel said the company could no longer charge Ontario homeowners for new natural gas connections. The board argued that since climate commitments would render gas pipelines useless, it was unfair to charge customers for infrastructure with an expiry date. The board said these costs would have to be paid upfront by developers or Enbridge itself.

The decision shook the entire industry. A mere 15 hours after its release, the Doug Ford government vowed to overrule the independent Ontario Energy Board with legislation that would allow Enbridge to charge customers for new hookups for 40 more years. The province also pledged to weaken the board’s oversight power. Legislation cementing both moves passed last month.

By Enbridge’s estimate, the board’s decision could have wiped out $300 million of revenue this year and billions of dollars over the next five years—an impact government staff weighed heavily in internal discussions.

It could also have effectively ended the era of natural gas in Ontario.

Enbridge Gas responds to regulator ruling with missives to municipalities

George, the former Enbridge employee, said the Ontario Energy Board “went for the jugular” with its decision to shift the cost of natural gas hookups off of consumers—and the company responded in kind.

“Enbridge has been lobbying for itself for forever. Of course, as a business, it wants to keep it going,” George said. “The board’s decision meant Enbridge now had to fight for its life.”

Weeks after the decision, Enbridge Gas began sending city councils across Ontario letters asking that they support the Ford government’s legislation—a move one rural deputy mayor called “a blanket public relations effort.”