Thursday, January 15, 2015

US Oil Gas Methane Regulations Won't Be Matched By Ottawa

Bruce Cheadle, The Canadian Press
Natural Resources Minister Greg Rickford says he welcomes tough new U.S. oil and gas regulations on methane emissions announced by the White House and calls Canada a "willing partner" — but not one ready to immediately match the American move.

The Obama administration said Wednesday it plans to use its regulatory power to cut methane emissions by between 40 and 45 per cent from 2012 levels by the year 2025.

Methane is a powerful greenhouse gas, far more potent than carbon dioxide, and is emitted in significant volumes in flaring and venting from oil and gas operations.

The announcement came while Rickford was in Washington making yet another pitch in support of TransCanada's proposed Keystone XL pipeline.

"Any time the United States is thinking about regulations in coal or methane, it tells me two things," Rickford said at a news conference in the U.S. capital.

"One: Canada is a willing partner. And two: That this is an opportunity for Canada and the United States and Mexico, in a trilateral sense, to bring North American opportunities and solutions to challenges we face in energy."

Alberta brought in provincial health and safety rules on venting and flaring last May, Rickford noted.

"I would say to you that in some respects we're ahead of the United States on certain parts of methane regulation," he said. "For example, flaring is the best example."

However, the national methane reduction target set by the White House far outstrips anything on the books in Canada, and encompasses everything from pipeline leaks to natural gas processing, compressors, remote sensing and leak detection technology.
"We are reviewing the details of the U.S. proposal to assess its implications for Canada," Shane Buckingham, a spokesman for Environment Minister Leoan Aglukkaq, said in an email.

Regulating Canada's oil and gas industry to curb the sector's greenhouse gas emissions has been an unfulfilled promise of the Conservative government since 2007.

Last month, Prime Minister Stephen Harper repeated that it would be "crazy" for Canada to get out of alignment with its largest trading partner by imposing unilateral emissions regulations on Canada's oil and gas sector.

"This is an industry that is integrated between Canada and the United States, in North America, and what is crazy would be for us to impose costs only on our industry in a way that would not reduce emissions, but simply shift jobs and development to other parts of North America," Harper told CBC in a year-end interview.

Dave Sawyer, an environmental economist, said the details of the Obama plan remain thin but the overall target is significant.

"It is a big deal," Sawyer said in an interview.

"The fact that they've quantified the target at such an aggressive level says to me, wow, OK, there's more here than this list would imply."

Sawyer, on his EnviroEconomics website, has calculated the proposed U.S. methane cuts amount to roughly a quarter of Canada's current shortfall under its Copenhagen target for reducing greenhouse gas emissions by 2020.

By hitching his government's refusal to regulate the oil and gas sector to Canada-U.S. alignment, "the prime minister has sort of painted himself into a corner," said Sawyer.

However, if the Conservatives are serious about meeting Canada's Copenhagen commitment of cutting greenhouse gas emissions 17 per cent below 2005 levels by 2020, methane gas is one of the most cost effective ways to move the dial, say experts.

Helen Mountford of the London-based New Climate Economy project said a U.S. case study last fall found that methane reduction measures benefit producers' bottom lines.

"What we found was that in the U.S. we could reduce 25 per cent of methane leakages with measures that pre-exist today and would pay for themselves in three years or less. Beyond that, there would be savings," Mountford said in an interview from London.

"There's actually economic opportunities here with available technologies to reduce emissions and sell more gas."

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