Canada Unveils Stricter Methane Regulations for Oil, Gas, Landfills

The Canadian government has announced new regulations aimed at significantly reducing methane emissions from the oil, gas, and landfill sectors. Federal Environment Minister Julie Dabrusin unveiled these measures in Burnaby on March 15, 2024, marking the first major environmental initiative under Prime Minister Mark Carney‘s administration.

Beginning in 2028, the regulations will provide onshore oil and gas producers with two primary options for methane reduction. The first mandates the prohibition of flaring excess natural gas, known as “venting,” and requires companies to implement an inspection schedule to identify and repair leaks, which are a major contributor to methane emissions. The second option allows operators to develop customized approaches to methane control, provided they meet emission thresholds aligned with international voluntary certification standards.

Dabrusin emphasized that these enhanced regulations are designed to reduce methane emissions while providing flexibility for operators. “These new enhanced oil and gas regulations are designed to significantly cut methane emissions,” she stated, highlighting the government’s commitment to environmental standards.

These regulations represent a shift in policy from the previous administration, which had rolled back various environmental protections. Carney’s government has already eliminated the consumer carbon tax and revised the industrial emissions cap. Dabrusin expressed optimism about collaborating with Alberta to tackle methane emissions effectively.

The new regulations are expected to face resistance from large oil and gas companies, which argue that they support the goal of reducing methane emissions by 75% from 2012 levels but prefer to determine their compliance methods. The government’s announcement also includes measures targeting methane emissions from landfills, which accounted for 17% of Canada’s methane emissions in 2023. Under the new guidelines, landfill operators will be required to monitor landfill surfaces and implement gas recovery systems.

According to the government’s estimates, the regulations will lead to a cumulative reduction of approximately 304 million tons of carbon dioxide equivalent by 2040. While this is a significant step towards mitigating climate change, it is anticipated that the regulations will slightly slow the growth of oil and gas production in British Columbia, Alberta, and Saskatchewan. Projections indicate a 0.2% decrease in production over the next decade compared to current estimates, with a corresponding impact on GDP of 0.01% by 2035.

The government has estimated the cost of compliance for the oil and gas industry at $48 per ton of carbon dioxide equivalent reduced. Officials argue this represents a cost-effective approach to achieving climate goals. They also assert that these costs will not be passed on to consumers, although the industry often contests such estimates, reflecting a historical divergence between Environment and Climate Change Canada and the oil and gas sector regarding compliance costs.

The implementation of these regulations marks a pivotal moment in Canada’s environmental policy, addressing critical issues related to methane emissions while balancing the interests of the oil and gas industry. As the government moves forward, the effectiveness of these measures will be closely monitored by environmental advocates and industry stakeholders alike.