In September 2022, a European satellite spotted a massive cloud of pollution near the city of Lloydminster, which straddles the border between Saskatchewan and Alberta.
A geoanalytics firm that examined the satellite’s data from the ominous cloud concluded it was methane gas coming from the fossil fuel sector. The firm estimated the source of the cloud was dumping pollution into the atmosphere at a rate of 11 tonnes an hour — equivalent to emissions from 200 cars left idling for that long.
But confirming methane emissions like this has been difficult. More than 90 per cent of heavy oil sites in Saskatchewan are not required to measure how much pollution they’re generating, according to a senior research analyst who extensively studied the province’s fossil fuel industry.
Instead, the province allows the vast majority of these sites, many of which are clustered around Lloydminster, to report an estimate — essentially an educated guess — as to how much powerful, heat-trapping methane gas they’re responsible for emitting.
“There are some cases where measurement is required, but we estimate that a vast majority of sites do not meet this threshold,” mechanical engineer Scott Seymour said.
The high total could be why scientists believe the province is underestimating its emissions of heat-trapping methane gas by up to 40 per cent, according to a study Seymour and a team of researchers published in the peer-reviewed journal Environmental Research Letters in July.
Seymour was a researcher at Carleton University in Ottawa before moving to work with the New York-based nonprofit Environmental Defense Fund. He made the calculation about heavy oil sites, which are conventional oil wells that target thick, viscous crude oil deep in the ground, while carrying out work for the July study.
The research confirmed earlier work that found heavy oil methane venting in Saskatchewan was nearly four times higher than industry-reported levels. Other studies in the region have reached similar conclusions going back to 2016.
In Canada, the oil and gas sector is the largest industrial emitter of methane, a colourless, odourless greenhouse gas responsible for roughly a third of global warming since the industrial revolution.
Getting industrial methane under control is critical to the climate fight. Every decade the world delays tackling methane, the peak global warming temperature will increase by roughly 0.1 degrees Celsius, Simon Fraser University researchers have found.
Yet Saskatchewan’s oil and gas sector has come to rely on heavy oil, the thick, viscous version of crude oil used for making asphalt, fuel oil and petrochemicals — and which is often extracted using techniques associated with methane release.
Thousands of heavy oil wells surround the Lloydminster region, which produces 28 per cent of all conventional oil from both Alberta and Saskatchewan, a major source of petroleum outside the oilsands.
“These emissions are essentially going uncounted, and they’re not counting towards the emission limits that all of the companies have to hit,” Seymour said.
“If we did have accurate requirements for measuring and reporting these emissions, then an individual company’s emissions might be significantly higher and they might need to reduce those emissions to comply with the current regulations,” he added.
Both the federal and provincial governments say they’re aware of the problem, and the federal government says new rules to address the issue are coming soon. But it’s unclear if, or when, those rules will apply in Saskatchewan.
Meanwhile, Cenovus, Canadian Natural Resources and Baytex Energy, all large oil and gas companies that operate heavy oil sites in the region, say in corporate reports they are working on tackling methane emissions from those facilities by installing equipment to capture or combust the gas, as well as carrying out aerial surveillance pilot projects. None responded to requests for comment.
Saskatchewan is the second-largest crude oil producer in Canada after Alberta, the home of the oilsands.
There is a similar situation with unmeasured methane in Alberta, as 93 per cent of certain heavy oil sites there were not required to measure their methane production in 2020, according to research published in the journal Elementa.
Industry lobbyists in Alberta were able to shield some of these heavy oil sites from tougher rules, even as regulators warned weaker requirements would mean compliance would be harder to verify.
There is a gap of more than 90 per cent between observed and reported oil and gas methane emissions in Saskatchewan and Alberta, according to an updated methane reduction strategy released by Environment and Climate Change Canada last fall.
“Accurately estimating methane emissions from oil and gas operations is a challenge,” Environment and Climate Change Canada spokesperson Samuel Lafontaine said in an emailed response to The Narwhal.
“The oil and gas sector in Canada includes tens of thousands of facilities, hundreds of thousands of wells and millions of components with the potential to emit methane.”
Currently in Saskatchewan, heavy oil sites are only required to measure their methane if the volume of their gas exceeds 2,000 cubic metres per day, or 500 cubic metres if the gas is being sent to an engine, Seymour said. As most sites report gas volumes under this threshold, they are permitted to estimate their methane instead.
The federal government is working on revised regulations that would make virtually all oil facilities — or all those that exceed five cubic metres of methane flaring and venting per day — responsible for taking steps to stop the gas from being released into the air, according to a proposed framework.
Fossil fuel firms could do this by either using the gas as fuel, storing it underground or burning it off, which converts it to carbon dioxide — still a greenhouse gas, but less powerful than unburnt methane when it comes to warming the planet over the short term. A draft of the revised regulations is expected later this fall, Lafontaine said.
The rules, however, won’t automatically apply in Saskatchewan when they come into effect. The federal government agreed in 2020 to temporarily stand down some of its key rules, such as those related to industry performance standards or requirements for companies to report certain records, when it signed a deal with the province to accept Saskatchewan’s regulations as “equivalent” to its own.
The equivalency agreement expires at the end of 2024. In the meantime, federal officials are in “close contact with counterparts in the government of Saskatchewan about the various methane emission sources, including those from heavy oil facilities,” Lafontaine said.
In June, Saskatchewan appeared to claim an early victory in its fight against methane, when it announced provincial emissions from venting and flaring methane at upstream oil facilities in 2022 had dropped 64 per cent below 2015 levels. The province has committed to cut emissions from the upstream oil and gas sector by at least 40 per cent by 2025 from 2015 levels.
But the findings of Seymour’s July study mean there is “significant uncertainty in the province’s progress” towards its emissions target, he said.
Debby Westerman, executive director of resource management at Saskatchewan’s Ministry of Energy and Resources, told The Narwhal in an emailed statement that ministry officials collaborated with Seymour and his team, “to improve their understanding of the administration of the regulations” set by the province.
“As new data becomes available from research outlined in the study, which highlights emerging detection technologies, [the ministry] will continue to work alongside industry to improve its regulatory framework that ensures responsible resource development,” Westerman wrote.
Westerman said the ministry “collaborates regularly” with industry and other stakeholders on methane emissions. She didn’t respond to questions about what the ministry thought of Seymour’s 90-per-cent estimate, what new techniques the government was using to improve its data reporting or whether the ministry was revising its rules in light of multiple studies finding methane underreporting is an issue in the province.
Saskatchewan Premier Scott Moe has often clashed with Prime Minister Justin Trudeau over climate policy. Moe sounded defiant earlier this year about going along with another federal energy policy, clean electricity standards. The Moe government also fought the federal carbon pricing system all the way to the Supreme Court, where it lost.
Saskatchewan NDP MLA Aleana Young, official Opposition critic for energy and resources, told The Narwhal cutting methane emissions is “low-hanging fruit” in the fight against climate change and the Moe government should be taking note.
“The government should be reviewing these findings and using the best evidence-based methods to ensure that we are accurately measuring and reducing greenhouse gas emissions,” Young said.
Oil companies do have options to better reduce methane emissions from heavy oil sites, according to Carleton University engineering professor Matthew Johnson. In addition to scanning facilities for leaks, they could also install equipment to capture the methane instead of letting it escape into the air.
Since methane is the primary component of natural gas, the captured methane could theoretically be sold at market rates to help pay for such equipment, according to the International Energy Agency, which has estimated 40 per cent of global oil and gas sector methane emissions could be cut at no net cost. Seymour’s study found heavy oil sites in Saskatchewan emitted enough extra methane to heat around 100,000 households in Canada over the last decade.
Johnson, the scientific director of Carleton’s Energy and Emissions Research Laboratory, said one such piece of equipment is called a vapour recovery unit. As its name suggests, it can be installed on the heavy oil tanks to capture methane. From there, the gas could be sent to a collection unit where it would get compressed and then either used, stored or burned.
Deploying this equipment at heavy oil sites is feasible, according to a February study in the journal Environmental Science and Technology where Johnson and other researchers concluded there has already been a “widespread deployment of vapour recovery units at heavy oil sites in the Peace River area of Alberta.”
“I think that’s really what we want companies to be spending their money on and doing,” he said.
Scientists say the Lloydminster heavy oil belt contains infrastructure particularly susceptible to undercounting. Canada’s recent national emissions report to the United Nations acknowledged methane gas is escaping from equipment at some wells in the Lloydminster region and that these emissions have been estimated in the federal data.
Some of the oil wells use a technique known in the industry as “cold heavy oil production with sand,” or CHOPS. It involves pumping low-grade crude to the surface along with sand or water, and then letting it settle in tanks to separate out solids from liquids. While it settles, methane naturally bubbles to the surface. The tanks are designed to release the gas before it builds up too much pressure.
Saskatchewan’s rules allow most of these sites to carry out periodic tests, as infrequently as once a year, to come up with a ratio representing the amount of gas produced at a well for a given amount of oil. Then, when companies sell the oil, they estimate the amount of gas by applying this ratio to the volume of oil sold.
But methane isn’t always released in a steady stream, and can instead come out in gas pockets, scientists say. That adds an element of unpredictability.
“The world over, this is recognized as flawed,” Johnson said about the estimation methods. He said multiple studies throughout North America have demonstrated discrepancies between measured and estimated methane.
He and other Carleton researchers have been working on creating a comprehensive, measurement-based inventory of methane emissions, so governments can base their emissions reduction goals on more accurate data.
In British Columbia, for example, they found about 1.7 times as much methane was being emitted compared with official estimates, according to an April paper in the journal Communications Earth & Environment.
Several oil and gas companies maintain heavy oil operations in the Lloydminster area, but it’s unclear which have installed gas capture devices or how many wells have been retrofitted.
The oilsands company Cenovus inherited a fleet of heavy oil sites in Saskatchewan when it took over Husky Energy in 2020. Cenovus also runs an asphalt refinery on the Alberta side of Lloydminster, which produces asphalt from heavy oil and an upgrader on the Saskatchewan side that processes heavy oil into synthetic crude.
In 2022, Husky was fined $600,000 for violating the federal Fisheries Act, after a 2018 pipeline spill sent hazardous wastewater into a tributary of the North Saskatchewan River, harming vegetation and fish.
In its 2022 environmental, social and governance report, Cenovus claims to be focused on better methane detection and reduction at its facilities, completing a pilot project in 2022 involving aerial screening at heavy oil sites to detect methane leaks.
The report also discussed other pilot projects including “methane-detecting robots” and potential use of carbon capture technology in Lloydminster. The company says it cut its absolute methane emissions from oil and gas production by roughly 59 per cent from 2019 levels and hopes to reach 80 per cent by 2029. Cenovus did not respond to requests for comment.
On its own site, Canadian Natural Resources, another company with a significant footprint in Lloydminster, said it has been installing combusting technology at heavy oil sites to burn off the methane instead of venting it into the atmosphere. The company said it completed 244 projects in 2022 at its heavy oil sites to better conserve methane and reduce vented gas, for a total pollution reduction of about one million tonnes of carbon dioxide equivalent per year. From 2018 to 2022 the company says it conserved the equivalent of 10 million tonnes by tackling heavy oil methane. Canadian Natural Resources did not respond to requests for comment.
The Canadian Association of Petroleum Producers, a large and influential industry group, counts both Cenovus and Canadian Natural Resources as members. It also did not respond to requests for comment.
Oil and gas company Baytex Energy says on its website it has been installing “high-efficiency combustors” to convert methane into carbon dioxide at its Lloydminster facilities. The company claims to have cut its volume of vented methane by 85 per cent from 2018 and to be using scanning technology to manage leaks, completing 7,528 surveys in 2022 that resulted in 608 leaks being repaired, and carrying out an aerial surveillance pilot project at 560 sites. Baytex Energy did not respond to requests for comment.
Strathcona Resources also has heavy oil operations in the Lloydminster region. The private company recently merged with Pipestone Energy and announced plans to go public and list on the Toronto Stock Exchange, which comes with financial reporting requirements. On Aug. 28, the company filed a management information circular describing its Lloydminster heavy oil assets but makes no mention of methane. Strathcona Resources did not respond to requests for comment from The Narwhal.
Researchers like Seymour are adamant that whatever companies say they’re doing to get their heavy oil methane emissions under control, Canadians deserve a clearer picture of what pollution the oil and gas industry is responsible for.
“If methane emissions continue to be underestimated, it will remain unclear whether the regulations are having their intended impact,” Seymour said.
“It will remain unclear whether Canada is meeting its climate commitments.”
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