A preliminary equivalency agreement with the federal government is 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.
Without this agreement, federal rules would remain in effect in the province indefinitely, meaning producers would need to adhere to two sets of overlapping methane reduction rules. Now, the process to stand down federal regulations in Alberta can begin, allowing the province to build on an already excellent history of reducing emissions utilizing local expertise.
The preliminary agreement follows several years of negotiations and confirms Alberta’s regulatory framework will achieve the same emissions reductions as the federal regulation by 2025. 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 means industry can achieve emissions reductions in a more cost-effective manner and with more certainty around the regulatory process.
“This agreement represents further proof that environmental and economic outcomes go hand in hand. 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. Our large industries have consistently demonstrated that emissions reduction can be achieved through innovation and we will continue to support this approach.”
Jason Nixon, Minister of Environment and Parks
“As we make plans for economic recovery and set a course for our province’s future prosperity, it is critical for industry to have the regulatory certainty needed to operate and further invest in Alberta. This preliminary agreement will give Alberta the ability to achieve methane emission reductions through one of the strongest regulatory systems in the world.”
Sonya Savage, Minister of Energy
“The preliminary agreement is good news for Alberta’s oil and natural gas producers. It will reduce the administrative burden on companies and give them a single framework for tackling methane emissions when the agreement is finalized. 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. CAPP believes provincial regulators are best positioned to ensure efficient and effective regulation of methane emissions. We also see intergovernmental collaboration to reduce regulatory duplication as critical to both environmental performance and economic recovery. Our country has some of the most stringent regulatory standards for methane emissions and our upstream oil and natural gas industry remains committed to achieving the federal methane emissions reduction targets.”Tim McMillan, president and CEO, Canadian Association of Petroleum Producers
“We’re very pleased to see the Government of Alberta is working with the federal government to streamline regulations, especially now when administrative and financial resources are at all-time lows. 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.”Mark A. Scholz, president & CEO, Canadian Association of Oilwell Drilling Contractors
“PSAC is pleased that a preliminary equivalency agreement on methane has been reached. Reducing the burden of compliance given the difficulty of complying with two sets of regulations is critical to controlling costs in this globally competitive industry. The oilfield services sector that PSAC represents is instrumental in developing new technologies and innovation. We look forward to continuing to work with governments on driving the innovation that creates urgently needed jobs for the oilfield services sector and to facilitate continued positive environmental outcomes that demonstrate Canada’s commitment to responsible energy development.”Elizabeth Aquin, president and CEO, Petroleum Services Association of Canada
The preliminary agreement will require a legislated review process and approval by federal cabinet. This includes Environment and Climate Change Canada (ECCC) 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.
During this review period, the federal regulations will remain in effect in Alberta. Once the order in council is approved, the federal regulation will no longer apply in the province.
- On Jan. 1, 2020, both federal and provincial rules took effect in Alberta.
- To align with details of the draft equivalency agreement, Alberta has made revisions to the Alberta Energy Regulator’s Directives 060 and 017.
- Alberta’s Methane Emissions Reduction Regulation provides residents the right to request an investigation if they believe a company is not complying with methane reduction requirements.
- 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 Alberta approach is expected to reduce methane emissions by 45 per cent from 2014 levels by 2025.
- Methane’s environmental impact is 25 times greater than carbon dioxide over a 100-year period.
- Work with the federal government also continues on Canada’s Clean Fuel Standard. The federal government has pushed back implementation by six months due to COVID-19, allowing opportunities to further explore regulatory impacts.