Federal regulations to reduce methane emissions in the oil and gas sector

Methane is the main component of the natural gas used to heat homes and power factories. It is also a potent greenhouse gas responsible for approximately 25 percent of the human-caused global warming today. Methane packs more than 70 times the warming power of carbon dioxide over a 20-year period.

Methane is released directly into the atmosphere during oil and gas exploration and production. Oil and gas facilities are the largest industrial emitters of methane in Canada; they release about half of total methane emissions.These releases occur during normal operation of equipment and from leaks.

To comply with Canada’s methane regulations, industry must adopt practices that prevent gas from being intentionally vented into the air during oil and gas production. The regulations are designed to help reduce the sector’s methane emissions by 40 to 45 percent by 2025, relative to 2012 emissions. That’s about the same as 20 megatonnes of carbon dioxide, comparable to taking five million cars off the road for a year.

Regulatory details

The federal regulations will reduce methane emissions and volatile organic compounds (VOCs) released into the air. VOCs are found with methane, and are known to have adverse health effects and contribute to smog formation.

The regulations are designed with innovation in mind and focus on emission outcomes. They are flexible and allow for new technology, updating equipment and adapting operating practices.

Where there is a higher potential to emit methane, the regulations will introduce operating and maintenance standards which will require industry to regularly inspect their equipment to ensure that no unintentional emissions are occurring. These preventative measures focus on two specific actions: a general inspection and repair program that requires industry to scan their systems every year for leaks or operating problems; and a compressor maintenance check-up to determine whether there is significant deterioration of the emission control system.

Further, these regulations will introduce limits to control venting.  They set facility-level restrictions on the amount of methane that can be vented. They also restrict emissions from pneumatic devices and require the elimination of temporary venting during well completions.

Environmental and economic impacts

Between 2018 and 2035, cumulative greenhouse gas emission reductions resulting from federal methane regulations are estimated to be roughly equal to 232 million tonnes of carbon dioxide equivalent. In addition, cumulative volatile organic compound (VOC) emission reductions are estimated to be 773 kt.

Cutting methane emissions helps reduce the global economic costs associated with climate change. Taking action on methane emissions is one of the lowest-cost actions Canada can take to reduce greenhouse gases.

The Government recognized the challenging market environment for the oil and gas sector. As a result, the regulations were designed to minimize costs, introduce additional flexibilities, and allow innovative solutions.

Costs to industry from these regulations include expenditures in new equipment, leak detection and repairs, as well as administrative costs. However, conserved natural gas resulting from the regulations help offset industry’s compliance costs.

These regulations will open up new markets for clean technology in the oil and gas sector. There are already more than 170 Canadian companies providing clean-technology services which will hire more workers as these regulations are phased in.

Backstopping provincial action

The federal methane regulations are a way to ensure that Canada’s objective of a 40 to 45 percent emission reduction from oil and gas will be achieved.

Provinces and territories can put in place methane regulations that make sense given their circumstances, provided they can clearly demonstrate emission reductions equivalent to, or more than, the federal measures. If not, the federal regulations will apply as a “backstop”. Environment and Climate Change Canada is open to discussing the establishment of equivalency agreements, under the Canadian Environmental Protection Act, 1999, with interested provinces.

While considering a provincial regulatory approach, the Government of Canada will

1. validate data reported to provinces;
2. review and assess provincial procedures for emission quantification; and
3. review and assess provincial requirements for measurement, monitoring, and reporting consistent with specific provincial regulatory approaches.

Contact information

Energy and Transportation Directorate
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, QC K1A 0H3
Email: methane-methane@ec.gc.ca