Wednesday, November 6, 2024

Emissions cap puts methane in spotlight; industry says low-hanging fruit already gone

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CALGARY — Oil and gas producers who have already made progress on lowering their methane emissions over the last decade say further large-scale reductions will be tougher to deliver.

The federal government published new draft regulations Monday that would require oil and gas producers in Canada to cut total greenhouse gas emissions by about one-third over the next eight years.

The bulk of the emissions from Canada’s energy sector come in the form of CO2 pollution from Alberta’s massive oilsands operations, which were responsible for 40 per cent of the oil-and-gas industry’s overall emissions in 2022.

But even though the oilsands are the primary driver of the industry’s emissions, it is the conventional or non-oilsands part of the oil and gas sector that will be expected to do a significant amount of the heavy lifting if the industry’s overall emissions are to fall by the target amount.

On Monday, Environment Minister Steven Guilbeault said federal government modelling suggests that about half of the cuts required under the new rules could come from the conventional sector in the form of methane emission reductions.

Chris Carlsen, CEO of oil-and-gas producer Birchcliff Energy Ltd. — which has drilling operations in Alberta’s Montney region — said he can’t see how that would be possible.

“We have made quite a significant improvement on methane emissions,” Carlsen said in an interview.

“But when you look at this emissions cap, to have half of that (reduction) come from methane is just unrealistic.”

Much of the public conversation around the federal emissions cap has centred on the oilsands, as well as a proposal by the Pathways Alliance group of oilsands companies to bring down their CO2 emissions by investing $16.5 billion to build a massive carbon capture and storage network in northern Alberta. (The Pathways Alliance has not yet committed to going ahead with the project.)

But methane, the second largest contributor to global warming after carbon dioxide, is produced as a byproduct of the conventional oil-and-gas drilling process. It can escape into the atmosphere as a result of leaky oil and gas equipment and facilities, or be released deliberately as a waste product through industry practices like venting and flaring.

Green groups and politicians have long viewed methane as the “low-hanging fruit” when it comes to reducing emissions from the oil-and-gas sector.

That’s because some of the measures required to address methane are simple and cost-effective, especially when compared to proposed decarbonization projects like the Pathways proposal.

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