Frequently Asked Questions: Canada-U.S. Joint Action to Reduce Methane Emissions
Backgrounder
General
1. Why is methane important?
- Methane is a potent greenhouse gas and short-lived climate pollutant with a global warming potential 25 times greater than carbon dioxide.
- In 2013, 15 percent of Canada’s greenhouse gas emissions were from methane.
- The oil and gas sector is a key source of methane emissions in Canada, the U.S. and around the world.
- The International Energy Agency identified minimizing methane releases from upstream oil and gas production as one of five key opportunities to keep global temperature rise below two degrees Celsius, a level that the nations of the world committed themselves to remain “well below” in the historic Paris Agreement last December.
2. What are Canada’s methane emissions from the oil and gas sector?
- In 2013, the oil and gas sector contributed 43 percent (or 46 megatonnes of carbon dioxide equivalent) of Canada’s methane emissions.
- The breakdown of 2013 methane emissions by oil and gas subsector is approximately:
- 93% from natural gas production and processing, and oil production (including oil sands);
- 5% from natural gas transmission and storage; and
- 2% from the gas distribution network.
- While other subsectors, such as refining and oil distribution, are important contributors to carbon dioxide and volatile organic compound emissions, they have minimal to no methane emissions.
Joint action
3. Why is Canada taking joint action with the U.S.?
- The Canadian and U.S. energy sectors are already highly integrated. Many U.S. and Canadian companies work in both the Canadian and U.S. marketplace. A joint approach on methane makes sense for this reason.
- Canada and the U.S. have a long and successful history of working together to reduce air emissions. This cooperation has ranged from efforts to reduce transboundary air pollution contributing to acid rain and smog, to harmonizing vehicle emissions regulations.
- Building on this success, Canada and the U.S. commit to taking action to address methane emissions from the oil and gas sector, a key source of greenhouse gas emissions globally.
4. Why are we taking action on methane emissions?
- Reducing methane emissions is a key opportunity to make sizeable greenhouse gas reductions cost-effectively, and an important step on the path towards achieving Canada’s climate change goals.
- Action to address methane emissions will also reduce emissions of volatile organic compounds and harmful toxic air pollutants, which can cause serious health problems.
5. What commitments are being made?
- Canada and the U.S. commit to reducing methane emissions from the oil and gas sector by 40-45 per cent below 2012 levels by 2025.
- In order to achieve this ambitious target, Canada and the U.S. commit to publishing their respective federal regulations as soon as possible, and to working collaboratively on programs, policies and strategies to reduce oil and gas methane emissions.
- Canada and the U.S. will also work together to improve methane data collection, emissions quantification and transparency of emissions reporting in North America. Knowledge of cost-effective methane reduction technologies and practices will be shared.
6. What other complementary steps will you take to reduce methane?
- We will advance emissions reduction opportunities through the G20 and will encourage private sector commitments to reduce methane emissions domestically and internationally, including through voluntary efforts such as the Climate and Clean Air Coalition’s Oil and Gas Methane Partnership.
- In addition, Canada and the U.S. will jointly endorse the World Bank’s Zero Routine Flaring by 2030 initiative.
Federal methane regulations
7. Why is the federal government developing methane regulations for the oil and gas sector?
- The oil and gas sector is a major source of methane emissions in Canada. Methane is a potent greenhouse gas and a short-lived climate pollutant with a global warming potential 25 times greater than carbon dioxide.
- The federal government will introduce regulations to reduce methane emissions from the oil and gas sector in order to make progress towards our international climate change commitments.
- We will work with provinces and territories, Indigenous Peoples, industry, environmental organizations, and the public on developing these regulations and identifying other measures to address methane emissions.
- These regulations will be critical to achieving our target of reducing methane emissions from the oil and gas sector by 40-45 percent below 2012 levels by 2025.
8. What will these regulations achieve?
- Federal regulations will achieve significant reductions of greenhouse gases from the oil and gas sector and create clear and consistent requirements across the country.
- Regulating methane emissions will also reduce emissions of volatile organic compounds and harmful toxic air pollutants, which can cause serious health problems.
- Methane reductions can often be achieved with a low net cost to oil and gas companies, as methane, which is the primary component of natural gas, is a marketable product, and captured gas can be sold or used.
9. Given the low price of oil, will these regulations place additional costs on the oil and gas industry?
- Methane is the lowest-cost emissions-reduction opportunity in the oil and gas sector.
- On average, greenhouse gas reductions can be secured in Canada for as little as $2.76 per tonne of carbon dioxide equivalent.
- Methane, being the main component of natural gas, is a marketable product that can be captured, conserved and sold by oil and gas companies.
- Proven, cost-effective technologies and practices to reduce methane loss in the oil and gas sector are available today, and often have short payback periods—even in markets where gas prices are currently low.
- A study released last year by the Rhodium Group found that $30 billion of revenue and 3.6 trillion cubic feet of natural gas is lost globally each year from oil and gas production and distribution—an amount nearly equivalent to the total production in 2012 of Norway, the world’s seventh-largest producer.
10. What would the federal methane regulations cover?
- The federal regulations would address venting and fugitive emissions of methane from existing and new oil and gas facilities that are responsible for the extraction, production and initial processing of crude oil and the processing of natural gas.
- For example, the regulations would apply to oil and gas wells and batteries, natural gas processing plants, compressor stations, and supporting pipelines.
- The Canadian requirements would, at a minimum, cover emissions from the same sources subject to current and proposed U.S. regulatory requirements that reduce methane from the oil and gas sector.
11. Why is the Government of Canada regulating existing and new sources of methane in the oil and gas sector?
- Methane is a potent greenhouse gas with a global warming potential 25 times that of carbon dioxide.
- The oil and gas sector is the single biggest emitter of methane in Canada, contributing 43 percent of total methane emissions.
- Existing facilities will continue to emit methane for several years, leaving a significant regulatory gap if not addressed.
- In order to make progress in reducing the greenhouse gas footprint of the oil and gas sector, Canada must address methane emissions from existing as well as new facilities.
12. Would the oil sands be covered by the regulations?
- Yes, the federal methane regulations would apply to oil sands production facilities.
13. Would crude oil and natural gas transportation pipelines be covered by the regulations?
- Crude oil and natural gas transportation sources in the production and processing parts of the sector would be covered as well as, where applicable, similar sources at compressor stations in the transmission sector.
- However, emission reductions in the transmission sector would be minor due to more modern equipment and early implementation of leak detection and repair programs in Canada.
- Given the very minimal amount of methane emissions, distribution pipelines would not be included in Canada’s regulations.
14. Would offshore oil and gas facilities be covered by the regulations?
- Offshore oil and gas facilities will be subject to the same requirements as all other oil and gas facilities.
- Environment and Climate Change Canada will work with the offshore boards and provincial governments to determine how best to implement these requirements.
15. Can there be an equivalency agreement between the federal government and one or more provincial governments with regard to the federal methane regulations?
- Yes, once final federal regulations are in place, the federal government will be open to equivalency agreements with interested provincial governments.
16. Were provinces, territories, Indigenous Peoples and stakeholders, including industry and non-governmental organizations, consulted on today's announcement?
- In the summer of 2015, Environment and Climate Change Canada issued a discussion paper on aligning with the U.S. on regulations to reduce methane in the oil and gas sector to stakeholders as well as provinces and territories for comment. Several groups provided written feedback.
- A series of meetings were also held with these groups to discuss the potential for federal regulation of methane in alignment with the U.S.
17. Why is the Government of Canada committing to publish proposed regulations by early 2017?
- The government intends to consult Canadians, provinces and territories, Indigenous Peoples, industry, and non-governmental organizations on the details of the regulatory approach.
- The publication of proposed regulations will provide interested parties with details of the government's proposed approach and will enable them to submit written comments on the proposed regulatory package.
- These comments will inform the development of final regulations.
- Methane reductions are among the lowest-cost greenhouse gas measures available in the oil and gas sector, and moving forward expeditiously on measures in this area can make an important contribution to the government's climate change objectives.
18. What impact will federal regulations have on Canadian greenhouse gas emissions?
- Achieving a 40-45 percent reduction by 2025 is the equivalent of reducing 18-20 megatonnes of greenhouse gases per year.
- This reduction is equivalent to 3.8-4.2 million passenger vehicles not being driven in a given year.
Emissions quantification
19. Why are Canada and the U.S. agreeing to work together to improve data collection, emissions quantification and reporting?
- The Government of Canada is committed to improving the quality of publicly available data in Canada. We are setting a higher bar for openness and transparency in government.
- By working together with the U.S., we can achieve greater progress on improving our understanding of methane emission sources and work towards the development of consistent approaches to quantification and reporting.
- Methane emissions from the oil and gas sector can be challenging to quantify due to the large number and variety of emissions points. Gaining a better picture of greenhouse gas emissions, including methane, in both countries will allow us to better measure our progress towards meeting our climate change goals and identify areas where further action may be required.
Ensuring results
20. What steps are being taken to ensure that progress is made in the coming years?
- Canada and the U.S. will report annually on progress in this area to the existing Canada-United States Air Quality Committee.
- Federal regulations will include provisions for regular compliance reporting.
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Hon. Catherine McKenna Environment and Climate Change Canada Nature and Environment