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WHEREAS the Alberta Climate Leadership Plan states “Alberta will reduce methane emissions from oil and gas operations by 45% by 2025;” and
WHEREAS these new regulations may cause increased costs and layoffs of oil and gas personnel along with the closure of many marginal wells; and
WHEREAS this initiative may negatively affect municipal linear assessments, machinery and equipment assessments and add to the orphan well list;
THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties advocate to the Government of Alberta to permit an industry-led approach to a reduction in methane emissions.
The oil and gas sector accounts for 26% of Canada’s total greenhouse gas emissions, and it is Canada’s largest industrial emitter of methane. Cutting methane emissions is the most cost-effective way to accelerate greenhouse gas reductions.
Alberta will reduce methane emissions from oil and gas operations by 45% by 2025 using the following approaches:
Implementation of the new oil and gas methane standards will be led by the Alberta Energy Regulator, in collaboration with Alberta Energy and the Alberta Climate Change Office.
Alberta’s reduction target and timeline match the commitments announced by the Canadian and American federal governments while protecting economic competitiveness through alignment with North American environmental standards.
RMA has no active resolutions directly related to this issue.
The climate change impact of methane is significant—25 times greater than carbon dioxide over a 100-year period. Taking action to reduce significant emissions is a cost effective way to address climate change concerns. The Government of Alberta (GOA) is committed to reducing methane emissions in the oil and gas sector by 45 per cent from 2014 levels by 2025—at the lowest possible cost to industry. This will be achieved in the most economically efficient manner possible, while maintaining industry competitiveness.
Alberta Energy (AE) and the Alberta Energy Regulator (AER) continue to work on draft emissions reduction requirements. Government and the AER have been working with stakeholders from industry, environmental organizations, and academia to develop the plan to achieve emissions reduction targets. In developing draft directives, balanced consideration has been given to industry’s recommendations, and stakeholders are continuing to be engaged through the Methane Reduction Oversight Committee. There are a number of industry representatives on the committee, including the Canadian Association of Petroleum Producers, the Explorers and Producers Association of Canada, Canadian Natural, Cenovus, Shell, Husky, Imperial Oil and Encana. These companies have made valuable contributions by providing technical expertise on actions that could be taken to reduce methane emissions, while maintaining the competitiveness of the oil and gas industry.
Like industry, government understands the importance of a made-in-Alberta approach to meet the emissions reduction commitment. Alberta is resolved to maintain the regulatory lead on the file by ensuring provincial requirements meet the federal emissions reduction required by Environment and Climate Change Canada. The federal government has made clear its intention to regulate methane emissions to meet a methane reduction target similar to Alberta’s. Given that fact, it is necessary to work together to ensure that Alberta can meet its commitment with regulations held and administered in Alberta. Discussions are underway with federal counterparts to meet desired outcomes in a way that addresses Alberta’s unique operating conditions. Additionally, it is important Alberta is able to demonstrate our oil and gas industry’s environmental leadership. Ensuring this requires that Alberta advances a credible and verifiable approach to meeting emissions reduction obligations. Alberta cannot have this threatened by proposing a suite of regulatory actions that fails to meet the emissions reduction commitment.
Alberta’s upstream oil and gas industry is part of the socio-economic fabric of the province, and government recognizes the importance of the competitiveness of the energy sector. The GOA granted a five-year carbon levy exemption to support the industry transition to lower methane emissions, which is expected to provide support to industry in the form of avoided costs of approximately $2.8 billion between 2017 and 2023. Alberta also worked constructively with the federal government to avoid federal requirements that would have meant earlier regulatory impacts, which would have added cost and created immediate investment risks for industry. These have been important measures to maintain and contribute to the competitiveness of Alberta’s energy sector.
In addition, by advocating for a delayed implementation timeline for regulation, the GOA has created an opportunity for operators to capitalize on methane reduction actions through the Alberta Carbon Offset System for an extended period of time.
Alberta Environment and Parks
Alberta Environment and Parks has no further input beyond the response from Alberta Energy.
RMA recognizes the significance of methane as a greenhouse gas and the need to reduce methane emissions. On January 1, 2020, the Technology Innovation and Emissions Reduction (TIER) system was introduced to manage emissions from large industries. TIER encourages industrial facilities to develop innovative approaches to reduce emissions and invest in clean technology to stay competitive. Methane and nitrous oxide (N2O) emissions from either biomass combustion, fermentation or decomposition are included under TIER.
In addition, the Government of Alberta has reached a preliminary agreement with the Government of Canada over how methane emissions are regulated in the province and will achieve emissions reductions equivalent to the federal regulation by 2025. The preliminary equivalency deal required Alberta to make some changes to how methane emissions are measured and reported. This included lengthening the testing of gas production at heavy oil and crude bitumen batteries to 72 hours from 24 hours and remove exemptions for some forms of methane venting equipment. There has been no further information regarding what the Alberta framework will entail, but in a press conference on May 13, the Minister of Alberta Environment and Parks stated that large industries have consistently demonstrated that emissions reduction can be achieved through innovation and that the Government of Alberta will continue this approach. RMA assigns this resolution a status of Accepted in Principle and will monitor the progress of the TIER program and the methane reduction deal between the federal and Alberta government.