Ottawa Unveils Stricter Methane Regulations for Oil, Gas, Landfills

The federal government of Canada announced new regulations aimed at significantly reducing methane emissions from the oil and gas and landfill sectors. This initiative, unveiled by Federal Environment Minister Julie Dabrusin in Burnaby on October 17, 2023, marks the first step in a series of stringent environmental policies under the leadership of Prime Minister Mark Carney.

These regulations, set to be phased in starting in 2028, will impose two primary options for onshore oil and gas producers to mitigate methane emissions. The first option includes a ban on the practice of venting, which involves burning off excess natural gas, and mandates that companies establish a schedule for inspecting and repairing leaks—a major source of methane emissions. The second option allows companies to devise their own strategies for controlling methane, provided they meet emission standards comparable to those of leading international voluntary certification programs.

Dabrusin emphasized the flexibility offered to operators, stating, “These new enhanced oil and gas regulations are designed to significantly cut methane emissions while giving operators flexibility in how they comply.” However, industry representatives have previously contended that viable alternative approaches to meet these standards are not yet available.

The announcement follows a series of rollbacks of environmental measures introduced by former Prime Minister Justin Trudeau. Carney’s government has departed from many of Trudeau’s policies, including the elimination of the consumer carbon tax and a weakened industrial emissions cap. Dabrusin expressed optimism about collaborating with the Alberta government to tackle methane emissions effectively.

The new regulations also target methane emissions from landfills, which accounted for 17 percent of Canada’s methane emissions in 2023. Landfill owners and operators will be required to monitor the landfill surface, gas recovery wells, and equipment used to manage methane emissions, as outlined in the government’s press release.

According to the government, these measures are projected to substantially lower methane emissions, contributing to a cumulative reduction of 304 million tons of carbon dioxide equivalent by 2040. Nonetheless, the regulations are expected to slightly hinder the anticipated growth of Canada’s oil and gas production in British Columbia, Alberta, and Saskatchewan, as well as impacting the national GDP. Estimates suggest production could be reduced by approximately 0.2 percent—equating to around 500 petajoules—over the next decade in comparison to current forecasts. Additionally, GDP is expected to decline by 0.01 percent by 2035.

The government argues that the enhanced methane regulations will ensure the competitiveness of Canada’s oil and gas sector as the market increasingly shifts toward lower-emission sources. The estimated cost of compliance for the oil and gas industry is projected at $48 per tonne of carbon dioxide equivalent reduced. Officials assert that this represents one of the most cost-effective options for making significant progress toward climate goals. They also claim that these costs will not be passed on to consumers, although there is skepticism within the industry regarding these figures.

As Canada embarks on this new regulatory path, the outcome will depend on the cooperation of industry stakeholders and their ability to adapt to the evolving environmental landscape.