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Environmental organizations, labour groups and technology companies are calling on Alberta Premier Rachel Notley to take decisive action on methane emissions from oil and gas activities.
Methane is a particularly potent greenhouse gas, with 25 times the global warming potential as carbon dioxide over a 100-year period. Methane is a huge component of natural gas, so Alberta generates a lot of the stuff because it gets vented in all sorts of ways once you start digging around beneath the earth’s surface.
“Alberta can lead the country’s methane reduction efforts and keep good job opportunities in the oil and gas sector from going to waste,” the letter reads.
Sounds nice, right?
Well, as alluded to in the letter, the proposed federal regulations are in need of some serious strengthening (which we’ll get into in a sec).
“Alberta can have the greatest impact on methane reductions,” said Jamie Kirkpatrick, program manager at Blue Green Alliance, in an interview with DeSmog Canada. “For them to come out strong means that we’re going to achieve our targets.”
Here are five things the Alberta Energy Regulator should consider while crafting its own set of provincial regulations.
The Pan-Canadian Framework included a commitment to reduce methane emissions from the oil and gas sector by 40 to 45 per cent from 2012 levels by 2025.
Yet under immense pressure from industry, the federal government decided to delay the implementation of its methane regulations. The original plan was to introduce some of the regulations in 2018, with the remainder in 2020. Now, that’s been pushed back three years to between 2020 and 2023, saving industry around $1 billion over a 17-year period.
According to Environmental Defence, that will result in the unnecessary release of a massive 55 megatonnes in methane emissions. The Canadian government has calculated that the “social cost of methane” is $1,165/tonne in 2012 dollars.
Alberta can accelerate the implementation of regulations that will dramatically cut methane emissions. It doesn’t necessarily have to return to the original dates of 2018 and 2020, but the sooner the better.
Duncan Kenyon, director of the Pembina Institute’s responsible fossil fuels program, said in an interview with DeSmog Canada that a huge problem with methane emissions is that industry is still allowed to intentionally leak natural gas — of which methane is the main component — in a process also known as “venting.”
He said that venting is actually most often done by oil producers, as any gas that comes up is seen as “worthless” compared to petroleum.
“If you have a high amount of intentional leaking going on, there is almost no way to differentiate between intentional and unintentional leaking when you visit,” Kenyon said. “Basically, what it does is give industry a huge out for their unintentional leaking.”
To be sure, there are a few policies in Alberta that attempt to reduce venting. Most have to do with an economic test: if it’s not profitable for a company to capture and ship the gas to market, then it’s allowed to “flare” it into the atmosphere.
Kenyon said that flaring — a form of controlled burning that converts methane into carbon dioxide — is a marginal improvement over venting on the climate front, but less beneficial from an air quality perspective. He added that economic test is determined by industry and “everyone knows how gameable that is.”
In other words, industry is currently allowed to release or burn off massive amounts of gas into the atmosphere, making it very difficult to ascertain how much methane is being consistently released (operators obviously won’t vent gas when inspectors are on site).
That’s why a key demand in Environmental Defence’s recent report is to “eliminate routine venting” and “not permit new routine flaring, and phase-out existing flaring practices.”
The federal government’s draft regulations won’t prohibit current practices, and won’t even begin to restrict them until 2023. While it will cost industry around $1.2 billion between 2018 and 2035, the reduction in venting will result in $5.4 billion in savings from climate change damages.
The new Alberta regulations could seriously raise the bar by accelerating a full ban on venting and flaring.
— DeSmog Canada (@DeSmogCanada) August 1, 2017
Then there’s the issue of “fugitive emissions” or legitimately unintentional leaks.
Kenyon said that “right now, the option for unintentional is to get on site and look for your leaks. The solution, nine times out of ten, is simply tightening some bolts and fixing some things while you’re there.”
The proposed federal regulations do include a requirement for “leak detection and repair” by a professional using an “optical gas imaging” camera to take place three times per year, starting in 2020.
That’s certainly a good start.
But as pointed out by Environmental Defence, states including Colorado, Wyoming and California already require that inspections happen four times per year. The logic is quite simple: the more inspections, the more methane leaks identified and dealt with. Industry isn’t exactly a fan of the idea, even though it will cost them a mere $374 million over 15 years for a massive $3 billion in societal savings from greenhouse gas damages.
“They’re definitely opposing the idea of having people drive out there,” Kenyon said. “I think they understand the risk with actually catching the leaks is that we’ll actually start to realize how big a problem we have.”
But if done right, Kenyon suggested that within two to three years there will be enough of a marketplace that developing technologies for on-site detection will be deployable. That means there won’t be any humans involved in the actual monitoring: detectors will go off if there’s a suspected fugitive emission, and people will visit the site to repair it.
In the meantime, it’s critical that monitoring and enforcement is dramatically expanded in order to create a culture of compliance. Alberta could lead the way by increasing the number of times that a site is visited every year, and by preparing companies for the new technologies to come.
One of the stranger aspects of the federal regulations is that they will only apply to around 20 per cent of crude oil facilities in Canada, which the government estimates are responsible for 75 per cent of vented emissions.
There are a wide range of other exceptions that have been proposed: the government won’t require inspections during winter, operators can wait more than 30 days to repair the leak if it’s not possible without shutting down equipment and only facilities that vent more than 40,000 square metres of gas per year need to comply with the already weak regulations.
Single wellheads and many heavy oil facilities are also exempt from the leak detection and repair program. These are all pretty stunning omissions for a government ostensibly concerned about climate change.
To reiterate: methane boasts 25 times the global warming potential than carbon dioxide over the span of a century. Smart regulations could almost entirely eliminate methane emissions from the largest source of methane in the country.
Alberta can get out ahead of the game by applying methane regulations to all oil and gas facilities in the province, with monitoring happening year-round and repairs required as soon as a leak is identified.
The component that almost always gets left out of talk about aggressive climate action is the possibility for new jobs and enormous cost savings.
While a job forecast hasn’t been done specifically in Canada, Kirkpatrick said a recent Blue Green Alliance report in the U.S. can be used to estimate that at least 1,500 new jobs per year would be created if robust methane regulations were implemented.
In an interview, Kirkpatrick said that jurisdictions in the U.S. are already seeing all these benefits and beating out Canada and Alberta on methane management. Specifically, he noted that it would require a lot of local workers as they would need to be near the actual sites to conduct inspections and detection work.
“In that sense, there’s the potential benefit to some of the communities hit [by the price crash],” he said. “I don’t think it’s full recovery or anything, but it is another positive thing and there’s no reason not to do it.”
In addition, robust regulations could actually result in significant long-term financial savings for industry. While the new rules are expected to cost companies $3.3 billion over 17 years, the actual gas that’s captured and sold could amount to $1.6 billion in value. Then there’s the climate change costs, which the federal government estimates will reach $13 billion by 2035.
That combines to $11.7 billion in net benefits.
The challenge, as with many related issues, is rebuffing industry pressures to minimize new regulations. After all, the proposed rules will indeed cost companies $1.7 billion over almost two decades. But it will also result in massive reductions in emissions and associated climate impacts.
At this point, it’s entirely about priorities for the Alberta government: will it focus on appeasing the oil and gas industry or avoiding the worst impacts of climate change?
The Alberta Energy Regulator (AER) is responsible for drafting provincial regulations. A spokesperson from the regulatory body told DeSmog Canada via e-mail that they will be posted for public feedback this fall.
They also noted that the “multi-stakeholder process will continue as we work on addressing the feedback we receive on the draft requirements.”
It’s a point that’s inconsistent with what Kenyon said, who noted that the multi-stakeholder group broke down and that “the AER has fundamentally written their own conditions.”
Either way, we’ll have to simply wait and see what happens in the fall. Many of the technical issues are easily deployable, with Kenyon noting there are about 170 companies in Alberta alone who have solutions for methane leaks. It’s now just about the AER developing smart regulations and releasing the massive potential energy.
“For the Alberta government to now take a step back from that wouldn’t seem to be the wise move,” Kirkpatrick said. “Why show that courage that was displayed early on to say we’re going to be a leader on climate change and then adopt a direction that puts you in the middle or back of the pack?”
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