+ RMA Rural Municipalities
of Alberta

Resolution 10-17F

Provincial Industry-led Methane Flaring Strategy

Date:
November 15, 2017
Expiry Date:
December 1, 2020
Active Status:
Active
Sponsors:
MD of Greenview
District:
4 - Northern
Year:
2017
Convention:
Fall
Category:
Environment
Status:
Intent Not Met
Vote Results:
Carried
Preamble:

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;

Operative Clause:

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.

Member Background:

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:

  1. Applying new emissions design standards to new Alberta facilities. Applying standards at the planning stage will be less expensive.
  2. Improving measurement and reporting of methane emissions, as well as leak detection and repair requirements.
  3. Developing a joint initiative on methane reduction and verification for existing facilities, and backstopping this with regulated standards that take effect in 2020, to ensure the 2025 target is met. This initiative will include Alberta industry, environmental groups and Indigenous communities.

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 Background:

RMA has no active resolutions directly related to this issue.

Government Response:

Alberta Energy

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.

Development:

RMA recognizes the significance of methane as a greenhouse gas and the need to reduce methane emissions. RMA appreciates the Government of Alberta’s response which highlights that the targets outlined by the Government of Alberta will be met in a manner that imposes the lowest cost on industry. RMA is also encouraged that the formulation of the emissions reduction requirements are supported by industry representatives; however, the intent of the resolution requests that an “industry-led approach” be used to develop the methane emissions reduction requirements, which is not considered in the government response. As such, this resolution is assigned a status of Intent Not Met.

Provincial Ministries:
Energy,
Environment and Parks
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