Pro­duc­ers call for loos­en­ing of meth­ane rules

Gov­ern­ment’s pro­posed pol­icy would be too costly for in­dus­try: lobby group

Calgary Herald - - FINANCIAL POST - JESSE SNY­DER

The Cana­dian As­so­ci­a­tion of Pe­tro­leum Pro­duc­ers on Mon­day rec­om­mended a loose ned ap­proach to reg­u­lat­ing meth­ane emis­sions from oil and gas sites, just as Al­berta pre­pares to ta­ble its draft poli­cies aimed at lim­it­ing emis­sions of the gas.

In a list of rec­om­men­da­tions, CAPP called for a so-called “fleet av­er­age” ap­proach to meet in­dus­try’s meth­ane tar­gets, which would es­sen­tially judge meth­ane emis­sions lev­els across the in­dus­try rather than on a site-by-site ba­sis.

In­dus­try has long claimed that it should be al­lowed to cut the cheap­est and sim­plest meth­ane emis­sions first, and then move onto larger and more un­wieldy sources of the pol­lu­tant in or­der to meet its tar­gets in a cost-ef­fec­tive way.

“This is a core piece of what we’re ask­ing for,” said Tim McMil­lan, the pres­i­dent and CEO of CAPP.

Meth­ane is about 100-times more po­tent as a green­house gas than car­bon diox­ide, ac­cord­ing to sci­en­tists, although it does not linger nearly as long in the at­mos­phere.

It is of­ten emit­ted through flaring or in leaks from pumps, valves and other in­fras­truc­ture on oil and gas sites.

CAPP’s rec­om­men­da­tions come as Cana­dian gov­ern­ments in­creas­ingly tighten reg­u­la­tions around meth­ane emis­sions.

Al­berta could re­lease its draft meth­ane reg­u­la­tions as early as Wed­nes­day, sev­eral peo­ple said Mon­day. Gov­ern­ment of­fi­cials said the reg­u­la­tions would be tabled in the next few days.

The fed­eral gov­ern­ment re­leased its own draft pro­pos­als in May of this year, and is cur­rently in con­sul­ta­tions with stake­hold­ers over the pol­icy.

McMil­lan warned against the kind of “blunt in­stru­ment” pol­icy pro­posed un­der En­vi­ron­ment Min­is­ter Cather­ine McKenna, which he ar­gues would be too costly for in­dus­try amid a years-long slump in com­mod­ity prices.

“Ot­tawa’s draft pro­pos­als fall into the very pre­scrip­tive cat­e­gory of pol­i­cy­mak­ing,” he said.

In March 2016 Prime Min­is­ter Justin Trudeau and for­mer U.S. pres­i­dent Barack Obama agreed to jointly cut meth­ane emis­sions from oil and gas by 40 to 45 per cent from 2012 lev­els by 2025.

Al­berta, for its part, has set a tar­getto re­duce meth­ane emis­sions 45 per cent from 2014 lev­els by 2025. Un­der Ot­tawa’s pol­icy, prov­inces will have to sub­mit their own draft pro­pos­als for meth­ane reg­u­la­tions be­fore en­ter­ing into dis­cus­sions with the fed­eral gov­ern­ment over which pro­pos­als will ul­ti­mately be im­ple­mented. The fed­eral en­vi­ron­ment min­istry ex­pects to fi­nal­ize its poli­cies in the spring of 2018.

The fed­eral gov­ern­ment’s draft pro­pos­als pushed back the start­date for meth­ane reg­u­la­tions from 2018 back to 2020, another key rec­om­men­da­tion by in­dus­try.

En­vi­ron­men­tal re­searchers say that judg­ing col­lec­tive emis­sions rather than site-by-site would only be use­ful with bet­ter mon­i­tor­ing of meth­ane emis­sions in place. Cur­rently, mea­sure­ments of just how much meth­ane is emit­ted by in­dus­try vary widely.

“It isn’t a bad so­lu­tion when you have an al­lot­ted, real mea­sure­ment of meth­ane emis­sions,” said Dun­can Kenyon, a re­searcher at the Pem­bina In­sti­tute based in Ed­mon­ton.

But he said that the lack of mon­i­tor­ing is es­pe­cially prob­lem­atic in com­pli­cated fa­cil­i­ties with hun­dreds of valves and pumps, “when you’re deal­ing with po­ten­tially 100 emis­sions points on a site.”

Pem­bina and oth­ers have called for a more pre­scribed ap­proach to meth­ane reg­u­la­tions.

A less pre­scribed ap­proach to emis­sions also gives room to fo­cus only on smaller emis­sions sources, rather than in­fras­truc­ture that could be emit­ting higher vol­umes of meth­ane, par­tic­u­larly tank farms and flare stacks, where raw nat­u­ral gas is burned off be­fore be­ing emit­ted into the at­mos­phere.

“Those are the sites where you re­ally want to go and crack down,” said Keith Ste­wart with Green­peace Canada in Toronto.

CAPP has been in dis­cus­sions for months with the pro­vin­cial reg­u­la­tor and Al­berta gov­ern­ment of­fi­cials about craft­ing meth­ane pol­icy.

The lobby group also rec­om­mended on Mon­day an ap­proach that in­cen­tivizes in­vest­ment in cleaner tech­nol­ogy while cut­ting emis­sions from leaks and flaring sooner.

The as­so­ci­a­tion said the meth­ane regime it pro­posed would cost in­dus­try roughly $700 mil­lion over eight years, but would cre­ate “the most com­pet­i­tive ap­proach” to meet­ing tar­gets.

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