By May 29, 2017 Read More →

New methane emissions regulation smart policy and politics for Ottawa, industry

methane emissionsMethane emissions regulations will be coordinated with provinces like Alberta to avoid duplication, unnecessary cost

The Canadian environment department has issued new regulations to curb methane emissions from the oil and gas sector by 40 to 45 per cent by 2025. Canada’s move is part of the broad Paris climate strategy of decarbonizing existing energy systems while new clean energy technologies gain traction in the marketplace. The regulations were greeted with mild criticism from environmental groups and support from industry.

methane emissions

Canadian Environment Minister Catherine McKenna.

The regulations “will require industry to conserve valuable natural gas by regularly checking and fixing gas leaks and adopting new practices that prevent the gas from being vented into the air during oil and gas production,” according to a government backgrounder.

“These requirements will apply to oil and gas facilities that are responsible for the extraction, production, processing, and transportation of crude oil and natural gas. This includes oil and gas wells and batteries, natural gas processing plants, compressor stations, and supporting pipelines.”

The government estimates that in 2012 close to 90 per cent of methane emissions from the oil and gas sector came from upstream activities, mostly from a large number of small facilities, which would be unlikely to have protocols for tracking emissions. The government calculates the compliance cost to industry at $374 million between 2018 and 2035.

Methane (CH4) is a greenhouse gas that is 25 to 84 times as potent as carbon dioxide over a 20-year period and accounts for 25 per cent of human-caused global warming. The government estimates that from 2018 and 2035, the new regulations will reduce GHG emissions by about 282 megatonnes.

methane emissions

Alberta Minister of Environment and Parks Shannon Phillips

Alberta announced its intention to reduce methane emissions in 2015 as part of the Climate Leadership Plan. Ottawa says it will work with provinces  to establish “equivalency agreements” that avoid duplication, as long as they achieve similar or better outcomes.

The Canadian oil and gas sector is “very aligned with the objective of 45% reduction of methane by 2025,” Patrick McDonald, director of climate and innovation with the Canadian Assoc. of Petroleum Producers, said in an interview.

“Our industry has been a leader in the space for a number of years. We’re continuing to innovate and intend to lead the world in terms of lower emission production mechanisms.”

McDonald says oil and gas producers are reviewing the new standards to determine how best to comply. Improved technology will be a big part of the solution, as will stricter maintenance and repair programs for facilities.

“On the operational maintenance side, that is a significant component where we could improve performance,” he said, noting that the emissions reductions would mostly occur at existing facilities.

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Environmental groups welcomed the stricter standards, but complained that pushing implementation back from 2020 to 2023 was the result of industry lobbying.

This “means the unnecessary release of an additional 55 million tonnes of carbon emissions between now and when the regulations reach their final target,” Environmental Defence said in a press release.

methane emissions

Ian Bruce,science and policy director of the David Suzuki Foundation.

Ian Bruce,science and policy director of the David Suzuki Foundation said in a release that cutting methane emissions is one of easiest and most affordable actions oil and gas companies can take to shrink their own “climate change pollution.”

“Industry has long known about this problem and has the technology to fix it, yet new peer-reviewed science shows it has underreported the magnitude of the problem by more than 250 per cent in the British Columbia,” he said.

“We can’t afford to delay action any longer. Industry needs to take responsibility now.”

McDonald argues that industry is ready to take action sooner than the regulations call for.

“Regardless of the government’s timeline on implementing [the regulations], it’s not stopping our industry to take early action and to be able to address these different components, that we think we can move in advance of that,” he said.

The battle over methane – which is the biggest component in natural gas – leakage rates is an important one.

Advocates argue that natural gas is a bridge fuel for electricity generation because when burned it emits half the carbon dioxide as coal, without particulates and other noxious gases that cause pollution.

But critics say that high leakage rates in the production and distribution of natural gas not only negate the advantage over coal, but have the potential to contribute even more to global warming.

The debate has been playing out in the United States for the past few years. Industry claims leakage rates are about 1.6 per cent, well below the 3.5 to four per cent threshold where methane emissions cause more harm than coal. American environmental groups echo their Canadian counterparts, arguing that both industry and governments have under-estimated leakage.

I’ll tackle the debate over methane leakage in a future column.

In the meantime, both the Canadian government and industry should be congratulated for tackling the issue. As the environmental groups point out, methane emissions are the low-hanging fruit for global warming mitigation strategies.

Moving aggressively on low-hanging fruit while more technically difficult challenges – such as reducing the carbon-intensity of oil sands crude – are begun seems like smart policy and politics for both government and industry.

Posted in: Markham on Energy

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