An oil sands processing plant is seen near Fort McMurray, Alta., on Sept. 17, 2014.TODD KOROL/Reuters
Canada's oil and gas producers are committing to reduce methane emissions by 45 per cent by 2025 to combat climate change, but critics question whether their plan would achieve the stated goal.
Faced with looming government action, the Canadian Association of Petroleum Producers (CAPP) said Monday that it has a methane plan that would cost its member companies $700-million over eight years, and would be more flexible than draft regulations that Ottawa has published. Alberta is expected to release its draft rules this week.
"Our plan looks at how we could be more efficient and get the same outcome," CAPP president Tim McMillan said in an interview from Edmonton. "It's not cost-free by any measure," he said, but the federal price tag "would be substantially more than the $700-million we've put forward."
However, environmentalists who have consulted with Ottawa and Alberta on their plans argue CAPP's approach would fall short of what is needed to meet the 45-per-cent reduction target, especially given the lack of data on how much methane is currently being emitted from industry operations.
Methane – the basic constituent of natural gas – has a powerful but short-lived heat-trapping property when released into the atmosphere. Major oil companies – including Exxon Mobil Corp., Royal Dutch Shell PLC and Saudi Aramco – have pledged to dramatically reduce emissions that occur either intentionally as companies vent or flare gas when they produce oil, or unintentionally when the gas leaks from equipment.
In March, 2016, Prime Minister Justin Trudeau signed a deal with then-president Barack Obama by which both Canada and the United States would reduce methane emissions from oil and gas industry by 40 per cent to 45 per cent below 2012 levels by 2025. Under President Donald Trump, the Environmental Protection Agency has halted efforts to enact such regulations, though some oil- and gas-producing states are acting.
The Alberta and British Columbia governments are looking to regulate their own industries, and their rules could supersede federal ones if the provincial approach accomplishes the same environmental benefits.
Mr. Trudeau and Alberta Premier Rachel Notley are already under fire from conservative opposition leaders for climate policies that impose costs on the industry as the Trump administration moves to deregulate.
CAPP's announcement on Monday will give the opposition more ammunition if governments proceed with regulations seen by industry as overly onerous.
Under Ottawa's draft methane rules, companies would be required to visually inspect their far-flung equipment for leaks on a regular basis, and would be expected to measure emissions in each operation and reduce them by at least 40 per cent below 2012 levels.
CAPP wants companies to be able to use a "risk-based approach" in which the producers would assess where they are most vulnerable to major leaks and address those problems.
It also wants companies to be held to an overall goal of methane-emission reductions, giving them flexibility to pursue the most cost-effective approaches.
Mr. McMillan said Canada is already a leader in methane management, with provincial regulations that limit companies' ability to vent or flare the gas.
But environmental advocates argue CAPP's approach would make it difficult to verify the extent of current emissions, and measure the actual reductions.
Currently, the province and industry are dramatically underestimating methane emissions from industry operations, according to a recent study by Carleton University scientist Matt Johnson, published in Environmental Science & Technology journal.
"We are nowhere near having the measurement and reporting tools needed to make [CAPP's plan] a credible option," said Duncan Kenyon of the Calgary-based Pembina Institute. "The inherent problem with methane is that it likes to leak, and will leak wherever it can find a weakness."
He noted that the Alberta government has indicated it would give the industry some flexibility, insisting on tougher measurement efforts in the short term, with a regulated requirement to cut emissions after 2020 with the goal of a 45-per-cent reduction by 2025.
Alberta Energy Minister Margaret McCuaig-Boyd said the province will release its regulatory plan "in the coming days."
The industry is "up to the challenge of cutting methane pollution," she said in a statement. "Their early action and commitment to working with us to get this right means we are well on our way to an Alberta-made plan that puts the jobs of hard-working Albertans and a strong economy front and centre."
The International Energy Agency recently said global methane emissions could be lowered by as much as 75 per cent with current technology, and that improvements are necessary if natural gas is going to play a long-term role in greenhouse gas emission reduction.
CAPP's claim that its more flexible approach would protect industry jobs needs to be seen in light of the longer-term pressure on the industry to address climate change, said Drew Nelson, international climate-change director with Washington-based Environmental Defense Fund.
"The biggest players in the industry are looking at this as an issue of their survival," he said.
"Unless industry tackles methane head on, they will lose credibility as suppliers of an energy source for the future."