Advertisement

Alberta government reaches preliminary methane reduction deal with feds

A goose stands in front of the Alberta legislature on Wednesday, May 6, 2020. Emily Mertz/Global News

After years of negotiations, the province announced Tuesday that it had reached a preliminary agreement with the federal government that it calls a “major step toward providing Alberta’s oil and gas industry a single set of strong rules to reduce methane emissions and protect the environment.”

The Alberta government said the process to “stand down federal regulations” can start, which will allow the province to “build on an already excellent history of reducing emissions utilizing local expertise.”

“[It] confirms Alberta’s regulatory framework will achieve the same emissions reductions as the federal regulation by 2025,” the province said in a news release.
“Further, the provincial approach is expected to exceed the reductions of the federal regulation by 2030. The flexibility and innovation allowed in Alberta’s regulatory framework [mean the] industry can achieve emissions reductions in a more cost-effective manner and with more certainty around the regulatory process.”
Story continues below advertisement

The province said methane’s environmental impact is 25 times greater than carbon dioxide over a 100-year period.

“In 2014, the baseline year to measure reductions, an estimated 31.4 megatonnes carbon dioxide equivalent of methane was emitted from Alberta’s upstream oil and gas sector,” the government said.

“The Alberta approach is expected to reduce methane emissions by 45 per cent from 2014 levels by 2025.”

READ MORE: Canadian oil sector welcomes federal aid for large firms despite climate change conditions

This deal will undergo a review process and is subject to approval by the federal cabinet.

Story continues below advertisement

“This includes Environment and Climate Change Canada posting the preliminary agreement for a 60-day comment period. After responding to the public comments received, ECCC will finalize the agreement with an order in council,” the Alberta government said.

Though both federal and provincial rules were effective Jan. 1 — meaning two sets of overlapping methane reduction rules — federal rules still apply until the deal is done, the Alberta government said.

READ MORE: Trudeau announces $1.7B to clean up orphan wells in B.C., Alberta, Saskatchewan

The province said it revised the Alberta Energy Regulator’s Directives 060 and 017 to “align with details of the draft equivalency agreement.”

‘Clear set of rules’

Environment Minister Jason Nixon said the deal is proof that environmental and economic goals go together.

“It is a further testament to Alberta’s strong tradition of regulatory excellence and another successful example of the province retaining our own jurisdiction over our regulatory processes,” he said.

“Our large industries have consistently demonstrated that emissions reduction can be achieved through innovation and we will continue to support this approach.”

READ MORE: 4 Canadian energy firms blacklisted by world’s largest wealth fund over high emissions

Story continues below advertisement

Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers, said the agreement is good news for Alberta’s oil and natural gas producers, noting that intergovernmental collaboration to reduce regulatory duplication is crucial for environmental performance and economic recovery.

“It will reduce the administrative burden on companies and give them a single framework for tackling methane emissions when the agreement is finalized,” he said.

“The provincial framework supports a flexible, results-oriented approach to reducing emissions while stimulating technology and innovation essential to meeting our environmental performance goals at this critical time.”

Mark Scholz, president and CEO of the Canadian Association of Oilwell Drilling Contractors, said he is happy the governments are working together to streamline regulations.

“A single and clear set of rules for methane reduction will allow our industry to do what it does best, meet and beat expectations with world-class people and technology,” he said.