The Ontario Government is looking at a way to reduce energy costs in some northern Ontario towns.

The Province has committed $100,000 from the northern Ontario Heritage Fund Corporation for a feasibility study that will look at converting Marathon, Manitouwadge, Schreiber, Terrace Bay and Wawa to liquefied natural gas.

LNG conversion could help places that can't access traditional natural gas pipelines to use the inexpensive fuel, Minister of Northern Development and Mines Michael Gravelle told CBC.

"Liquified natural gas is a different form, and may I say, an odourless, non-toxic, non-corrosive form of gas that basically gets chilled so it can be transported by insulated vehicles," Gravelle said.

Converting Terrace Bay to LNG would cut residents' heating costs by around half, mayor Jody Davis said. 

Michael Gravelle

Northern Development and Mines Minister Michael Gravelle said LNG allows communities who can't access a conventional natural gas pipeline to use the inexpensive fuel. (Jeff Walters/CBC)

People there currently heat their homes with electricity, propane or wood — and that's expensive, he said.

"Over the last several years in January, February, March, many of our residents had electric bills that were over $1,000 a month, so that's quite a load for people that are on fixed incomes," Davis added.

Davis said numbers provided to him by an LNG delivery company suggest LNG could be 55 per cent cheaper than electricity, 50 per cent cheaper than fuel oil and 45 per cent cheaper than propane.

Gravelle anticipates the results of the study within three or four months, he said.