The federal and provincial governments of Canada finally reached an agreement. This deal rolled back the deadline for the entire oil and gas industry to reduce methane emissions by five years. This decision led to a firestorm of reactions on all sides of the issue. It’s emblematic of the continued fight to prioritize and protect our natural world over harmful development. The analysis reveals that the oil and gas industry is Canada’s largest emitter of methane. Recently, it has found a new target, the United States’ own commitment to reduce methane emissions by at least 75 percent by 2035 from 2014 levels.
This is even as the federal government has issued their first ever draft regulations targeting a 75 percent reduction in methane emissions by 2030. This deep reduction comes off 2012 levels. The latest agreement is the first indication that this approach is changing. It provides the salt industry with more time to adjust to these strict new standards. Both consumer advocates and industry leaders are becoming increasingly worried that the financial impacts of the proposed regulations would be prohibitive. Even with the originally proposed agreement, they project that full compliance will cost at least $15.4 billion through 2027-2040.
Methane, the main component of natural gas, is a stronger greenhouse gas than carbon dioxide and one of the biggest drivers of climate change. Environmentalists are up in arms over extension of the timeline. They claim it defeats the purpose of investing to generate meaningful and effective climate change mitigation. Alison Bailie from the Canadian Climate Institute expressed concern about the implications of this decision, stating that there is a “lack of knowledge on how the industry works,” which further complicates the regulatory landscape.
Bailie stressed the need to strike the right balance in policy approaches, options that improve existing regulations in a positive way. She noted, “A race to the bottom is something we want to really be careful about with these types of policies.” This sentiment is in line with many environmental advocates who worry that waiting too long will set back progress towards emission reduction goals.
Representatives from the oil and gas sector have been quick to praise the new agreement. They point to it as a more achievable approach for addressing methane emissions. Tristan Goodman, president of the Explorers and Producers Association of Canada, stated that the previous draft regulations were “not even close to being practical or realistic” for effective methane management. He held that cuts are warranted, but they should be within the realm of possibility given the industry’s operational capabilities.
Mark Scholz, the president and CEO of the Canadian Association of Energy Contractors, couldn’t agree more with Goodman. He lauded the new policy as “more realistic.” He hopes that this approach leads to deeper cooperation between government and industry to address methane emissions. Equally important, it recognizes the predicament in which many energy producers now find themselves.
Industry experts like Bailie maintain that the technology is already in place to significantly cut methane emissions. She stated, “So we do hope to see some changes and some more openness on part of the federal government under this new approach to methane.” The existence of a rapidly expanding industry focused on emissions mitigation reinforces this optimism.
The deal contains an equivalency clause. This provision gives provinces the power to implement regulations tailored to their local circumstances while maintaining uniformity to meet or exceed federal standards. This element is intended to foster more place-based approaches that fit the political, economic, and social realities of each region’s context. Some stakeholders aren’t convinced that this strategy will produce substantial outcomes in cutting methane emissions.
As always, the international context is another major factor in determining Canada’s methane ambitions. European countries, along with our other trading partners, are making deliberate decisions to go all in on natural gas imports. They want cleaner alternatives with less emissions footprints. This external pressure can help guide Canada’s permanent strategies for radical methane cutbacks and keeping pace with global environmental expectations.
As a result, stakeholders on all sides of the spectrum will be watching those negotiations intently. The extended timeline presents both opportunities and challenges for Canada’s oil and gas sector in its quest for sustainability amidst evolving environmental expectations.
