*Please note the following information applies to the draft methane reduction requirements that were released for public comment in May, 2018.
Environment and Climate Change Canada (ECCC) regulations are designed for all of Canada (including offshore), whereas the AER’s proposed requirements are for Alberta only. Equivalency discussions will be held between the Government of Alberta and ECCC. Please contact Alberta Energy for questions related to federal equivalency.
The estimated cost of the requirements is $780 million (2018-2025). The AER estimates ECCC’s methane regulations will cost $1.66 billion (2018-2025). We used extensive modelling to inform the regulatory design in order to minimize the economic impact of the requirements. For information about ECCC’s methane reduction regulations, including cost, visit ECCC’s website.
Scope of the Requirements
The proposed requirements apply to AER regulated:
- upstream oil, gas and bitumen wells,
- oil and gas facilities,
- gas plants,
- pipeline installations,
- storage facilities, and
- tank terminals (i.e., production and injection wells, batteries, and central processing facilities within thermal in-situ oil sands schemes)
The proposed requirements do not apply to:
- AER regulated facilities that are not related to oil, gas or bitumen production (such as coal, water wells, brine wells, NEB regulated facilities, midstream meter stations, or midstream pipelines),
- oil sands mining schemes,
- processing plants for removing bitumen from oil sands at mines including upgraders,
- rail car loading facilities,
- downstream distribution pipelines, and
- downstream facilities.
Measurement, monitoring and reporting are important elements of the draft requirements. Improved reporting and measurement will help to better quantify and track Alberta’s progress towards methane emissions reduction.
Once the requirements take effect, the measurement system will allow us to collect enough information to track our progress toward the 45 per cent target and at the same time we will continue to advance research and development programs intended to improve emissions quantification and reduction technologies. Because the methane reduction requirements are an addition to the AERs regulatory framework, we think it’s important to step back and review how effectively they are reducing methane in light of this additional information.
The review itself is planned for 2022, which is when we will have enough reported emissions data to update our model and most of the research programs will be complete. Prior to the review, we will meet with a stakeholder committee to identify any potential data gaps, review annually reported data, and review research outcomes that may be available.
Although the AER reviews its directives on an ongoing basis this is the first time a review of a directive has been embedded into the text of the directive itself. The process for this review is in draft and is based on best-practices from other jurisdictions.
To enforce the new requirements, the measurement system will collect emissions data from oil and gas facilities and compare them with our requirements to determine which facilities may be out of compliance. Depending on the type of noncompliance detected, companies will either be sent a noncompliance letter immediately or we will first audit the data to better understand the nature of the noncompliance. We will also do inspections to identify noncompliant facilities. Inspections can be triggered by potential risk, a public complaint, or abnormal reported data.
Noncompliances will be dealt with in accordance with Manual 013: Compliance and Enforcement Program and may include enforcement tools ranging from warnings and administrative penalties to orders imposing conditions and prosecution. More specific information about compliance can be found in the draft requirements.