Oil and gas producers are breaking Alberta’s methane rules

Alberta’s energy watchdog has reported dozens of violations as it takes on regulating the oil and gas industry’s methane pollution.

Companies that emit methane, a greenhouse gas furthering the climate crisis, have missed deadlines to submit data and blown inspections carried out by the Alberta Energy Regulator, it outlined in a report published this year, the first of its kind.

The report is from January 2022, but details about myriad obstacles the regulator encountered in trying to enforce its rules were not mentioned in the provincial government’s press release about it at the time.

Instead, the government chose to highlight its progress toward meeting its methane emissions reduction target — despite the regulator admitting that these reductions had mostly occurred prior to the province’s new methane rules coming into effect in 2020.

Alberta Energy Regulator aiming for ‘education’ of oil and gas industry

The provincial regulator is required to produce this report annually as a result of an October 2020 agreement with the federal government to accept Alberta’s methane rules as “equivalent” to Canada’s national methane pollution standards.

Under the agreement, Alberta must compile data on the facilities subject to the rules, as well as information like the permits it issued, the activities it took to check compliance, the enforcement measures it carried out and the overall effectiveness of its rules.

The regulator’s approach to ensuring compliance with the rules involves a component it calls “education,” which means raising awareness of the requirements placed on oil and gas companies, and encouraging them to voluntarily meet their obligations before having to resort to enforcement.

In February 2021, the regulator sent out 450 notices, what it called “report cards,” to all oil and gas operators that were active in 2019 — the first mandatory reporting year under the provincial rules. “Operators” is a term defined in provincial law that means either the person who actually operates an oil and gas facility or project, or the person who has been approved to oversee them.

Out of the 450 notices, 120 of them “noted missing reports, insufficient reporting or suspected inaccurate reporting,” the report stated. The regulator considered these notices to be part of its education of industry, hoping that operators take the hint and make fixes voluntarily.

The regulator also sent 43 notices to operators who missed the first annual methane emissions report deadline of June 1, 2020, the report indicated. It then sent 12 letters that followed up on operators who were not addressing the original notices.

The report said the regulator was considering “further enforcement actions,” but a spokesperson told The Narwhal that in this case, “escalation was not required” as the companies involved addressed the issue.

Inspectors trained by the regulator carried out 266 methane inspections in Alberta in 2020, the report indicated, meeting with operators at oil and gas facilities and reviewing the requirements that apply to their operations. The regulator said it prioritized giving an “educational inspection” as their first methane inspection.

Out of these 266 inspections, 32 “were considered to have unsatisfactory outcomes, meaning the inspection resulted in required follow-up work for the duty holders,” the report stated. It said two facilities were suspended due to the methane inspections. The regulator’s spokesperson said these sites have since returned to active status.

Restrictions around the COVID-19 pandemic limited the regulator’s ability to send officials on site or into indoor environments, it wrote, and independent inspections didn’t start until Aug. 11 that year.

The federal environment department told The Narwhal that it continues to work closely with Alberta and will consider pulling out of the methane equivalency agreement if it identifies a “serious increase in violations.”

Alberta Energy Regulator staff already concerned about enforceability of new rules

The revelations in the report build on earlier fears within the regulator about whether it would be able to enforce its own methane rules. Some staffers warned in leaked correspondence, obtained by The Narwhal, that intense fossil fuel industry lobbying had weakened the rules as applied to some of the dirtiest facilities.

Oil and gas company Canadian Natural Resources Limited and the fossil fuel industry group Canadian Association of Petroleum Producers led some of these lobbying efforts, eventually getting changes they requested in the final rules adopted in December 2018.

The issue is particularly critical at a time when Canada is trying to meet its climate goals and slash its greenhouse gas emissions. Cutting methane from the oil and gas sector is the most cost-effective way of lowering carbon pollution, according to the International Energy Agency.

The agency’s February 2022 methane analysis found that the recent high prices for natural gas mean there is now “no net cost” to implement almost all of the options to cut methane from fossil fuel operations worldwide. These options include detecting and repairing equipment leaks, retrofitting facilities with emissions control devices and upgrading aging components, according to the agency.

The cost of implementing these measures is “less than the market value of the additional gas that is captured,” it wrote, meaning at today’s retail gas prices, companies can profit off capturing and selling methane.

“Such a strong alignment of cost, reputational and environmental considerations should push the oil and gas sector to lead the way with methane emissions reductions,” the organization wrote.

The federal government has offered up to $10 billion in subsidies for oil and gas companies that lobbied for taxpayer money to pay for carbon capture and storage projects — a technology that has not yet been deployed across the industry on a massive scale.