(Disponible en français : Mesure conjointe pour la réduction des émissions de méthane : Le Canada et les États‑Unis)
Carbon dioxide (CO2) is a well-known greenhouse gas. However, according to Environment and Climate Change Canada, methane’s impact as a warming agent is estimated to be 86 times greater over a 20-year period and 34 times greater over a 100-year period.
As part of efforts to reduce greenhouse gases (GHGs), Canada and the United States are taking steps to reduce methane emissions from the oil and gas sector. With a focus on the Canadian context, this HillNote explores the regulatory situation in both countries.
In December 2015, the Paris Agreement was adopted by Parties to the United Nations Framework Convention on Climate Change (UNFCCC). The agreement’s central goal was to respond to climate change by limiting this century’s global average temperature rise to below 2 degrees Celsius above pre-industrial levels.
Canada’s commitments under the Paris Agreement include reducing GHG emissions by 30% below 2005 levels by 2030, and developing regulations to reduce methane emissions from the oil and gas sector.
In March 2016, Canada and the United States issued a Joint Statement on Climate, Energy, and Arctic Leadership. In this statement, the two countries committed to reducing methane emissions from the oil and gas sector by 40 to 45% below 2012 levels by 2025.
Building on a history of coordinated action to reduce air pollutant emissions, the statement outlined a joint Canada-U.S. commitment to regulate sources of methane emissions in the oil and gas sector, and to work collaboratively on federal programs, policies and strategies to reduce and measure these emissions.
According to GHG estimates from Canada’s 2017 National Inventory Report, waste, agriculture and the energy sector accounted for nearly all of Canada’s methane emissions in 2015. In particular, fugitive methane emissions from oil and gas exploration, production, transportation, and distribution accounted for 43% of Canada’s total (figure below).
Note: a. Percentages add to greater than 100 due to data rounding and formatting
b. Figure does not include negligible emissions attributed to land use, forestry, and industrial processes/product use
Source: Figure prepared by the author using data from Canada’s 2017 GHG National Inventory Report, Part 3 (page 15).
Canada’s Proposed Methane Emission Regulations
On 27 May 2017, the Government of Canada published the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) in the Canada Gazette. The aim of the proposed regulations is to introduce control measures to reduce fugitive and venting emissions of methane and other hydrocarbons from the oil and gas sector.
According to the regulatory impact analysis of the proposed regulations included in the Canada Gazette, close to 90% of 2012 methane emissions from the oil and gas sector came from “upstream” activities (e.g., exploration, drilling, production and field processing). For this reason, control measures in the proposed regulations target production processes and equipment from the upstream oil and gas sector.
New regulatory requirements would include:
- Facility production venting: Upstream oil and gas facilities would be required to limit vented volumes of hydrocarbons to 250 m3 per month as of 1 January 2023.
- Leak detection and repair: Certain upstream oil and gas facilities would be required to implement leak detection and repair (LDAR) programs as of 1 January 2020.
- Well completion by hydraulic fracturing: Except in British Columbia and Alberta where existing provincial measures cover these activities, sites where wells are drilled would be required to conserve or destroy gas instead of venting it as of 1 January 2020.
- Pneumatic controllers: Certain controllers would be prohibited from emitting hydrocarbon gas as of 1 January 2023.
- Pneumatic pumps: Pumps would be prohibited from emitting hydrocarbon gas or would need to be equipped with an emissions control device at certain facilities as of 1 January 2023.
- Compressors: Measurement of the flow rate of hydrocarbon emissions would be required from sealing systems at least once per year as of 1 January 2020.
Canada’s final methane emission regulations for the upstream oil and gas sector are expected to be published in the Canada Gazette, Part II, in early 2018.
United States’ Methane Emission Standards
In June 2016, the U.S. Environmental Protection Agency (EPA) issued a notice to announce amendments to the New Source Performance Standards (NSPS), aiming to reduce methane and volatile organic compound emissions from new, modified and reconstructed sources in the oil and gas industry.
As described in the final updates, the standards apply to the following emission sources:
- hydraulically fractured oil well completions, pneumatic pumps, and fugitive emissions from well sites and compressor stations;
- hydraulically fractured gas well completions and equipment leaks at natural gas processing plants; and
- pneumatic controllers, centrifugal compressors, and reciprocating compressors.
In addition to the updated NSPS, the EPA established a voluntary methane program for the oil and natural gas industry, encouraging companies to adopt technologies and practices to reduce methane emissions.
It is worth noting that the EPA recently proposed a two-year stay of certain requirements of the 2016 updates to the NSPS for the oil and natural gas industry. The stay would allow the EPA to reconsider portions of the NSPS updates after it received objections to certain requirements. The final decision regarding the proposed stay has yet to be published.
Expected Environmental Impacts
In its regulatory impact analysis of the proposed regulations, the Government of Canada indicated that the proposed regulations would result in a reduction of 12 megatonnes (Mt) of methane emissions between 2018 and 2035. This represents a reduction of 295 megatonnes of carbon dioxide equivalent (Mt CO2 eq.). At the same time, due to a minor increase in flaring activities, the proposed measures are expected to result in a slight increase of CO2 emissions.
The Government of Canada also estimates that the proposed regulations would result in a 41% reduction of methane emissions below 2012 levels by 2025, meeting Canada’s commitment made in March 2016’s Joint Statement. Measures included in the proposed regulations are expected to contribute an estimated 7% of Canada’s 2030 GHG emission reduction target by 2030.
Similarly, the U.S. government anticipates that its amendments to the NSPS will have positive impacts in the United States. According to its regulatory impact analysis, the U.S. government indicates that the amended NSPS – without taking into account the proposed two-year stay – are expected to reduce annual methane emissions by approximately 6.9 Mt CO2 eq. in 2020, and by 11 Mt CO2 eq. in 2025. The amended standards are expected to have positive impacts on the climate, air quality, ecosystems, and human health.
Oxford Institute for Energy Studies, Methane Emissions: from blind spot to spotlight, July 2017.
Natural Resources Canada, Natural Gas: A Primer, last modified November 2015.
Government of Canada, Actions to reduce emissions, last modified December 2017.
Author: Shawdy Shadmand, Library of Parliament