PM offers $750M to oil companies to slash methane emissions

Some environmental groups say answer lies in stronger regulations

The federal government is offering $750 million in interest-free loans to help oil and gas companies slash methane emissions, as a group of environmental organizations says Canada is not doing enough to reduce the sector’s high production of the powerful greenhouse gas.

Natural Resources Minister Seamus O’Regan said Thursday that the new program — first promised by Prime Minister Justin Trudeau in April — will help Canada continue to sell oil while it aims to achieve “net zero” carbon emissions by 2050. It will boost efforts by oil and gas companies to reduce operational emissions, keep jobs and strengthen competitiveness “for decades to come,” he said.

O’Regan could not say what amount of emissions’ reductions is expected from the $750-million program, because that will depend on proposals for funding to come from the sector. The loans “may be” forgiven if companies eliminate their methane emissions, O’Regan added, but there is only a requirement that funds are used to reduce them.

After delaying new methane regulations for the oil and gas industry by three years, the federal government is preparing to implement new rules with the aim of reducing emissions of this potent greenhouse gas from the sector by 40 to 45 per cent below 2012 levels by 2025.

“You want to get as close to elimination as you possibly can,” O’Regan said during a virtual press conference from Newfoundland on Thursday.

“In some instances, companies will feel that they are able to eliminate, and that’s great. In others they may not be able to completely eliminate,” he said. “So while we want to have the incentive there to try, not everybody is able to do it and we have to offer that flexibility.” O’Regan’s announcement came hours after a group of environmental organizations — the Clean Air Task Force, David Suzuki Foundation and Environmental Defence — issued a joint call for Ottawa to strengthen incoming methane regulations that are designed to reduce the level of emissions of a gas that is 84 times more potent than carbon dioxide.

Dale Marshall, the national climate program manager with Environmental Defence, said his group recently teamed up with the Pembina Institute to conclude the current regulations will only slash methane emissions from the oil and gas sector by 29 per cent, well short of the government’s goal of at least 40 per cent by 2025.

The Pembina Institute endorsed the new $750 million loan fund Thursday, with senior analyst Jan Gorski stating during O’Regan’s press conference that Canadian technology already exists to eliminate methane emissions from the oil and gas sector and that the program “points us in the right direction.”

But of particular concern to Marshall is pending deals to allow Alberta and Saskatchewan — hubs of oil and gas in Canada — to set their own regulations for methane, which Environmental Defence and other groups say shows the federal government’s benchmarks for reductions are too weak.

In the wake of decision to allow Ontario’s carbon pricing system for heavy industry to replace the federal scheme that Ottawa admits is more stringent, Marshall said he fears the Liberal government will weaken Canada’s climate actions to reduce conflicts with the provinces.

“It seems like, over and over again, we’re seeing the federal government not standing up to provinces that want to do less on climate change. And that’s a huge problem,” Marshall said.

“To be failing on methane,” which is seen as an effective way to slash overall emissions because of its potency, “is really disastrous, because it means we’re going to have to get emissions somewhere else,” he said.

Methane emissions make up 13 per cent of Canada’s total greenhouse gas output, and the oil and gas sector is its largest source, according to government data.

In an emailed response to questions from the Star, federal Environment Minister Jonathan Wilkinson said the government recognizes that tackling methane emissions is one of the “most cost-effective approaches” to reducing greenhouse gas output.

The Liberal government has pledged to exceed the overall greenhouse gas targets set by former prime minister Stephen Harper, and committed to under the international Paris Agreement, which were to reduce Canada’s emissions to 30 per cent below 2005 levels by 2030. Many climate activists say this target is insufficient to fulfil Canada’s share of the global fight to slow climate change, and the government’s own projections current policies — both planned and already in place — aren’t enough to meet it.

The government has pledged to outline its plan to increase Canada’s efforts to slash emissions over the course of this fall.